Mid-America Lumbermens Association
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MLA LINE Lumber Industry News Express |
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Vol. 7, No. 26 – December 22, 2008
In this issue: When to Quit and When NOT to Quit Canadian Forestry Hit by Big Losses in '08 Russia Decides to Hold Off on Timber Export Tax Housing Starts and Permits Continue to Fall Stock Building Supply Exits Arizona
NLBMDA to
Pursue Aggressive Agenda in 111th Congress
By Michael O’Brien, CAE
NLBMDA President & CEO With the elections behind us and a new Administration and Congress now in place in Washington, the reality of the many challenges facing our new government is rapidly sinking in. From the financial crisis to the housing economy to health care to labor policy to taxes to energy – the issues facing us as an industry are numerous. Combine those issues with the debate over two wars and national security, you could reason that this is not a time for the feint of heart to be promoting an aggressive agenda in Washington. However, that is exactly what we must do as an industry if we are to promote and protect our interests in this recessionary period. Thankfully, NLBMDA’s 2009 National Policy Agenda provides an excellent roadmap to guide the association as we navigate the seemingly endless twists and turns, and not to mention minefields, that have become so commonplace in the economy and in Washington over the last six months. At the top of our agenda will be initiatives to stimulate the housing market. As the voice of America’s building material suppliers, NLBMDA will play a critical role in promoting responsible stimulus measures that will continue to help liquidate existing inventories that are depressing housing demand, stabilize home prices and restore consumer confidence in the market. A combination of tax incentives and below-market mortgage financing has worked in the past and should be considered again. Coupled with the housing stimulus, NLBMDA will also be urging Congress to help jumpstart the economy by extending bonus depreciation and increased Section 179 expensing provisions for at least one year, to further promote investment during the current economic downturn. The Economic Stimulus Act signed into law last year temporarily created a 50 percent depreciation bonus and increased the amount that small businesses can expense under Section 179 to $250,000, but those provisions are due to expire at the end of 2008. Additionally, NLBMDA will be asking Congress to extend net operating loss (NOL) carryback provisions from two years to five to allow building material dealers to discount current losses against past profits. The time for bold leadership on the housing economy is now if we are to turn the corner in 2009. The challenge for our industry and the housing industry at large will be pushing these issues to the top a very long list of priorities being set by Congress and the Obama Administration. We will need all dealers to actively engage their representatives and senators on these issues if we want quick action. NLBMDA is committed to working with our housing industry allies to push for an aggressive housing stimulus agenda. From a defensive position, we will be out front in opposing efforts to pass the so-called “Employee Free Choice Act,” which is really a thinly-disguised attempt to subvert decades of labor-management law by allowing unions to bypass secret ballot organizing elections. Since fewer employees have opted for union representation through secret ballot elections, organized labor want to employ “card check organizing” as the principal means to achieve recognition of the union once it presents authorization cards signed by a majority of employees. Such methods can lead to intimidation and/or coercion of employees to publicly sign such authorization and have been legally challenged in the past on the basis of forgery, fraud and misrepresentation. If there was any legislative initiative this year that could justly be called “anti-democratic,” this is the one. With organized labor playing a major role in achieving increased Democratic majorities in Congress, you can expect an enormous amount of pressure on the Congressional leadership to schedule a vote on this bill sooner rather than later. You will see a lot of attention being given to newly elected Democrats in swing districts on this issue from supporters and opponents. Another issue sure to be the focus of much debate in 2009 will be health care. The skyrocketing costs of health care is making employer-sponsored health coverage difficult for businesses to provide their employees and even more difficult for working families to afford. You can expect a wide array of proposals from both Congress and the Administration – from universal employer-mandated health care to pure market-driven proposals. While NLBMDA believes that access to health care should be increased for all Americans, we firmly believe that reform efforts should be market-driven, should not result in costly employer mandates and that small businesses should be allowed to pool together to purchase insurance for employees. Reform proposals that rely on access to employer-provided care should be coupled with tax breaks and other incentives to offset costs. Regardless of the number of competing issues, NLBMDA will also be seeking re-introduction of the Innocent Sellers Fairness Act (ISFA) in the 111th Congress. Nearly one in four dealers in past surveys has been sued over a product they sold but did not manufacture. We will continue to build support for ISFA in the new Congress, so that innocent sellers will be held free from liability for a product they did not produce. This is another issue in which we will need all dealers engaged in educating their representatives and senators and urging their support. Besides these issues, we will also be contending with tax, energy and immigration proposals, among others, so our plate is certainly full. I would like to encourage everyone to attend NLBMDA’s Spring Legislative Conference and Green Building Forum in Washington on March 16-18 to help us in our efforts to advance our agenda in Washington. There is indeed strength in numbers. Visit www.dealer.org for more information and to also download a copy of the NLBMDA National Policy Agenda.
