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Friday, March 13, 2009
Feeling down about the hits your 401K has suffered during the last year? Well, as they say in Minnesota, it could be worse … a lot worse.

March 12, Forbes released its list of the world’s billionaires. This year, the list sits at 793, down from 1,125 in 2008. “The typical billionaire is down at least one-third in their net worth,” said Steve Forbes, Forbes CEO. That includes Microsoft founder Bill Gates, who lost $18 billion—30 percent of his worth. Despite the losses, he did manage to reclaim the title of the world’s richest person with a total worth of $40 billion. Phew.

Forbes highlighted the biggest billionaire losers, including K.P. Singh, who lost 83 percent of his net worth. The driving Indian real estate boom made Singh the world’s richest real estate baron, a title he held for a very hot minute. The real estate market crash and the slowdown of the Indian economy caused Singh’s net worth to drop $25 billion during 2008. His current net worth is $5 billion.

Those sky-high metals prices that squeezed the glass industry during 2006-2007 gave a big boost to the net worth of Russian aluminum tycoon Oleg Deripaska. In turn, the sharp decline in demand for aluminum, nickel and copper as a result of the credit crunch and overall manufacturing slowdown caused Deripaska’s worth to plunge $24.5 billion to $3.5 billion.

The end of the Las Vegas building boom hit Sheldon Adelson hard. The Sin City property developer lost $22.6 billion during the year, falling to a net worth of only $3.4 billion, an 87 percent loss. Ouch.

Despite the economy, some rich managed to get richer during the year, according to the Forbes list of winners. Forty-four billionaires increased their worth, and 38 new billionaires made the list. The top three earners include: New York Mayor Michael Bloomberg, who managed to increase his net $4.5 billion to $16 billion; John Paulson, a hedge fund manager who predicted the U.S. economic plunge, doubling his net worth to $6 billion; and mathematician turned stock-market-algorithm developer, James Simons, who saw $2.5 billion in gains last year, bringing his net worth to $8 billion.

According to a National Public Radio report, Forbes and the magazine’s editor Matthew Miller offered some insight on what the winners did right. Location became a huge factor, differentiating winners and losers, Forbes said, as most billionaires that fell off of the list came from emerging markets such as India and Russia. The best place to live is “still in the United States,” Forbes said.

Miller added that the earners invested in the tangible, such as John Paul DeJoria who owns Paul Mitchell shampoos and Patron Tequila. “Liquor is something people like in a recession,” he said.

Forbes said future billionaires will be those who capitalize on the current economic situation and work to create something better.

Katy Devlin, commercial glass & metals editor, retail glass co-editor, Glass Magazine
Friday, March 6, 2009
As the unemployment rate continues to rise, hitting 8.1 percent in February, more glass company owners find themselves having to navigate IRS instructions on how to claim credit for the Cobra medical premiums of former employees.

Under the American Recovery and Reinvestment Act of 2009, eligible former employees enrolled in their employer's health plan at the time they first lost their jobs are now required to pay only 35 percent--as opposed to up to 102 percent--of the cost of Cobra coverage, according to a release from the Internal Revenue Service.

So who pays the other 65 percent? You guessed it: the employer. If your company has a group health plan that is subject to federal Cobra continuation coverage or similar state law requirements, and you receive a 35 percent payment from an "assistance-eligible employee," your company is responsible for paying the remaining 65 percent of the Cobra premium.

The good news is that employers can claim these subsidies as a credit on their quarterly payroll tax return. The IRS will send Form 941, the revised "Employer's Quarterly Federal Tax Return," to about 2 million employers in mid-March for companies to use when claiming the new Cobra premium assistance payments credit.

Detailed information on the new law, in effect as of Feb. 17, is available at http://www.dol.gov/. For additional information on the Cobra medical coverage credit, in addition to an exhaustive Q&A; on the subject, click here.

—By Jenni Chase, Editor, Glass Magazine
Sunday, March 1, 2009
Climate Change and Cap and Trade have been the focus of the industry in the last few months. At Glass Association of North America’s fall conference last September, officials and members discussed the issues at length. Climate change will have a huge effect on the glazing industry, said Kim Mann, general counsel, GANA, at the conference. “The feds are taking it up, and California, not surprisingly, is in the forefront. What happens in California, won’t stay in California, it will move east,” he said.

