WEBBLog Archive, by Craig Webb, Editor, PROSALES
2006
2007
1/07 1/25 2/1 2/8 2/15 2/22 3/1 3/8 3/15 3/22 4/05 4/12 4/19 4/26 5/03 5/10 5/17 5/24 5/31 6/07 6/14 6/21 6/28 7/11 7/18 7/25 8/01 8/08
Window and Door Makers' Group Sees the Green Light, Hits Accelerator
Green issues got prominent play Tuesday during the Window & Door Manufacturers Association's summer conference in Cambridge, Md. Two of the day's five sessions were devoted to sustainable materials and environmental stewardship, and even the political update touched on energy policies. The association also officially rolled out "GreenZone," a sustainability resources section on its Web site. The green movement looks to be both an opportunity and a threat for the WDMA's members. Window and door makers can rightfully claim their products go a long way toward helping a household cut its energy bills. But members also fear that despite these efforts, they could be tarred as bad guys because of the ways they build their products or manage their properties. "It's a perception we have to address," E.L. "Pete" Walker Jr., OEM business manager for Huber Engineered Woods and chairman of WDMA's Environmental Stewardship Committee, told the group. He also noted that standards such as LEED for Homes "are evolving quite rapidly. WDMA must be the voice of the industry [when green standards are set]."
Regional LBM Associations' Salary Survey Expands To Cover More of U.S.
Many regional LBM associations have long had local salary surveys, but the one announced Sunday at the Southern Building Material Association's summer conference takes a big step toward creating a nationwide tool. The SBMA-coordinated effort includes data not just from SBMA's four states but also from 15 others stretching from Florida to Washington. It's still missing data from such big states as California, Texas, and New York, however. All told, the survey reflects reports from 378 dealers in 19 states who together employ 12,258 employs in 66 different job types and generate $4.66 billion in sales. The survey shows huge disparities between the absolute highest- and lowest-paid employees in many jobs but also what SBMA President Larry Adams and survey compiler Deborah Hayden view as remarkable similarities among dealers. For instance, of the 378 truck drivers' salaries reported by dealers, the absolute range was $7 to $27.42 per hour. But most dealers paid between $11.46 and $16.16 per hour, with the average being $13.71. The survey costs $199. To get it, contact the SBMA's Kathy Wooley.
SBMA Roundup: Great Weather, Dire Forecasts
Sunny skies, friendly waves and scores of rambunctious kids provided a great antidote to the downbeat message that dealers heard from the experts during this past weekend's Southern Building Material Association summer meeting in Virginia Beach, Va. At the shore, less than 200 yards from the meeting rooms, life was great. Inside, conditions were much darker. Edward Seifried of the Lafayette College Department of Economics and Business said the problems we're experiencing with late and defaulting subprime mortgages "will be three times worse next spring," thus slowing down prospects for recovery. Investment banker Rob Slee was even more dire, calling the subprime market's shakes "the first shot across the bow leading to a broader recession." And several other speakers pointed out the responsibilities dealers face managing their yards' trucking operations, providing for a safe working environment and properly overseeing the administration of company 401(k) plans.
ProSales Readers Issue Strong Opinions Over Spanish-Language Safety Instruction
You definitely had strong views about "Texan Responds to Comments Against Spanish-Language Safety Instruction," the second item in last week's ProSales Business Update. That story featured comments by John Smith, safety manager at Foxworth-Galbraith Lumber Co. in Dallas, noting that federal law requires an employer to train its workers "using both a language and vocabulary that the employees can understand."—in other words, in Spanish for workers who speak only that language. I've posted the letters in full on my blog. Here are excerpts:
- If the Labor Department is going to make it mandatory that companies provide multilingual safety instructions, companies should have the right not to hire non-English-speaking people. Safety is first, but English shouldn't be thrown by the wayside.—David W. Aldridge, Engineered Wood Products Specialist,Oso Lumber Inc., Arlington, WA
- When we boot the illegal immigrants out of the U.S. and take back their Social Security and health care cards then we might find the next step is to re-enforce the idea of English as the national language. Learn it and use it if you come here legally. Are we really going to become a nation of "all things to all people?" Whatever happened to the idea of "One Nation Under God?"—Ted Newman Jr., owner, Lakes Region Remodeling Co., Tuftonboro, NH
- A few years ago we explored converting our safety manual to Spanish to accommodate the growing number of Hispanic workers we were encountering. The safety consultant we were using discouraged it. Why? His explanation made great sense: the overwhelming majority of Hispanic construction workers in our area came from poor rural areas of Mexico and could not read Spanish. They were illiterate in their native tongue.—John Archibald, VP of Operations, Forge Lumber LLC, Cincinnati
- Workers should be federally required to fluently speak and write the official language as a condition of living and employment in this country. Employers should be required to provide proper instruction in the official language. If either chooses to avoid that responsibility, then they should be held accountable. Employers should not be forced to offer training in every potential language out there.—Eric Howes, Store Manager, Magnuson Lumber Inc., Castle Dale, UT
- I don't care what Hillary Clinton or anyone else says; English is the national language of these United States of America. The French, Germans, Japanese, Chinese or any other country will not change their language for me or you. Why should we?—Robert Riggs, Owner, Riggs Sales Service Inc., Lexington, KY
- Employers who hire and keep purely speaking Hispanic workers and provide a completely Spanish environment for them to work and operate in are adding to this communication barrier--and ultimately making the whole problem worse for all AMERICAN citizens, regardless of their original tongue.—R.W. Titchen, Territory Manager, GRK Fasteners
What's your view? Write to me with your thoughts.