As always, feel free to share your thoughts and concerns with me at mike@dealer.org.
Source: NLBMDA Update, January 2009
The MLA Office will be closed December 24-26 for the Christmas holiday; open December 29-31; and will close the afternoon of December 31 – January 2 for the New Year’s holiday. The entire staff of your Association wishes you and yours a very happy holiday season and a prosperous new year!
Right now, you need the brainiest, most motivated, most innovative employees. During the good times, there is never a focus on training, education and personal development: “…No need, as we are succeeding and No Time, consumers are pushing, pulling and jumping on us.” Now you have the time to train and grow your employees’ skills; you need them to be sharply honed. The consumers are few and far between in an increasingly hardcore market, so use the excess time to train your current employees to be more valuable. Take advantage of the upcoming Estimating Workshop, March 3-4, 2009, in Kansas City, Mo. Maybe you can’t send everyone you’d like, but send at least one person. There couldn’t be a better time to invest in your people – or your business. Click here for more information and a registration form.
When to Quit and When NOT to
Quit About once a year or so, a book is written that I consider a "must read." The Dip by Seth Godin is that kind of book. Owners, managers and salespeople will make far fewer mistakes when they understand the principles outlined in The Dip. Especially in the economic times we are all facing, one of the biggest decisions we all must make is what aspects of our respective businesses to quit and which ones to stick with. The following are some direct quotes from the author and some of my own "take-aways" from reading The Dip: The Dip is about quitting! Actually, it's about when you should quit and when you should not quit, and provides the reader with some solid examples of when you would be wise to either quit right now or keep on keeping-on. The author says the decision to quit or not quit is a decision all individuals striving for a goal must make. Regardless of your decision, Godin says it's about being the best, about getting through the hard stuff and coming out on the other side. Quit the wrong stuff Stick with the right stuff. Have the guts to do one or the other. Godin says, "…believe it or not, quitting is often a great strategy, a smart way to manage your life and your career. Sometimes, though, quitting is exactly the wrong thing to do. It turns out that there's a pretty simple way to tell the difference." The author believes that the Dip controls almost everything in life. In the beginning when you first start something, it's fun. It's interesting. Over the next few days and weeks, the rapid learning you experience keeps you going… then the Dip happens. The Dip is the long slog between starting and mastery. The Dip is the long stretch between beginner's luck and real accomplishment. Super successful people either have the courage to hang in there when they hit the Dip or when they hit the Dip, quit; that is, if they come to the realization that they are facing what the author calls a Cul-de-Sac (French for dead end). Were it not for Dips, there would be no scarcity and scarcity is what creates value, you know, like supply and demand. If getting through the Dip were easy, everyone would do it. If you think about it, there's not much point in starting something that's difficult if you're going to quit when the going gets tough. It's human nature to quit when it hurts, but it's that reflex that creates scarcity. On the other hand, Godin offers seven reasons why many people fail: • You run out of time • You run out of money • You get scared • You're not serious about it • You lose interest or enthusiasm and settle for being mediocre • You focus on the short term instead of the long term • You simply don't have enough talent Most people who fail either planned wrong or gave up before they reached their goal. What many salespeople fail to realize is the key to success in selling is the salesperson's ability to transfer emotions, not on the presentation of facts. If presentation of facts were the key then a brochure or Web site would be all that would be necessary to make the sale. Salespeople who sell through the Dip show buyers they are there for the long haul, committed to making a sale because it benefits the other person. "I'm getting through this Dip with you because it's important to both of us" is the signal to send. Persistent people are able to visualize the idea of the light at the end of the tunnel when others can't see it. At the same time, the smartest people are realistic about imagining light when there isn't any. Getting off a Cul-de-Sac is not a moral failing. It's just smart. Seeing a cliff coming far in the distance isn't a sign of weakness. Strategic quitting is a conscious decision you make based on the choices available to you. Quitting smart is a great way to avoid failing. The advice-giver would say, “Never quit something with long range potential just because you can't deal with the stress of the moment.” Three questions to ask before quitting: 1. Am I panicking? Panic is never premeditated. The best quitters are the ones who decide in advance at what point they're going to quit.