The White House expects President Obama’s $646 billion Cap and Trade plan will begin generating revenue for the government in 2012. The plan is expected to bring some $80 billion a year from 2012 to 2019, according to a report in the U.S. News & World Report.

California has implemented the AB 32, or Assembly Bill 32, the state level Cap and Trade greenhouse gas emissions regulation, said Steve Farrar, director, Guardian Industries, Auburn Hills, Mich., at the GANA conference. Numbers wise, what’s been proposed could jeopardize the profits of the flat glass manufacturers, said Bill Yanek, president, GANA. “The Educational Committee will do a study on how much greenhouse gas the glass makers emit, how much can be saved on energy if, for instance, low-E glass is used in a project, and find the ratio. Europe has such a study, but the United States does not,” Yanek said.

The California Air Resources Board’s Glass Manufacturing Sector Survey for owners/operators of three glass sectors--container, flat, and fiber glass--is now online. The ARB requires all glass manufacturers to submit the survey to determine if a regulation is needed to protect public health and carry out its other statutory responsibilities. The ARB staff is evaluating the potential strategies that the glass manufacturing industry can implement to achieve greenhouse gas emission reductions.

On the other side of the ocean, the European Parliament in Brussels adopted the Climate Change package in December last year. The package confirms the EU binding target of 20 percent renewable energy share by 2020 as well as 20 percent reduction on greenhouse gas emissions and a 20 percent improvement on energy efficiency.

The European Commission’s emissions trading plan would lead to additional costs of an estimated $336.7 million to the glass industry in Germany alone, said Paul Neeteson, president, Federal Association of the German Glass Industry or Bundesverband Glasindustrie – BV Glas and glasstec 2008, at glasstec 2008 last October.

What is your take on Climate Change and Cap and Trade in the U.S.? What kind of carbon footprint do you believe the glass industry has? Should the industry be credited for its contribution in making a product green? How should such effects be quantified?

By Sahely Mukerji, news editor/managing editor, Glass Magazine
Sunday, February 22, 2009
Now there’s an idea made for tough economic times!

If your customers aren’t your best salespeople, this just might be the time to evaluate how you move from good to great in their eyes.

OK, I can hear you saying you’ve seen this movie before; but before you get back to the grind, I hope you’ll take a moment to reflect on the meaning of this simple, yet profound question: Are your customers selling for you?

Many auto glass professionals were challenged with the same question during last week’s National Auto Glass Conference in Orlando, Fla.

Keynote speaker Randy Pennington, an acclaimed author and business performance expert, inspired participants from the auto glass retail industry to examine their own successes and failures in this area. But he delved deeper than your typical consultant …

He didn’t focus on customer service, as important as that is.

He wasn’t talking about price, either; though we all know how crucial pricing is to our customers’ perceptions of value.

He wasn’t even harping on the quality of the products and services you deliver.

Pennington went well beyond basic business principles to examine the entire customer experience, the core factors that distinguish your business from the competition and drive repeat business.

The marketplace never lies. It’s not about the company. It’s what the customer wants. And the experience you give customers. The intangibles are what they seek.

Now, if you're looking for details ... well, I’m afraid you should’ve joined us in Orlando. And you can’t say I didn’t warn you! I simply can’t do justice to Pennington’s presentation in this or any other forum.

You could always try nudging one of the nearly 130 execs who attended the conference, many of whom are undoubtedly still reflecting on what they learned. I learned something about getting our customers to sell for us, too.

After all, few things are more valuable than peer networking, another key benefit of gathering in Orlando. See for yourself: we’ve posted a few photos and presentations from the event.

If you missed out this time, opportunities abound at future NGA events, most notably our popular Glazing Executives Forum and GlassBuild America: The Glass, Window & Door Expo this fall in Atlanta. I can assure you there will be plenty of breakthrough ideas presented during those events as well.

