Wednesday, August 19, 2009
A recent survey of senior U.S. manufacturing executives examines their midyear outlook for the U.S. economy, attitudes toward the proposed cap and trade legislation, and current international presence and expansion plans. Baker Tilly commissioned the survey and KRC Research conducted it. Overall, the survey indicates a tale of two manufacturing sectors: the winners and the losers.

Three-hundred senior executives of small, medium and large U.S. manufacturing companies participated in the survey through telephone calls between June 2 and June 22, 2009. Here’s a snapshot of the survey’s key industrial economic outlook findings:

Cautiously optimistic – Nearly six in 10 senior manufacturing execs (57 percent) have a positive outlook for the U.S. economy over the next six months, but slightly (51 percent) more pessimistic about the outlook for the manufacturing sector.

Rightsizing – Over the next six months, 70 percent of manufacturers said they plan to keep staffing levels the same.

Brighter days ahead for some – About half of executives (49 percent) expect their firm’s performance to decline, with 12 percent (disproportionally small businesses) saying their firm is in danger of failing. Customer demand is cited as the top challenge to growth, followed by access to loans and credit, over the next 12 months.

Economic survival strategies – Over the next 12 months, the majority of manufacturing execs expect to reduce costs across the board, such as operational (80 percent), supplier (65 percent) and labor (51 percent).

Staying the course – Despite pressure to reduce costs, executives are continuing to invest in their companies. The most common investments are in quality improvement systems (51 percent).

Bargain hunting – Among executives with plans for M&A; activity, 85 percent report no change in their plans, 12 percent plan to increase and 3 percent plan to decrease it. Among executives whose firms derive some revenue from outside the United States, 80 percent said most of their new customers over the next three years would come from domestic markets. However, more than one in four executives from large manufacturers cited most of their new customers will come from outside the U.S. during the next three years. For companies that conduct business overseas, China (44 percent) and Mexico (40 percent) were cited as countries that will play an increasing role in their global growth strategies during that same period.

The survey also showed that most manufacturing executives (59 percent) generally oppose legislation that includes a greenhouse gas emissions cap and trade system, but a sizable pocket of soft support exists among some executives (32 percent), especially those who are more optimistic about the U.S. economic recovery and the manufacturing sector.

See the executive summary of the report, and let me know your thoughts for the next six months. Are we done with the worst yet, or have we still not reached the bottom? Are we ready to take off and soar high? Will it be an easy or difficult takeoff?

—By Sahely Mukerji, news editor/managing editor, Glass Magazine
Monday, August 17, 2009
Every Memorial Day for at least eight years, my wife, Linda, and I have traveled to Tegucigalpa, the capital city of Honduras, for a week to be part of a medical and missionary team from our church, Fellowship Bible Church of Little Rock. We go out into the city and set up a site with doctors, dentists, an optometrist, a pharmacy and a children’s area. The peoples’ physical needs are the draw we use to then address their spiritual needs, which are our true focus.

This year is particularly special, as we will travel to Honduras at least three times to help build a new mission home for World Gospel Outreach, our yearly host.

On July 14, Linda and I traveled to Tegucigalpa with two ACE Glass Co. associates, Blake and Isaac; our good friend, Johnny; and our middle son, Chris. Amidst the political turmoil, we set out to install the aluminum, single-glazed windows that had been sent a few weeks before our arrival via an emptied Dole banana container going back to Honduras.

In 3-1/2 work days--with occasional help from two very energetic Honduran men, Antonio and Caesar-- we installed 200 window units. Isaac, being bilingual, instructed four Honduran men, believed to have some caulking proficiency, how we wanted the backerod installed and the bronze GE Silpruf applied. They turned out to be pretty good caulkers and are reported to be doing a fine job in our absence. We’ll find out personally when we return in September.

We have about 40 remaining windows units to install in the basement and two other buildings; the holes weren’t ready in July. We will then install a beautiful executive office entrance provided by Alpha Door & Rail and M3 Glass Technologies with DecoTherm logo and 18 Vistawall Oldcastle aluminum doors, frames and sidelites.

These trips are very rewarding personally, and the Hondurans are vocally appreciative to have us help their country and them. Their smiles and laughter are infectious. You can’t imagine how economically poor they are until you experience it.

By Newton Little, executive vice president and co-founder, ACE Glass Co., Little Rock, Ark.
Monday, August 10, 2009
I just got back from a two-day trip with my two partners to visit a colleague in the glass business 1,500 miles away. Some would say that now is not the time to spend money on flights and hotels, and that they can't spend time away from their businesses when times are tough. I say that it has never been more important than it is now! None of us can just keep doing what we have always done and hope to thrive, or even survive. Now is the time to tap your network for all kinds of ideas: new products, new applications for old products, management techniques, efficiency improvements and more.