Do You Ban Weapons at Your Yard? If Not, Read This
A story this past weekend in a Connecticut newspaper about a man arrested after he allegedly brought a 2-foot sword to the lumberyard where he used to work coincided with a presentation on workplace violence Sunday at the Southern Building Material Association's summer meeting in Virginia Beach, Va. Deborah Hayden, a former human resources director at Tindell's in Knoxville, Tenn., and now a consultant based in Chicago, noted that violence at the job is the No. 2 killer of people at the workplace. Among her tips: Ban workers from bringing weapons to the yard. This is particularly important during hunting season, she said. Also, during a job interview, be sure to ask: "Have you ever had a problem with your supervisor? How did you handle it?" The interviewee's response can tip you off as to whether that person has a propensity toward violence. And third, fire a worker on a Monday, not on a Friday. A person fired on Friday will have the entire weekend to stew about perceived injustices and could return on Monday loaded for bear. A person dismissed on a Monday can start looking for a new job on Tuesday.
Hurry! Just 3 Days Left To Take the Credit Card Policy Survey and Get the Report
With roughly 250 respondents already, it's clear that ProSales' special survey on credit cards will give dealers a great idea about the policies on cards that their peers are using. We will accept responses through Friday night, and plan next week to report the full results back to those dealers who took part and who identified themselves to us. If your company hasn't contributed yet, time is growing short. Click here to take the five-minute, 20-question poll. Individual results will be kept private. Please note this is a survey of pro dealers only. Contact me should you have any questions.
Texan Responds To Comments Against Spanish-Language Safety Instruction
John Smith, safety manager at Foxworth-Galbraith Lumber Co. in Dallas, responded quickly to a comment in last week's ProSales Business Update regarding an article in our July issue on whether some yard safety issues stem from Hispanic workers' problems with English. Walter Wilhelmi, warehouse and buying manager at Dealers Building Supply in Salisbury, Md., said the story took "the wrong direction," adding: "Last I looked, we live in America, an English-speaking country." Smith sent us an April 17 interpretive memorandum issued by Assistant Secretary of Labor Edwin G. Foulke Jr., reiterating federal policy on training The memo says, in part: "an employer must instruct its employees using both a language and vocabulary that the employees can understand. For example, if an employee does not speak or comprehend English, instruction must be provided in a language the employee can understand." Then Smith added, "Our safety training and safety programs are intended to keep our employees safe and free from injury. We owe it to them to make sure they understand how to perform the job safely. We also owe it to them to follow up and ensure that they are actually doing the job safely." Smith's e-mail signature, by the way, includes the words: "Safety is a culture. Not a program." What's your view? Write to me with your comments.
NLBMDA Joins Green Certification Debate With Comments on LEED
The National Lumber and Building Material Dealers Association (NLBMDA) sent the U.S. Green Building Council July 13 three pages of comments regarding the LEED for Homes guidelines to promote green construction. NLBMDA said it was "not at all appropriate" to grant LEED points exclusively to wood products certified by the Forest Stewardship Council, saying: "Providing an exclusive ‘right' to FSC within LEED precludes the use of products that are equally, if not more, environmentally friendly and supportive of sustainable forest management. … [R]ecognizing all ratings systems will greatly enhance the ability of dealers to provide builders with qualifying materials in a timely and cost-effective manner."
