MLA LINE

Lumber Industry News Express

Vol. 4, No. 8 – April 11, 2005

 Lumber Dealers Ask Congress to Support Lumber Import Tax Relief

NLBMDA President Shawn Conrad Criticizes Premature Negotiations 

The National Lumber and Building Material Dealers Association (NLBMDA) today called on Congress to support an end to tariffs on softwood lumber imports from Canada. America’s lumber dealers, who must import 34 percent of the lumber demanded by their building customers, have been paying tariffs averaging 21 percent while awaiting the end of the litigation appeals process. 

 “Tariffs on softwood lumber are at the core an unfair tax on the home building supply industry, and an impediment to the availability of affordable housing,” said NLBMDA President Shawn Conrad.  “With negotiations reportedly under way, it is time for Congress to reaffirm support for the free trade of softwood lumber between the U.S. and Canada,” Conrad continued.

 A NAFTA panel ruled unanimously earlier this year that the U.S. had failed to prove a “threat of injury” by Canadian imports. Accordingly, the U.S. must remove these tariffs altogether to uphold its obligations under international trade law. American and Canadian producers met yesterday to continue settlement negotiations recently initiated by the Canadian government.  America’s lumber dealers collectively are the largest purchaser of Canadian softwood lumber, and NLBMDA has long held that free trade is the only lasting solution for the lumber consuming industry, and opposed artificial barriers to Canadian softwood, including quotas or export taxes, that may be proposed as part of a negotiated settlement. Lumber consuming industries, including homebuilders and their suppliers, employ more than 6.5 million American workers, 25 to one when compared with those in the forestry industry. Because consumers have no official voice in trade disputes, NLBMDA has worked with members of Congress to ensure lumber dealers’ concerns are taken into account by the Administration.

 Last month, 200 lumber dealers from across the country converged on Capitol Hill asking their Representatives to sign on to a letter initiated by House Appropriations Foreign Operations Subcommittee Chairman Rep. Jim Kolbe (R-AZ), a long-time champion of lumber consumers and NLBMDA’s 2004 “Legislator of the Year.” NLBMDA thanks Congressman Kolbe, as well as House Majority Whip Roy Blunt (R-Mo.), House Minority Whip Steny Hoyer (D-Md.), and House Ways and Means Committee Member Richard Neal (D-Mass.) for their leadership on behalf of lumber consumers.

 Source: National Lumber & Building Material Dealers Association, April 5, 2005

 PLAN NOW FOR GOLF TOURNAMENTS

 It’s not too early to start planning for the MLA spring golf tournaments. Here are the details:

 Missouri “Swing into Spring” – Osage National Golf Course, Lake Ozark, Mo. – May 6, 2005 – The Missouri Lumber Dealers Activity Committee (MLDAC) has planned their popular golf tournament in conjunction with the Master Angler Bass Tournament on May 5. The headquarter hotel will be the Port Arrowhead Resort (formerly the Holiday Inn Sun Spree Resort).

 Kansas Sunflower Shootout XVII – Rolling Meadows Golf Course, Junction City, Kan. – June 10, 2005 – The Kansas Social Activities Committee has selected the Rolling Meadows Golf Course for their annual tournament. The headquarter hotel is the new Marriott Courtyard Inn, also in Junction City.

 If you need additional information on sponsorship or registration, contact MLA at 800-747-6529.

 NLBMDA 1^st ANNUAL SAFETY AWARDS

Be Recognized for Your Safety Achievements!          

 The National Lumber and Building Material Dealers Association (NLBMDA) invites all dealers to participate in the new safety awards program. Two types of awards allow dealers to be recognized for their safety records and achievements during the past year and recognize the most outstanding safety leaders in the industry.

        The National Achievement in Safety Award will be given to all dealer applicants that meet a high standard of safety based on specific criteria. Winners will receive a recognition certificate, acknowledgement in national industry publications, and customized press releases to announce their achievements to local media.

 The National Industry Leader in Safety Award will be presented to two dealers at the annual Industry Summit: one with fewer than 50 employees and one with more than 50 employees. Winners will be selected by an awards committee based on specific safety criteria and how well the company demonstrates their outstanding leadership and commitment to safety by "going above and beyond" basic safety practices. Winners will be invited to the Industry Summit in Vancouver, BC and presented the award by the NLBMDA Chair during the general session. Winners will also be profiled in ProSales magazine and receive customized press releases for use with local media.

 Eligibility for both awards is on a per location basis to allow individual lumberyards to be recognized for their excellence in safety.

 The deadline for applications is May 31, 2005. Contact NLBMDA at 800-634-8645 or visit www.dealer.org for applications and more information! 

LUMBER NEWS – QUICK GLIMPSES

 Housing News… Average U.S. home prices increased 11.2 percent from the fourth quarter of 2003 through the fourth quarter of 2004, according to the Office of Federal Housing Enterprise Oversight. The annual rate of home-price appreciation fell off from the third quarter, when values gained 13.3 percent. But the fourth-quarter number was still the second-best gain in the last 15 years.

 In the fall of 2003, real estate economists were predicting that mortgage rates would climb from their 40-year lows, ending 2004 somewhere around 6.5 percent. They never got there. The reprieve has now lasted more than seven months, helping home sales and home prices remain robust. But even if mortgage rates rise, it doesn’t bode all that ill for home buyers: the 30-year mortgage rate is expected to top out no higher than about 6.5 percent, a level that from the perspective of the last three decades remains exceptionally attractive. 