Some business owners fear they will send the wrong message to their employees if they travel while tightening the belt on most everything else. These fears are easily assuaged, however, when you return with ideas that you can immediately implement to save money and improve the business. Share what you find with your managers and employees and make sure they see that the positive changes are a direct result of what you learned from your contacts. Every time that we have done this--and we typically do it two or three times a year, including attending GlassBuild America: The Glass, Window & Door Expo--we bring back pages of good ideas that justify and pay for the trip.

For these trips to be successful, you need two things: someone who is willing to share openly with you and a willingness to reciprocate. The latter is most important, and if both parties believe that, the exchange will be the most fruitful. While some things are taboo--pricing for example, if you are competitors--don't put up any walls and don't hesitate to share ideas and experiences that will help your friend! It amazes me when people in this industry think they have discovered something that no one else has, and that they can best benefit by closing off their operation like a secret military base. If your focus is on openness and listening, you will always leave having gained more than you shared, and having profited more than you spent.

Time away from the daily routine and pressures also clears and frees your mind to see your company and people in a fresh light. You will return refreshed and energized. Start with GlassBuild America Sept. 30-Oct. 2. Meet up with friends there, and make some new ones. Attend the seminars and take notes. Before you leave, make plans to exchange visits with another company, or to visit a valued supplier. Doing so will grow your business faster, improve our industry and even contribute to overall economic recovery!

--By Chris Mammen, president, M3 Glass Technologies, Irving, Texas
Monday, August 3, 2009
The following is the transcript of a July 27 letter from Chuck Knickerbocker, curtain wall manager, Technical Glass Products, Snoqualmie, Wash.,, to officials of NFRC.

I appreciate the work the National Fenestration Rating Council has done with regard to getting the residential window industry playing on a level field as it relates to ratings for energy performance. I have misgivings the same can be said for the planned rollout of the site built fenestration rating system as described in the July 15, 2009, NFRC-hosted Webinar.

I have no doubt that energy is a prime concern. As an architecture major in the late '70s, I took both passive and active solar energy design courses in school. That was avant-garde then, and things like Leadership in Energy and Environmental Design, the high cost of energy, and long gas lines of the '70s have made a lot of us conscious of the energy side of the products we build and sell. I drive a Prius. I know the issues, and NFRC’s planned rollou--and more immediately California’s requirement that site built fenestration be certified by Jan. 1, 2010--does not appear to be ready to respond to actual, everyday conditions as they presently exist.

Having 28 years in the glass and glazing industry, as a subcontractor, a consultant and now as a frame supplier, there appear to be many loose ends. Can you help me with some answers with the questions herein, please? And thank you.

1. The NFRC size for modeling may or may not represent actual conditions on site. Certification of a window of an arbitrary size that doesn’t duplicate the site built conditions may lead to:

a. A unitized wall panel, for example, with its varying framing methods, which cannot be accurately modeled in the CMAST program as demonstrated at the Webinar.

b. Certifications of walls that may perform better or worse than the NFRC size expose the qualifying entity, most likely the subcontractors, to huge liability issues.

c. As a result, NFRC certification may or may not indicate actual performance of a given wall product.

d. Is this a possibility, and what do we do if we encounter this? What is NFRC prepared to do to assist the glazing subcontractor if this occurs?

2. Fenestration rating for curtain walls: does this just cover the glass industry? What about the other “curtain walls” (non-load bearing building skins) that are out there? Does NRFC have a say in rating precast concrete and window systems? How about Stucco? Masonry? GFRC? Stud-built systems with either terra cotta, stone, brick, or EIFS? How do we get those rated come Jan. 1, 2010?

a. Should we just be concerned about the glazing portion of these walls?

b. What about other glazing materials that get mounted into any of the variety of steel or aluminum curtain walls? Composite metal panels for one, or granite? How do we get a California building inspector to accept a certification in January that NFRC is not presently prepared to offer? Architects aren’t going to stop designing these systems with these components.

3. Has the NFRC involved the one entity that has to pay for all of this, the building owners? This includes federal, state, and local governments, who can fob it off to the taxpayers, but:

a. Time to schedules will be required to allow testing of custom curtain walls not previously built to be tested and certified. The response to this question in the Webinar was it could happen in as little as two months. If it takes longer, then what?

b. What happens if the designed custom wall the owner’s architect has put in the drawings doesn’t get rated or certified? Is that the glazing subcontractor’s problem? The architect’s?

c. The owner’s going to be impacted, that’s for sure. Do the building owners realize that a huge cost impact to their projects just got dumped on them?

d. And do they know that a certificate of occupancy can hang in the balance should the certification not meet the building inspector’s expectation?