With Hayward's Ascension, a Lumber Guy Takes Over FSC's U.S. Board
Today marks the first day of service for Bill Hayward, CEO of Hayward Lumber, Monterey, Calif., as chairman of the board of the Forest Stewardship Council-U.S. Hayward—who also goes by the title of chief sustainability officer—runs what may be the most environmentally conscious LBM operation in the country. (See our ProSales article from last November.) He's not universally loved by his fellow pro dealers, and not all of his ideas are applicable across the nation, but what Hayward is doing does provide plenty of food for thought.
Encouraging New Numbers for Remodeling, Nonresidential Construction
Amid the depressing reports lately on the home construction market comes a pair of relatively upbeat news nuggets. First, Harvard's Joint Center for Housing Studies forecasts that homeowner spending for home improvement "will essentially remain constant through the first quarter of 2008." For this year, it now is expecting the remodeling market to grow 3% to $306 billion. And second, the Census Bureau reported Tuesday that the value of nonresidential construction put in place during June stood 14.1% above the level of a year earlier. In contrast, residential construction put in place was down 16.1% from June 2006.
Trex Numbers, Consultant's Forecast Suggest Decking Market Is Doing Fine
Trex Co.'s report Tuesday that net sales for the second quarter roughly totaled its year-earlier numbers ($118.8 million this year, $121.5 million in '06) might seem strange given how poorly the new-home market is doing. But a new forecast on U.S. demand for decking by The Freedonia Group clarified that when it pointed out that improvement and repair activity generates 85% of all decking sales. Freedonia predicts the decking market will show annual growth of 2.2% through 2011 to reach 3.6 billion lineal feet of decking worth $5.6 billion. Demand for wood decking will drop by 0.3% per year between 2006 and 2011 while demand for wood-plastic composites will go up by to 12.6% per year in 2006-11, Freedonia predicts.
An "Apocalyptic" Time for Home Builders, One Ex-ProSales Editor Says
"The last week has been an apocalyptic one for the home building industry," Boyce Thompson, former editor of ProSales and now editorial director of Builder magazine, said Tuesday in his blog column. "Public companies posted more than $2 billion in combined losses during the most recent quarter. Figuring that they might as well get it over with now, since no one expects the market to get better real soon, these companies took big impairments in land, and they abandoned option contracts. … Land write-downs partly explain how prices in that community of $320,000 homes suddenly dropped in the latest phase to $240,000." Thompson adds that the publicly traded home building companies are seeking to bolster cash flow, typically by making a sale as quickly as possible. He concludes: "This bloody week in July potentially speaks to even bloodier ones in the new home sales marketplace for the remainder of the year."
What's YOUR Credit Card Policy? Take the Survey and Learn From Your Peers
Do you take credit cards at your store? If so, which cards do you accept? For what kind of payments? And with what limits? Lots of dealers want to know what their peers are doing in this regard, so ProSales has created a survey to get a better idea of standard practices and how they've changed. Click here to take the five-minute, 20-question poll. We'll report the results, but your individual info will be kept private. Participants who give us their contact info (on the survey's final page) will get a copy of the full report before any of the aggregate info goes public. Please note that this is a survey of pro dealers only. Contact me should you have any questions. We'll report our findings in about two weeks.
Lots More Opinions Over the Green Movement and Wood
Peter Ganahl's comments last week in ProSales Business Update urging against the politicization of construction as a result of the green movement prompted half a dozen letters from you. I've posted several of them in full on my blog (to see them, look here as well as here). Among the most notable quotes:
- "It's crucial for us to join the dialogue on green building to ensure that real science is at play. While it's very true that we can adapt to sell other types of building products (and have done so successfully), if the market moved significantly to cement, for example, the opportunity for us pro dealers might be significantly less than currently exists." —Paul Hylbert, CEO, Pro-Build, Englewood, Colo.
- "Choosing materials should be a balance of both good environmental stewardship and economics. … Our industry has to take the lead in educating architects, builders, and homeowners on how to choose the best materials for their building projects." —Ron Fragapane, partner/sales rep, RepMark Sales Inc., Cleveland
- "Around here, you can't swing a dead cat without hitting a tree-hugger. I suspect that most of these little green men and women just like the bumper stickers. Tree-huggers don't want to change their lifestyle to save the planet; they want everyone else to change their lifestyle to save the planet. It's cool to be green right now. Kermit the Frog never had it so good. … But when it really comes down to it, where are you going to find a building product that is more environmentally friendly than those made from WOOD?" —Thom Gross, millwork specialist, Marvic Supply Co., Bucks County, Pa.
