Monday, March 30, 2009
The hard facts are cold. Things just aren't the same.

That's why it's time to raise some "Keynes."

Gotta admit ... Keynes got it right when he coined the term "Animal Spirits."

You know, that lively term that captures how human decisions reflect our "spontaneous urge to action," where a simple math equation just does not figure into how confidence builds in an economy. Human behavior ... the belief that we control our destiny at the end of the day. Destiny's hand is our own.

Enter Spring.

The phones are ringing again!

Powerful words were spoken over the phone by Tim Born of Glass Doctor in Rome, Georgia, last week to this writer. "Where January and February were dead, things have sprung to life again and I work 12 hours some days to keep up."

The sounds of a turnaround? Possibly.

In another phone call last week with a leading executive from Dow, I heard the word "growth." Yes, growth. What an adrenalin rush. I nearly fainted!

Time to feel better about things? Evan a tad? I know I did. Even got a burst of confidence when we sealed a nice new deal.

Just goes to show ... words are powerful.

Growth. Phones ringing. Sales.

That burst of returning confidence--which grew as the week wore on for me--offers a vivid example of what John Maynard Keynes called "Animal Spirits," the title of a lively new financial crisis book by George A. Akerlof and Robert J. Shiller.

The book explores how individual feelings and attitudes can affect the economy, building confidence--or not--and ultimately serving as the underpinnings of an eventual recovery. Shaping beliefs is what it’s ultimately all about.

You’ve heard the adage “pull yourself up by the boots-straps.” Well, you never heard a math equation pick up the economy. We do ... you and I ... by our actions.

"When people are confident they go out and buy; when they are unconfident they withdraw, and they sell," say the authors.

We at the NGA are not sitting idle; we're building confidence, bound and determined to lead our industry forward as countervailing winds try to alter our course.

You may have seen Phil James' recent note about how GlassBuild America is shaping-up, standing tall against those stiff headwinds. It's a must-read.

Buying and selling is still the name of the game. This Fall at GlassBuild America provides the perfect opportunity to seal some new deals, jumpstart 2010, and rejuvenate your spirits with solid learning and networking.

Don't hold back. Act with confidence. Jump back in the water again and start swimming. After all, many of life’s biggest decisions--“Should we have a baby?” “Should I buy Ford stock?”-- come "straight from the gut," to quote former General Electric CEO Jack Welch.

Remember, the engine that runs the entire economy is confidence. We shape that confidence each day with our customers, suppliers, employees ... and ourselves.

A must-read for these times: "Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism.”

Well, gotta run ... the phone is ringing!

P.S. Speaking of animal spirits ... head’s up: The card check issue we wrote about in an earlier blog is beginning to advance in the House, thanks to Big Labor’s influence. Stay tuned, and be ready to act. This is one animal whose spirit must be tamed.

David Walker, Vice President of Association Services, National Glass Association
Saturday, March 21, 2009
President Obama’s latest plan will allow the government to spend up to $15 billion to buy small-business loans that are now stalling community banks and lenders. That, in turn, will allow those banks to start lending again to small companies to invest, pay bills and survive, according to a March 17 article in The Washington Post.

Over the past decade, small businesses have created about 70 percent of the new jobs. As their credit lines have dried up, they have started to struggle or die. The $15 billion will come from a bailout plan already approved by Congress to rescue the financial sector. The president’s aides say the plan will offer fast, direct help.

Other White House steps to help the lenders include bigger lending guarantees, reduced fees and quicker turnaround times for loans. Treasury Secretary Timothy Geithner has urged the banks to start lending to businesses again. He also has ordered the Internal Revenue Service to issue new rules to help small businesses, according to The Post article. One of them will allow businesses that make up to $15 million to claim losses for the past five years in the current tax year. That amounts to a rebate on taxes paid in previous years, according to the White House.

In the meantime, the Small Business Confidence Index of the Small Business Research Board has increased slightly during the fourth quarter. The construction and contracting industry reported an SBCI of 34 during the fourth quarter, a three point increase from the 31 recorded during the second quarter of 2008, according to an SBRB study co-sponsored by International Profit Associates.

The higher construction and contracting SBCI resulted from a positive outlook regarding the general economy in the next 12 months with 40 percent of the respondents reporting expectations of an improved economy over the next 12 months; this is an increase of 12 points from the second quarter of 2008. Also contributing to the higher SBCI is the determination that 27 percent of respondents plan to increase hiring in the next year. This is up three points from the previous study held in the second quarter of 2008.

I’m interested to hear from the small glass and glazing businesses out there. What is your outlook on the president’s plan? Do you believe this is going to help you in any shape or form?

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