Source: Bill Lee’s Management Tips
Newsletter, December 10, 2008 – www.BillLeeOnLine.com
January 8-9 –
Missouri State Committee Meeting – Holiday Inn Select, Columbia, Mo.
January 15-16 –
Kansas Winter Meeting – Eldridge Hotel, Lawrence, Kan.
March 3-4
– Blueprint
Reading & Material Take-Off Seminar – Kansas City, Mo.
April 30-May 1 – MLA
Swing-into-Spring Event – Lake of the Ozarks, Mo.
June 13 – Kansas
Sunflower Shootout
– Salina, Kan.
Nov. 5-6 – MLA Fall
Fling – Kansas City, Mo.
Call the MLA Office – 800-747-6529 – for
additional information or email:
mail@themla.com
LUMBER NEWS –
QUICK GLIMPSES
Canadian Forestry Hit by
Big Losses in '08…
In 2008, Canada's forest industry saw losses
totaling C$552 million in the third quarter, according to a new report from
PricewaterhouseCoopers. The decline came in response to the ongoing U.S.
housing crisis and to lumber companies slowing down production due to weak
markets.
Source: LBM Daily, December 9,
2008 NYSE Suspends Huttig Trading… Shares of Huttig Building Products were suspended from trading on the New York Stock Exchange, effective Dec. 3, because the company no longer complies with the NYSE’s listing requirements. The St. Louis-based distributor was notified on Dec. 1 that it fell below the minimum market capitalization threshold, which is $25 million over a consecutive 30-day trading period. Huttig is the second LBM company to fall off the NYSE
list since the housing downturn. Building Materials Holding Corp. (BMHC) was
dropped by the NYSE on Oct. 29, also for failing to meet market
capitalization standards. In a statement filed with the Securities and Exchange Commission (SEC), Huttig said its common shares began trading on the OTC Bulletin Board on Dec. 3 under the symbol HBPI.
Source: Home Channel News, Pro Dealer Digest,
December 10, 2008
Russia Decides to
Hold Off on Timber Export Tax…
On Wednesday, Russia's Vladimir Putin
revealed his decision to postpone implementation of a new lumber tax regime
which would result in an 80% export tax on wood. The tax is said to be
postponed until late 2009. Apparently, the requests of Scandinavian lumber
mills and manufacturers were well received.
Source: LBM Daily, December 11,
2008
Learning
from Rejection… Yes, there are
a lot of cutbacks and layoffs, so there may be a lot of good people
available. It’s probably a good time to get rid of some dead wood and
upgrade your staff. But when a high quality candidate comes in and rejects
your offer, do you just dismiss it as a bad fit, or do you look at it as a
learning opportunity and chance to improve? I believe we need to ask the
candidate why they did not take the job, what they liked about your firm,
and what they didn’t like. If you get frequent rejections
for a specific position, then examine the salary and benefits to ascertain
if it is competitive. Maybe the job description and expectations are
ludicrous, and no one wants it. You also may want to discuss events with the
hiring manager. They may be turning off the candidate. Another possibility
is that you have the candidate going through too many forms, paper work, and
bureaucratic nightmares before you hire them, making the process way too
long. Make each rejection a new learning experience.