4. NFRC is out there trying to alert the one entity that will be charged with getting the certifications, that being the glazing subcontractors. They’ll enlist the help of the glass or frame suppliers, but they have to include the cost and schedule impact into their estimates.

a. The Glass Association of North America has been trying to clue the glass and glazing subcontractors in, but they haven’t been made to understand the impact. They won’t until they have to experience it first hand.

b. Jobs being bid right now for 2010 will miss a significant cost in their estimates. That’s never good for owners or subcontractors. They’ll be burned on the cost of the first one, and then the owners will feel the impact on the next job.

c. Except there will be one glazing sub on the next project being bid that won’t know what they are about to walk into, and their price won’t include any of certification, and they will get the job because they were the low bidder. The playing field will not be level at bid day. And delays will be incurred while they absorb the cost impact to get certification.

d. All while at or near the end of the job, when the owner’s trying to get the CO, the owner, architects, general contractors, as well as the sub’s bankers and bonding company will be breathing heavily on their necks to get the certification.

5. TGP’s in a unique position. What has priority: fire rated partitions or the energy requirements, both of which by code are required? The issue comes down to public safety or energy code compliance. Who gets to decide the fate of that issue if a fire rated fenestration product can’t get certified as being compliant with the energy code?

I don’t think I’m overstating the case as it presently stands. And NFRC may have plans to implement and eventually deal with the contingencies. But what do we do in the meantime? Seems the only resort is to plead our case for the building inspectors of the world to grant us an exemption. That’s a risk, too. It can be naïve to think they may approve the exception, and worse, the consequences when they won’t. It’s also naïve to think the NFRC CMA certification will cover all conditions after Jan. 1, 2010.

There appear to be too many loopholes. How we can work within what appears to be a very difficult situation is of extreme interest to us. I’d be curious as to NFRC’s reaction to all this. It may help us plan and implement TGP’s approach a little better.

The opinions expressed here are those of the individual author and do not necessarily reflect those of the National Glass Association, Glass Magazine editors, or other glassblog contributors.
Monday, July 27, 2009
We’ve been hearing some positive economic news lately. New-home sales jumped 11 percent in June. The Dow managed to top 9,000, and Goldman Sachs reported $3.44 billion in second quarter earnings earlier this month. Larry Summers, top economic advisor for President Obama, said the economy is “back from the abyss” in a July 17 Forbes article.

According to a July 20 Bloomberg report, the index of U.S. leading economic indicators rose in June “reinforcing signs the economy may be emerging from the worst recession in five decades.” James O’Sullivan, a senior economist from UBS Securities LLC in Stamford, Conn., predicted in the article that the recession will end in the third quarter. “We’re moving in the right direction,” he said. And the results of a recent National Association for Business Economics shows the economy recovering, albeit slowly, during the last half of this year, according to a July 20 article from MarketWatch.

But just as I start to take a nice long sigh of relief, I start to hear the strong, scary and convincing words of warning from folks who are not so optimistic about the economic recovery.

Paul Krugman, for one, the Nobel Prize-winning economist and columnist for the New York Times, queried in his July 12 column whether America was becoming a “boiled frog,” lingering in increasingly hot water, unaware of the fact that it will soon be boiled alive. “Now that the free fall is over, all sense of urgency seems to have vanished,” he said. Krugman predicts a painful jobless recovery, with unemployment rates staying high through the end of 2010, and with many unemployed losing their savings and homes.

Many in the glass industry also are unsure about the economy’s recovery. In a July 7 e-glass poll, only 20 percent of respondents said the economy had bottomed out.

So, where does that leave us? Will Wall Street recover in the near future, while Main Street continues to trudge through a recession into 2010? Could things on both streets just keep getting worse? Or are we all actually rising from the economic abyss? What’s your take?

--By Katy Devlin, commercial glass & metals editor
Saturday, July 18, 2009
In a CNBC Financial report, I heard an investment guy who summarized it all brilliantly.

He was discussing the fact that emerging market funds will be where the money is made. He said that the Chinese are using their currency to buy up and hoard commodities (oil, metals, etc.) at the current bargain prices in preparation for the turn around that will surely come at some point in time.

He said this: “The U.S. will lag the recovery because we have so much bad spending to digest. The rest of the world is financing growth opportunities, while we’re in the USA financing entitlement programs. Where would you put your money?” That just about says it all.

