MLA LINE

Vol. 4, No. 23 – November 7, 2005

 

AREA MEETINGS START NEXT WEEK

The Mid-America Lumbermens Association (MLA) announces a series of area meetings to be held at a location near you. Online HR compliance management and PostFrame Manager will be discussed, in addition to offering a forum for the discussion of current industry news and issues.

Interested in attending?  We hope so.  A continental breakfast will be served at the morning meetings and hors d’oeuvres will be served at the evening meetings. They will be provided at no charge. To help us guarantee an accurate meal count, please fax your reply no later than one week prior to the meeting you plan to attend.

We are offering these meetings at 16 locations throughout the MLA territory. Call the MLA office at 800-747-6529 for a registration form or visit www.themla.com and click on Area Meetings. Select the time and place that works best for you and return your form today!

TWO NEW TELECONFERENCES

NLBMDA is continuing their popular teleconference series with two installments in November and December.

• "Are You Prepared for a Disaster?" on Thursday, November 17 at 1 p.m. EST 

• "Forklift Training and Triennial Review" on Thursday, December 15 at 1 p.m. EST

You may go to their website that provides dealers with a complete list of upcoming teleconferences and downloadable registration forms http://www.dealer.org/

The dates for the 2006 teleconferences will be available soon. Call MLA at 800-747-6529 with questions.

FALL FLING: UNQUALIFIED SUCCESS

The MLA Fall Fling was held November 3-4 in Kansas City. MLA thanks those who attended and sponsored. Your support and participation makes these meetings great.

We heard an update on Association activities from Jeff Dunn, Mill Creek Lumber, MLA President 2005-2006 and Harold Baalmann, Vice Chair of NLBMDA. Greg Brooks, of the Building Supply Channel, provided an outstanding presentation about the industry as a whole and where the greatest opportunities lie for building material dealers.

A special thanks to our conference sponsors:

• Federated Insurance
• DMSi
• Blish-Mize Company
• Cargotec, Inc.
• MHC Kenworth Kansas City
• America Building Products

Watch for the next issue of MLA News You Can Use for a complete recap.

Company Size Is No Measure Of Strength Or Stability

Sweeping domino effect of large company insolvency can hurt smaller businesses

The recent rumblings about large companies possibly seeking bankruptcy protection should serve as a warning to the U.S. business community—the size and reputation of the company with which you are doing business do not guarantee against insolvency. Protection of accounts receivable should be a major consideration to companies dealing in domestic and international trade, according to global trade credit insurer Euler Hermes ACI.

“Many people assume that because a company is large and established that the risk of insolvency is low,” said Euler Hermes ACI Executive Vice President Joseph Ketzner. “However, there have been several notable cases of large companies seeking bankruptcy protection in the past few years that should trigger an increased diligence on the part of businesses that ship on open account terms to any size company.”

A number of large U.S. companies covering a variety of market sectors recently have been at or near the top of the Euler Hermes major worldwide insolvencies list, including:

·         US Air, Delta Air, Northwest (airlines);

·         Cornerstone Propane Partners, LP (oil and gas exploration and production);

·         Interstate Bakeries Corp. (consumer products);

·         Trump Hotels & Casino Resorts Inc. (media and entertainment);

·         Delphi, Oxford Automotive Inc. (automotive).

The effects of a major corporate insolvency can be far-reaching, as every company that has done business with the entity seeking bankruptcy protection will see some sort of interruption in expected cash flow. “Disruption of cash flow never comes at a good time for any company,” Ketzner explained. “By utilizing protective measures—such as trade credit insurance—a company can safeguard its accounts receivable and cash flow when doing business with any company, large or small.”

Risk mitigation is also an important part of the process. For example, Euler Hermes ACI monitors its policyholders’ risk through its proprietary information database, offering clients not only the ultimate peace of mind in the form of an insurance policy but also an early warning system for their existing or prospective clients should a troubled financial position arise.

Source: Euler Hermes/NACM E-News Weekly Update, October 25, 2005

LUMBER NEWS – QUICK GLIMPSES 

European Commission to Crack Down Illegal Logging… On Monday, European Union governments agreed to new measures to fight illegal logging. The practice of illegal logging costs $18 billion annually, and the effects are hardest felt in poor, developing countries.

“There is a lot of concern about the use of illegally harvested timber. This sets up a licensing system for countries with which the EU has a partnership,” one EU diplomat said. “It will identify timber that is legally harvested. It’s not a 100 percent solution but it’s a step forward.”

Louis Michel, European Commissioner for Development and Humanitarian Aid, stated: “All major timber importing countries have to recognize the vital role they must play in closing down the international trade in illegal timber. Today we are showing the way. I strongly encourage others to join our ranks.”

Source: LBM Daily, October 25, 2005

Rice Meets with Pettigrew, Remains Optimistic Regarding Negotiated Settlement… U.S. Secretary of State Condoleezza Rice met with Canada’s Foreign Minister Pierre Pettigrew on Tuesday, and expressed optimistic interest in negotiating a settlement to the long-running softwood dispute between Canada and the U.S.

Far from negotiating, some American businesses, however, want the U.S. government to capitulate and fully honor the NAFTA rulings. Several U.S. consumer representatives will be meeting with Canada’s Trade Minister Jim Peterson today, to discuss further options for Canada.

Source: LBM Daily, October 26, 2005

Wage And Hour Suits…According to an article in Labor Update, wage and hour lawsuits, particularly those that claim overtime violations, have increased 25 percent in the last two years. The real problem is that many of these suits are now being filed as class action lawsuits.  Attorneys are always looking for these types of suits, as they are financially very rewarding. In many of these suits, the standards of the Fair Labor Standards Act (FLSA) are being violated, and you may not even be aware of it.