David Walker, Vice President of Association Services, National Glass Association
Monday, February 16, 2009
Las Vegas’ normally bustling McCarran International Airport is line free and calm. The dealers at the Palms Casino wait behind empty Blackjack tables. And the cranes at dozens of half-built Strip hotels, condos and casinos aren’t moving. The recession has hit Vegas—and this time, the odds seem to be against the house.

This city has been a developers’ playground since about 2005 when Steve Wynn started a Vegas building boom with the construction of his high-profile Wynn Hotel and Casino. In 2007, Bill Lerner, a Deutsche Bank gaming analyst, said the city wouldn’t be able to staff the 51,000 hotel rooms expected to come online by 2012, according to a Jan. 25 article in the Las Vegas Review Journal. Since then, projects have tabled or canceled, and only 19 percent of those rooms will be built.

Among the project victims listed in the article: Harrah’s Entertainment postponed work on the $500 million tower expansion at Ceasars Palace. Boyd Gaming stopped construction on the $4.8 billion Echelon project in August, and will reduce the scope and size of the project when construction recommences. And Las Vegas Sands Corp. halted construction on the $600 million Strip condo high-rise, according to the article.

Now with most cranes stilled, criticisms are rolling in about the work quality on some projects, built up in such a rush during the boom. According to a Feb. 11 Las Vegas Sun article, the building boom resulted in 12 construction deaths, numerous injuries and notable construction problems, including recently released news of the midconstruction downsizing of CityCenter’s Harmon tower due to improper installation of rebar.

And to top it off, gambling is down … way down (hence my trouble-free McCarran experience, and the lonely card dealers). The casino operators are suffering and Moody’s Investor Services announced earlier this month that 17 operators are at a high risk of default. Rumor is that even Trump Entertainment may be filing for bankruptcy.

The Vegas downturn is far from over, according to Keith Schwer, a southern Nevada economist, and the city should brace for a long lull before its next winning streak.

Katy Devlin, commercial glass & metals editor, retail glass co-editor, Glass Magazine
Monday, February 9, 2009
Business is tough as the United States—and the world—trudge through this recession. As profits slip, many company owners and execs are revamping their business strategies to make it through.

One Redlands, Calif., glass shop repairman chose a less-than-legal strategy to attract new customers. The Sun reported last week that Redlands police arrested Timothy Klenke for “launching spark plugs with a slingshot at [car] windows and then planning to solicit his victims for the repairs,” according to the article.

Klenke’s money-making strategy is a bit more rudimentary than Bernard Madoff’s $50 billion scheme, certainly, but is still every bit as illegal.

So, what are some companies doing legally to survive?

Home Depot made a sharp change in business plans, ending its trajectory of dramatic growth by laying off 7,000 employees and closing its 34-store subsidiary Expo Design Centers. Home Depot officials say they are retrenching, returning to business basics by focusing on in-store sales improvements.

IBM plans to get through the recession by targeting new customers in less-developed industries, officials announced Feb. 9. The manufacturing and utilities sector, for example, are less electronically savvy than other industries, such as banking, officials say.

GM’s strategy seems to be getting even more bailout money from the government. (Anyone know how I can get in on some of these bailout funds? I wouldn’t need anywhere near GM’s $13.4 billion—maybe just half that.)

Business Lexington, Kentucky, ran a column Feb. 5 offering some alternatives to closures and downsizing, including reduced work schedules and salary cuts. Dell and FedEx have both employed such techniques, according to the column.

What are you doing to help your company survive? Is your strategy working? Post a comment and let us know.

Katy Devlin, commercial glass & metals editor, retail glass co-editor, Glass Magazine
Friday, January 30, 2009
The House passed an $819 billion stimulus package, 244-188, Jan. 28. The stimulus is expected to create as many as 3 million to 4 million new jobs nationwide, according to a Jan. 29 bnd.com article. Construction workers, contractors and union officials across the country are hoping that the money set aside in the bill for building roads, bridges, schools and more will create jobs, according to a Jan. 30 article in The Washington Post.