Here are some of the key points of the bills approved in the House this week: You will pay a 5 percent excise tax if you earn more than $280,000 in order to fund health care. Businesses will be forced to pay a “fine” of $375 for every part-time worker if they don’t offer health care. That one is sure to create jobs for our younger workers and the marginally employed.

Yep, it’s a real incentive to hire people who might not even generate that much in profits during a year. In one scenario: You have employees who only work five-to-10 hours per week because this is a second income for “fun” money in their homes. These are typically people who already have health care through their spouses’ employers, but under Obama-Care you'd be forced to pay a fine if you don’t offer them a program. You'd likely lay them off first if you can’ t make a reasonable profit. That model will be repeated over and over in our country.

Oh, it gets more than just interesting. This proposal could cost you even more.

It could even be worse; one of the Democrat proposals is an 8 percent tax on salary if your annual payroll is more than $400,000 for your company. How much good do you think that will do for small businesses? It doesn’t take much to hit an annual payroll of $400,000. If you take an 8 percent hit of $32,000, you might not have any profit left for many small businesses.

This is mind-boggling. Tell me how you feel about what is being proposed by posting your thoughts.

— By David Walker, Vice President of Association Services, National Glass Association

The opinions expressed here are those of the individual author and do not necessarily reflect those of the National Glass Association, Glass Magazine editors, or other glassblog contributors.
Monday, July 13, 2009
There are only three three things we can control:
1) Our work habits
2) Our study habits
3) Our attitude

It is easy to define work habits. At Evans Glass Co., we define our work habits by what we call The Five Main Things; communication, daily quality results, customer service, teamwork and personal growth.

However, our study habits directly influence our attitude. Consider an analogy of the Dead Sea and the Sea of Galilee. Nothing new enters the Dead Sea. Consequently, it is generally lifeless and stagnant. The Jordon River runs through the Sea of Galilee bringing with it fresh growth and new life.

Our minds are similar. Without studying something beneficial, our minds are like the Dead Sea. Nothing new enters and our attitude begins to deteriorate. We become mired in the same muck as last week, last month, last year, last decade.

Read a book. If we read a positive self-improvement book only 15 minutes per day, we will read about 300 pages per month. That is more than one book per month. Attend a seminar. One hour or one day at a seminar will stimulate our minds and get us focused on positive change or growth.

Attend GlassBuild America. A few hours or days with our peers will rejuvenate us. The flow of new information, or old information from a new source, will change our attitude. The improvement of our study habits leads directly to a positive attitude. Remember we can't eat anything we want and lose weight simultaneously. Improving our diet--study habits--leads to better health--improved attitude.

—Bill Evans, president, Evans Glass Co., Nashville
Monday, July 6, 2009
Anybody who knows me knows I am easily enthused. Let's face it, sometimes the little things, even the most trivial, matter. And I am excited as I pen this note on this beautiful July 4 weekend.

True, my mood was just brightened as I listened to the Brewers walking in the Cubs’ winning run in the bottom of the ninth. Sorry, fellow Domer/Brewer Craig Counsel. Them’s the breaks.

But my excitement today goes beyond another Cubbie win.

As Dutch might have said, “Well … we made it.” The worst is behind us. The economy has bottomed out. And not a moment too soon. So the economists tell us.

Monday's headline news affirms this: "U.S. service industries--from retailers to homebuilders--contracted last month at the slowest pace since September, a sign the worst recession in half a century is easing," said economists at the Institute for Supply Management.

Indeed, while many businesses and individuals are still struggling mightily, many manufacturers, suppliers and glass shops have gotten through the worst in decent shape. A few are even flourishing. All is not well--by a long shot--but the proverbial light appears to be flickering at the end of this very dark and dreary tunnel …

The first half of this year was akin to drinking ditch water on a hot summer day. It’s all we had, so we had to drink it; but it sure tasted awful. Hopefully, we've buried that ditch once and for all and that gorgeous, sparkling oasis we see in the distance isn’t a mirage.

As we soldier on, several interesting threats--aka, opportunities--remain.

GE CEO Jeff Immelt was quoted this week as saying that our country needs more manufacturing. We know how true that is; especially in the glass industry.

But China remains a major player in the manufacturing arena. A few months back, I was impressed when Ford Motor Co. announced that it now has the same labor cost structure as Toyota, at some $50 per hour. I was equally shocked to learn that Chinese firms can produce cars at $13 per hour of labor. So the competition is there.

But so is the opportunity.

Indeed, if Immelt’s challenge is to be met, we as a nation must make some important, tough decisions. We need policies that support job creation, without being protectionist. Now more than ever, our unified involvement is needed.