Source: Bob Losyk,
MEd., M.B.A., C.S.P. is a Certified Speaking Professional, master trainer,
author, and President & CEO of Innovative Training Solutions, a Greensboro,
NC consulting firm. For more
information on Bob’s keynotes, seminars, best practices facilitation, panel
discussion leader, and products, please visit his websites at
www.boblosyk.com and www.getagriponstress.com or call 1-800-995-0344. Housing Starts and Permits Continue to Fall… Total housing starts fell nearly 19 percent in November 2008 to a seasonally-adjusted 625,000 units, the lowest level since the Commerce Department started collecting these data. Single-family starts also fell to an all-time low of 441,000 units in November, representing a decline of 17 percent from the previous month. Starts declined in all four Census regions, led by a 35 percent drop in the Northeast. Building permits, an indicator of future housing activity, declined 15.6 percent between October and November to an annual rate of 616,000.
Source: NAHB News and Alerts,
HousingEconomics.com, December 16, 2008 Stock Building Supply Exits Arizona… Stock Building Supply will close its Phoenix location next month, according to the Phoenix Business Journal, which obtained the news from the Arizona Department of Economic Security. Approximately 123 workers will be laid off, according to the newspaper. Stock entered the Phoenix market with the purchase of the facility at the end of 2006. Formerly called Tonto Verde Construction, the framing contractor also operated a four-acre lumberyard operation called Precision Forest Products. It was the Raleigh, N.C., chain’s only location in Arizona. On Oct. 23, Stock’s parent company, U.K.-based Wolseley, announced a major consolidation at Stock that will ultimately result in the closure of 86 units. A list of the exact locations has not been released, but local newspapers have been reporting closures ever since. Business First of Louisville reported that a Stock lumberyard and showroom in La Grange, Ky., has closed. The company’s location in St. Charles, Ill., will also be shut down, according to the Kane County Chronicle.
Source: Home Channel News, December 17, 2008
Practice Makes Profitable…
By now, nearly everyone has heard of the
10,000-hour rule, as proposed by Malcolm Gladwell in his book,
Outliers. Being great at
anything requires 10 years of practice, 1,000 hours a year. But what does
that mean in business – especially during
a recession? "Don't let downtime become wasted time," author and
entrepreneur Bill Taylor says. Take advantage of slower workdays to practice
a single skill, whether it's making a pitch or writing a news release. "Find
ways to work intensely and deliberately on your technical and business
skills, confident that hard work will pay off in the long run." Read the
entire story at:
HarvardBusiness.org/Practically Radical blog
Source: U.S. Chamber SmartBrief,
December 17, 2008
Executive Bonus
– As Good As It Ever Was?
Business
owners of C-corporations are often looking for ways to supplement retirement
income. Are you one of them? If so, IRS Section 162 Executive Bonus may be
the answer for you. It has been around for many years, but its benefits may
have been forgotten. Let’s step “back to the future” and see how it is still
as good as it ever was.
An Executive
Bonus Plan is a method of compensating business owners of C-corporations or
key employees with extra income for personal life insurance. It allows
business owners of C-corporations to have the business pay for personal life
insurance and build cash values on a deferred basis to supplement their
retirement. Since the policy is owned personally by the business owner, the
control lies with the business owner. It is a great way to take advantage of
the tax code by using your business to help you achieve a safe and secure
retirement.
How does it work?
§
You purchase a life policy on yourself.
§
You name your personal beneficiary(ies).
§
Your corporation pays the insurance premium.
§
Premium amount is tax-deductible to the corporation as
compensation bonus.
§
Premium is taxable income as compensation bonus.
§
You own the policy and its cash values.
§
You withdraw cash values after retirement.
Executive Bonus is still as good as ever. This article provided courtesy of Federated Mutual Insurance Company, your association’s recommended insurer.
“Be thankful we’re not getting all the government we’re paying for.” –
Will Rogers (1879-1935)
We're here to help. Until next time....
MLA Staff 816-561-5323 800-747-6529
The opinions, views, and interpretations expressed in this publication do not constitute legal advice. Questions and concerns regarding your company’s compliance with Federal or State regulations should be directed to the appropriate Federal or State agency.
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