You must be able to determine who is exempt from overtime and who is not. Remember, those that are exempt are “bona fide executive, administrative, or professional employees” as defined by the Department of Labor. It could really save you money to check and see who you are treating as exempt and make any corrections.

Source: Management Tips, October 2005, by 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.

Cities, Counties Demand 13.3% Sales Taxes… Under current law, Kansas cities and counties can each levy up to 1% in local sales taxes for a total of 2%. The tax-paid lobbyists for the cities and counties are demanding up to 4% each for a total of 8%. With the current 5.3% of state sales tax, some cities would have a sales tax rate of 13.3%.

Secretary of Revenue Joan Wagnon held a meeting last week to try to develop a plan for restoring constitutional uniformity to sales taxes in Kansas. Unless it can be done, Kansas will not be in compliance with the rules of the national Streamlined Sales Tax Project (SSTP), and will not be allowed to enjoy SSTP benefits along with other states.

Source:  Kenneth Daniel (kdaniel@kssmallbiz.com) is a Topeka small business owner and free-lance writer. He is publisher of www.kssmallbiz.com, a website dedicated to Kansas small business.

U.S. Asks for More Time to Comply with NAFTA Ruling, Canada Upset… On Friday, October 28, the U.S. asked for more time to respond to an October 5th NAFTA ruling that requires the U.S. to “drastically cut some duties on Canadian softwood lumber exports.”

The decision has upset Canadian officials, who were hoping that this most recent ruling would spur America to action.

Source: LBM Daily, October 31, 2005

Tax Cuts Undercut Economy… Tax cuts enacted since 2001 have already hurt the federal budget to the tune of $929 billion, yet the promised economic boost to jobs, income, business investment, and GDP have failed to materialize. Today's Snapshot (http://www.epi.org/content.cfm/webfeatures_snapshots_20051026) by Economic Policy Institute research director Lee Price illustrates that tax cuts failed to boost major measures of economic activity. The one exception was the outstanding growth in housing investment, which faced higher effective taxes since 2001, showing that higher taxes need not impair growth.

Source: The Economic Policy Institute/NACM E-News Weekly Update, November 1, 2005

Construction Faces an Uncertain Future (Ventura County Star (CA) (10/05/05); Macchiarella, Gretchen)… After the initial spike in lumber prices and predictions of vast building material shortages in the wake of Hurricane Katrina, the effects of the storm on building supplies and the construction industry as a whole appear to be calming, though ripple effects are expected to come in another six months to a year, when the rebuilding process truly begins. Between late August, before Hurricane Katrina hit the Gulf Coast on Aug. 29, and Sept. 23, the price for 1,000 board feet jumped from $267 to $326, but the price is now winding back down toward $300. Sheets of half-inch plywood that cost $13 to $14 in April are now priced at about $18. “It's no different from the normal fluctuations in the market, this is just a big spike,” says Bart Weber, manager of Ventura, Calif.-based Stock Building Supply. Builders are still waiting to see what the long-term effects of Hurricane Katrina will be on the industry.

Richard McArthur, manager of Ojai Lumber Supply, says the storm should only have “a short-term effect right now,” and he predicts prices will continue to drop. Even before the storm hit, builders were dealing with some supply shortages of lumber, steel, and cement, as well as rising gas prices. Ken Simonson, chief economist for the Associated General Contractors of America, predicts that the cost of construction materials will increase 10 percent next year, compared with earlier predictions of 6 percent to 8 percent. Meanwhile, the Commerce Department is reporting a 0.4 percent increase in total construction spending in August, which represents the largest rise in spending in three months.

Source: NLBMDA Industry News, November 1, 2005

Canadian PM in Favor of Free Trade, Provided Everyone Plays by the Rules… Canadian Prime Minister Paul Martin made a statement in support of increased free trade within the Americas, so long as all the countries involved agree on the rules: a thinly-veiled criticism of the Bush Administration’s refusal to refund softwood lumber tariffs to Canada.

“The fact is that President Fox, myself, President Bush, all of us believe strongly in the free trade of the Americas. But we know that it’s got to be based on rules - and rules that are listened to,” Martin announced.

Source: LBM Daily, November 7, 2005

Avoiding Distractions

Late-model cars and trucks are sometimes equipped with global positioning systems, digital maps and even devices to check e-mail and surf the Internet. Add cell phones and drive-through meals, and you could almost run your business from your vehicle.

As the list of features for new vehicles expands, so do the opportunities for distractions.

More than ever, drivers must make a conscious effort to handle distractions and avoid driving mishaps. Take the following precautions to reduce the likelihood you will be distracted while driving:

·         Finish all food and beverages before driving.

·         Review paperwork, such as delivery orders, work schedules and directions, before getting behind the wheel.

·         Eliminate the use of cell phones while driving and allow incoming calls to go to voice mail.  If a call is necessary, pull over and park in a safe location.

·         Before driving an unfamiliar vehicle, become familiar with controls, such as lights, mirrors, wipers, and cruise control, and make adjustments.

·         Review a map of the route before starting out, or have a passenger navigate.

·         Pull over safely to deal with passenger distractions.

This article is an excerpt from The SHIELD^sm  a periodic newsletter published by Federated Insurance Companies. It is intended to provide general recommendations regarding risk prevention. It is not intended to include all steps or processes necessary to adequately protect you, your business or your customers. You should always consult your personal attorney and insurance professional for advice unique to you and your business.  ©Copyright 2005 Federated Mutual Insurance Company, All Rights Reserved