The Obama administration is already talking about a second stimulus package, based on last week's abysmal job creation numbers. What shape it takes, who knows? But we all know that government can only do so much. At some point, the private sector must step up and make the real difference.

In speaking with NGA board member Kevin McMahon last week, he indicated the local association meetings he attends are brimming with business people doing just that. These tough times are clearly prompting people to reach out and connect, network, and yes, create their own economy! It seems we’re all tired of drinking the ditch water.

We’re seeing this play out with GlassBuild America too. If early registrations are any indication, we could be on pace for a wonderful year! In fact--all things being equal--we’ve seen equivalent, if not higher, registrations for this fall’s show than we’ve seen over the previous two years.

You know what I’m going to say here …

It’s time to network, build your business and create your own economy! And there’s no better place to do that than at this fall's GlassBuild America expo. Register today to attend. I promise: We won’t be serving ditch water. After all, ditch water is for dogs; it’s time to drink from a better source.

And if you're looking for a book to add to your summer reading list, try "Create Your Own Economy: The Path to Prosperity in a Disordered World," by Tyler Cowen. Just released, this quick and timely read focuses on how you win by innovating, sharper thinking and working harder.

— By David Walker, Vice President of Association Services, National Glass Association
Friday, June 26, 2009
How much involvement should the federal government have in the personnel policies of U.S. business owners? That is a question at the heart of the debate surrounding the Healthy Families Act (H.R. 2460/S.1152). If passed, it would require employers with 15 or more employees to offer paid sick leave to their staff: about seven days per year for full-time employees and one hour for every 30 hours worked for part-timers.

In an industry that has shed nearly 1 million jobs in the past year, according to the Associated General Contractors of America, construction companies and their suppliers have had to come up with creative ways to avoid layoffs. The introduction of mandatory paid sick leave could mean the difference between making payroll or not, argue Associated Builders and Contractors officials. "Small businesses across the country are struggling to keep their doors open in these trying times and mandating paid leave will only aggravate this already fragile situation, they stated in a June 10 letter to the House of Representatives. "At a time when employers are struggling to avoid layoffs and business closures, imposing paid leave mandates on employers is unwise policy that threatens jobs and the viability of many of the nation's small businesses," they stated.

Proponents of the act, however, point out that many Americans feel forced to go to work when sick for fear of losing their jobs or a day's pay. "There's something wrong when people have to choose between their jobs and taking care of themselves or their families when someone is sick," said Rep. Rosa DeLauro of Connecticut in a New York Times article

I think we can all agree that employees should be able to take a sick day if they or their family members are ill. The question is, on whose terms? Should sick day policy be up to the employer or the government?

—By Jenni Chase, Editor, Glass Magazine
Thursday, June 18, 2009
On June 10, the ConsensusDOCS coalition published 11 new contract documents and forms to help make bidding, negotiating and managing construction projects easier and more efficient for sub-contractors.

At a time when the stimulus and other federal construction programs are rapidly expanding, general and specialty contractors will benefit from using the first standard subcontract to address new complex contractual rules and regulations for federal government projects, according to a June 10 release from the AGC of America.

“With America looking to the construction community to rebuild our economy and restore our hope, the last thing we want is contractors being excessively burdened by complex rules and regulations,” said Tom Kelleher, senior partner in Smith, Currie & Hancock LLP and chair of the national coalition of associations who wrote and endorse the new standard contract, in the release. “The new ConsensusDOCS federal subcontract will keep needed construction projects from getting tangled up in red tape.”

The new document, known as ConsensusDOCS 752 – Subcontract for Federal Government Construction Projects, addresses the terms and conditions needed for subcontractors and contractors to comply with Federal Acquisition Regulations, Kelleher noted in the release. The contract also addresses new legal and ethical requirements pertaining to the legal status of employees, complying with ethics rules, as well as federal Prompt Pay Act requirements.

The document was written, reviewed and approved by a team of professionals representing every part of the construction process, including contractors, subcontractors, owners and sureties.“There is no need to reinvent the wheel every time someone wants to engage a subcontractor or work as a subcontractor on a federal government construction project,” Kelleher said.

ConsensusDOCS contracts are the first and only industry standard contracts written and endorsed by 22 leading construction organizations, according to the release. They offer a catalog of more than 90 contract documents covering all methods of project delivery, and utilize best practices to represent the project’s best interests. Endorsing organizations represent designers, owners, contractors, subcontractors and sureties.

Take a look, and let me know if the new contract documents will make life easier for you to bid on a federal or stimulus-funded job.

—By Sahely Mukerji, news editor/managing editor, Glass Magazine
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