The plan comes at a time when the percentage of the workforce receiving unemployment has reached a 25-year high, according to a Jan. 29 AP article in The New York Times. The construction industry has suffered its worst job losses in more than two decades, with 900,000 workers across the country unemployed, according to the Associated General Contractors of America, Arlington. And it could get worse. The trade group lobbied the Obama administration and Congress with 10,000 letters from its members, and expects most of its 33,000 member companies to lay off more workers, according to The Post article.

The stimulus plan, which sets aside about $150 billion for construction projects, would create or save more than 660,000 construction jobs, according to the AGC, of which about 13,300 could be in the D.C. region, according to The Post article.

The package is expected to give $638 million to the District, $1.23 billion to Maryland and $1.65 billion to Virginia for construction-related projects, according to the Post article. Illinois would get $1.8 billion for infrastructure, according to the bnd.com article.

Parts of the country have already started to see an uptick in construction. Other parts--such as Las Vegas, which experienced a major construction bust in the $3 billion Cosmopolitan Resort and Casino, the Crown Las Vegas, the Pinnacle Las Vegas, the Plaza Las Vegas and more--could follow suit.

What is your take on the effect of the stimulus package on “shovel-ready projects”? How will it influence your business and how soon?

By Sahely Mukerji, news editor/managing editor, Glass Magazine
Friday, January 23, 2009
If your company serves the residential market, you’ve no doubt witnessed the growing trend in building environmentally sustainable houses. It’s a movement that might never slow down.

The recent confluence of events--the housing/mortgage/foreclosure crisis, energy spikes, increased environmental awareness, the Obama administration with a stripe for ‘going green’--is simply accelerating a nationwide trend that had already begun to gain steam in several regions around the country.

A recent construction study by the National Association of Home Builders estimates that by 2010 as many as 10 percent of all housing starts in the U.S. will include some eco-friendly features. I’m not sure if that’s encouraging, especially when “some eco-friendly features” is an awfully vague term. Sprinkler timers, waterless toilets and attic vents are eco-friendly features, after all.

A key challenge, of course, is “designing green” affordably. Ironically, the size of the average American house has grown 140 percent since 1950, from 1,000 square feet to 2,400 square feet.

New houses in the U.S. are still dramatically larger than those in other developed countries. In fact, new construction starts is a key barometer of economic growth. When new construction falls, the markets react negatively. It’s ingrained in our thinking ... an American “virtue.” After all, bigger is better, right?

And yet there is no widely reported barometer of environmental sustainability. And even if there was, would fluctuations in the metrics move markets? Hmm ... an interesting notion.

Gas guzzlers and factories get the lion’s share of the blame for our environmental problems; but according to the “Architecture 2030 Study” constructing and operating commercial and residential buildings is responsible for almost half of the country's energy usage, with residential buildings comprising 21 percent.

Compare that to the transportation segment’s 27 percent and you see that residential home energy costs are more significant than most people realize. In the future, design will be essential to any solution. Some architects believe the focus should be on retrofitting existing buildings, rather than razing them and building anew. That, of course, would be a blow to new construction.

Perhaps it’s time we adopt a “new” mantra: Small is beautiful. At least that is the way a certain in-flight magazine author would have us think. Sarah Susank has just published her bestselling book: The Not So Big House: A Blueprint for the Way We Really Think. The book stresses quality over quantity.

And a ‘MarketWatch’ article further confirms the degree of this movement. The headline reads: “New homes get smaller. Say Goodbye to McMansions, Americans are buying ‘right-sized’ homes.” The topic de jour at the International Builders Show this past week.

But it requires us to look forward in a big way. Small is Beautiful: Economics As If People Mattered, a collection of essays by British economist E.F. Schumacher, resonates loud and clear. Sustainability may well become a new status symbol.

Check out the prefab Cellophane House on display at New York's Museum of Art: Could this be a vanguard of what’s to come? Note the solar panels: Now there may be a large opportunity worthy of exploiting.

We at the NGA are taking heed. We’ll soon announce a blue-chip executive industry discussion on the solar panel market at GlassBuild America on Oct. 1, 2009. Stay tuned for details on this must-attend event.

Remember: Small may be beautiful! That is, if the expected market shift does occur and your company is prepared to exploit the trend.