Source: HCI Business Report, Home Center Institute, March 17, 2005

 Retail Technology Update… A study unveiled at the National Retail Federation’s Annual Convention in New York last month reveals that retailers will focus on supply chain efficiencies and data-gathering capabilities to stay competitive this year. The study says that the majority of retailers cite supply chain optimization as a priority initiative for getting closer to the customer in 2005. More than 300 retailers were surveyed representing department, specialty, apparel, grocery and home center stores. Respondents ranged in size from companies operating a single store to chains with more than 2,000 outlets.

 Source: HCI Business Report, Home Center Institute, March 17, 2005

 Bankruptcy Reform on Verge of Final Passage… The NLBMDA-endorsed legislation to overhaul the federal bankruptcy code (S 256) was passed through the Senate on March 10 without amendment and with an overwhelming bipartisan final vote of 74-25. NLBMDA encourages members to write thank you letters to those who voted yes on the bankruptcy bill. You can check how your Senators voted at http://www.dealer.org/html/legislativeissues.html.

 On March 15 the House Judiciary Committee passed the Senate bill, again without amendment, with a final vote of 22-13, with all Republicans and Democrat Rick Boucher (VA) voting for it. House Judiciary Chairman James Sensenbrenner (R-WI) openly opposed any amendments, hoping that a clean bill would prevent a conference committee, where the legislation has been killed in the past. The full House was scheduled to begin debate on the bill on Wednesday, April 6, but it has been postponed to the week of April 11 as Congress ended the legislative week early due to the funeral of Pope John Paul II. President Bush has said he will sign the legislation into law soon after passage in the House. For a sample letter urging your Representative to support final passage, see the NLBMDA web site at http://www.dealer.org/html/dealerinvolvement.html.

 Source: NLBMDA Advocate, April 2005 

Asbestos: Negotiations Faltering… Senate Judiciary Chairman Arlen Specter (R-PA) has been working to address competing concerns from Republicans, Democrats, businesses, labor, insurers and trial lawyers in a bid to develop a compromise on the asbestos issue that could pass the Senate. Committee Republicans are concerned that the categories of illnesses in Specter’s draft bill are too vague, which could lead the trust fund to be depleted too quickly – in which case taxpayers may be forced to bail out the fund. There has been talk of abandoning the trust fund approach and attempting to pass legislation that would simply establish medical criteria for plaintiffs in civil cases who claim they were harmed by asbestos.

Source: NLBMDA Advocate, April 2005 

The Lumber Association of California & Nevada’s 2^nd Growth Second Annual Forest & Mill Tour… May 16-18, 2005, Arcata, California – This two-day forest and mill tour will include stops at Historic Samoa Cookhouse, Simpson Timber Company, and Britt Lumber Company. The cost to attend is $225 per attendee, which includes all meals and two night’s stay at the Red Lion Hotel in Eureka, Calif., Monday, May 16 and Tuesday, May 17. Space is limited to 40 attendees, so if you’re interested, contact the LACN office at 916-369-8271 or call MLA for a registration form.

 Health Update – Too Much Junk… Almost a quarter of the calories we consume come from junk food. A study of 4,700 people showed soft drinks the number one source of calories. The categories of soft drinks, sweets and desserts, and alcoholic beverages made up 23.8 percent of total calorie intake. Between-meal snacks and drinks may be the best place to substitute healthy choices.

 Source: American Institute Cancer Research (quoted in Southern Building Material Association newsletter, April 2005) 

Retail Trends and Reminders… An increasing number of retailers are outsmarting Wal-Mart, suggesting that when it comes to competing with retailing’s primary behemoth, price isn’t everything. A recent Bain & Company study shows that HEB, Publix, Target, Walgreens, Best Buy and PetSmart, among others, have all found a way to compete with Wal-Mart by excelling in areas the world’s largest retailer doesn’t. Independent retailers take heart: The study concluded that two-thirds of shoppers find Wal-Mart’s assortments, middling product quality and limited services are not worth the savings. That means, regardless of Wal-Mart’s proximity, there are plenty of customers looking for alternatives. 

Source: HCI Business Report, Home Center Institute, March 31, 2005

 Mortgage Rates Move Above 6%… Thirty-year fixed-rate mortgages (FRMs) averaged 6.01% for the week ending March 24, up from the previous week’s average of 5.95%, according to Freddie Mac. Last year at this time, the 30-year FRM averaged 5.40%. One-year adjustable-rate mortgages (ARMs) averaged 4.24% this week, up from last week’s average of 4.20%. At this time last year, the one-year ARM averaged 3.36%.

 Source: Freddie Mac (quoted in the NAWLA Bulletin, March 28, 2005)

 

 PROTECT YOUR BUSINESS AND EMPLOYEES FROM WORKPLACE DISCRIMINATION

 During 2003, the Federal Equal Employment Opportunities Commission (EEOC) received 81,293 charges of discrimination. For each charge, a business much like yours faced legal proceedings, as well as possible loss of productivity and business reputation.

 Examples:

• A former employee alleges discrimination and firing due to religious conviction. Cost: $30,000 in damages and $60,000 in defense costs.
• A former employee alleges sexual harassment by manager. Cost: $42,500 in damages and $91,500 in defense costs.
• An employee alleges sexual discrimination. Cost: $2,500 in damages and $26,000 in defense costs.

It is not uncommon for defense costs to reach $100,000 in these types of claims even where there is no actual liability on the part of the business. Most liability policies, however, exclude coverage for liability due to employment related practices such as: 

• Refusal to hire
• Termination of employment
• Employment practices such as coercion, demotion, evaluation, reassignment, dismissal, harassment, humiliation or discrimination

 An Employment Related Practices Liability (ERPL) policy can fill this gap. Risk management assistance may also be sought to prevent losses before they happen. 

Source: Mike Russell, field manager, Federated Mutual Insurance Company.