David Walker, Vice President of Association Services, National Glass Association
Friday, January 23, 2009
I'm sure you watched coverage of last week's plane crash in New York City. What a miracle that with a crash landing in the Hudson River, no one was killed or even seriously injured. Besides the obvious skill and courage of the pilot, what struck me was the rescue effort. Within seconds of impact in that icy water, the plane was surrounded by scores of ferries with rescue workers, dry clothes, blankets and first aid.

When asked how they could respond so quickly and efficiently, the rescue workers all cited one thing - training. One of the ferry captains said this: "You train so much, you don’t have to think about it. I didn't have to give any orders to the crew.”

While it may not be quite so dramatic, many businesses resemble their own version of a plane crash these days. With the current state of the economy, there are projects being delayed, payments not coming in, plant closings, and layoffs. When the moment of impact comes for you (and it just may), will you be able to say the same thing as that captain?

Here at the NGA, we believe in training. Moreover, we see first-hand that the best companies in the industry are the ones that continuously invest in their people; in good times and bad. That's why we work so hard to produce industry-leading training platforms like the Glass Management Institute, the Glazing Executives Forum, and MyGlassClass.com. If you don't have your people taking advantage of this resource, then you're missing a significant opportunity to improve your business. (Visit www.glass.org/edu_train/edu_train.htm for more information on all our training programs and services.)


We know times are tight. We read the newspapers and watch our bank accounts. But now more than ever, you need to train your people right. When your own moment of impact comes, I hope you have the same level of confidence as that boat captain; that your employees are so well-trained, you don't even have to tell them what to do.
Thursday, January 15, 2009
In August, we launched a Scam Alert page on GlassMagazine.com to alert readers of fraudulent ordering schemes, including scams using fake shipping companies. Since posting the warning page, I have received numerous e-mails and calls from small business owners and managers in and out of the industry who have been affected. The same scams that have plagued the glass industry have hit vinyl dealers, print shops and even ice cream truck suppliers. Many owners caught the scam in time. Others were not so lucky.

I don’t want to belabor the point—I have blogged and reported on these scams previously--but the best way, and seemingly the only way, to beat a scam is to stop it before it happens. Know their tactics. Know the red flags.

According to my scam sources (a.k.a., business owners that have been scammed or nearly scammed), this is how the fake shipping company scam usually works:

  • A customer contacts a shop via relay operator or e-mail to order a large quantity of product; in the glass industry, it’s usually 1/8-inch or ¼-inch annealed glass. (Red flags: The email exchanges are often littered with misspellings and poor grammar, and often come from a Gmail, Yahoo or similar free e-mail account.)

  • The customer wants to pay for the product with a credit card and wants to ship the order a large distance, sometimes the end destination is across the country, sometimes it’s on another continent. The purchasing credit card is usually stolen. (Red flags: Scammers usually place an order for products they could easily get from a local shop, and the credit card billing address doesn't match the shipping address.)

  • The customer says they want to use their preferred shipping company to transport the product. The customer asks the business to pay the delivery company directly and says they will send a check or money order the business to repay the delivery costs. (Red flag: Business owners have reported scammers request to use the shipping companies AGC Delivery International, Ox Direct Shippers or Cargo Trust Shipping Freight Co.)


  • After the business has paid the delivery company, the scammer’s check or money order won’t go through, leaving the business without the thousands of dollars of delivery costs and with wasted product.

“We almost got taken. We had a order for approximately $12,000.00 to be shipped to Ghana. $6000.00 of that was shipping to be paid to via money gram to Agc Delivery International,” one business owner told me in a recent email. "I did not start checking things out until the three cards they gave me were declined. I typed the delivery company and your site popped up.”

Visit the Scam Alert page to see the latest postings from other business owners.

If you are contacted by a scammer, tell your peers and tell us. We’ll anonymously post your scam stories, fraud identification tips and any other advice you have on our Scam Alert page to help warn other business owners. Leave a comment on this blog, or e-mail me directly.


Katy Devlin, commercial glass & metals editor, retail glass co-editor, Glass Magazine

The opinions expressed here and in reader comments are those of the individual authors and do not necessarily reflect those of the National Glass Association, Glass Magazine editors, or other glassblog contributors.
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