- "Re: ‘The Weight of Wood' editorial. I appreciate the history angle, but I think it is irrelevant for discussion of what's really green today. It's time to address the ignorance demonstrated by otherwise perceptive observers when it comes to what constitutes a green building product. What needs to be communicated is that, hands down, wood beats plastic, concrete, or steel as a green building product." —Dick Gauthier, vice president of marketing, Universal Forest Products Inc., Grand Rapids, Mich.
- "Truckee-Tahoe Lumber Co. has considered carrying an FSC-certified inventory, but concluded that the increased costs and lack of adequate supply would have too great an impact on our ability to fulfill our customers' needs on a consistent and affordable basis." —Breeze Cross. President, Truckee-Tahoe Lumber Co., Truckee, Calif.
- "The trend toward certified wood is laudable but often misguided. … To suggest that there is a significant environmental difference between a certified and noncertified piece of lumber produced in Canada or the western U.S. is just silly. …If someone develops a better alternative building product than wood, we will happily sell it. We are in the building materials business after all. We just don't want the choices to be driven by misinformation or by government bureaucrats using an emotional rather than scientific basis." —Rick Roberts, CEO, Sunnyvale Lumber Inc., Sunnyvale, Calif., and president, Lumber Association of California and Nevada
- "I have been selling building products for 28 years, and until recently had little understanding of green. While working for a national manufacturer of concrete roof tile, I met a builder that introduced me to a much higher understanding of green building. Conservation, reusable, sustainable, and hybrid are just a few of the green words he is using. This builder uses little to no wood in his structures, but builds to any style or specification. The efficiency of materials and energy usage for the homeowner is second to none. … I will continue to learn more about green each and every day. Hopefully, we all can learn enough not to be scared of what ‘thinking green' can mean to building homes in the future." —Brian Reid, territory manager, MI Windows and Doors, Weaverville, N.C.
What's your view? Send me your thoughts and join the discussion.
Diversity, Language Skills and Plain Hard Work: One Reader's Opinion
ProSales reader Walter Wilhelmi, warehouse and buying manager at Dealers Building Supply in Salisbury, Md., saw reason to comment on articles in our July issue on diversity in the workplace and on whether some yard safety issues stem from Hispanic workers' problems with English. On the first article, he wrote: "We are finding a fairly large number of the younger generation that will not work hard to have a better life. When they finish schooling, if they haven't been promoted to the top with an inflated pay scale, they are not happy. This goes with any nationality. I have always disagreed with changing your standards to satisfy someone that elects not to help themselves. For instance, a local college decided to diversify by allowing minority students to have easier testing and curbed grading. Where is the education earned equally in that scenario? I think Karnell Steel at OrePac explained it fairly well: all we need is people to work hard for what they want and to be compensated in return, whether that be financially or through recognition." As for the second story, he said: "Rich Binsacca's article on a solution for non-English-speaking employees is, in my opinion (and others in the industry), going in the wrong direction. Last I looked, we live in America, an English-speaking country." What's your opinion? Tell me.
Weighty, Indeed: You Respond to Our Editorial on How To View Wood
Several ProSales readers have commented on "The Weight of Wood," my editorial in the July issue of ProSales.
Peter Ganahl, president of Ganahl Lumber, Anaheim, Calif. (and featured in this month's cover story), noted my statement that, "We need to regard wood for what it is: one of the many construction supplies and services that we offer … and not just because it's what our daddy sold." Ganahl agreed, adding that wood and wood-derived products accounted for 80% of his company's sales a generation ago and now figure in 65% of sales.
"But here is my concern going forward," Ganahl continued. "If the policies coming out of the so-called green movement in construction are based on a combination of science and economics, we're ready to move to the best products and building methods that get us there. For example, do they reduce energy usage when in place? Are they energy efficient to produce relative to the alternatives? Are they long lasting? Are they renewable? If, on the other hand, the green movement uses the political arena rather than the scientific and economic arenas to move the process, our industry needs to be a strong and reasoned voice that guides the process toward the best policies over the long run."
Meanwhile, Bruce Currie, president of C.A. Niece Lumber Co., Lambertville, N.J., noted: "I have pondered the subject myself, being that some of our best moving items of the last five years are the likes of AZEK, TimberTech and Hardiplank. … We are in a very liberal town, 75% Democratic, many of whom are 'tree huggers.' Do you suppose they think plastic is better for the environment?"
What's your view? Write to me with your thoughts.
Got Trouble With Drug Users and Drunks? Count Your (Relative) Blessings
I've heard complaints lately from LBM executives regarding the legions of potential employees they've had to reject because of failed drug tests. A new study announced Monday indicates just how serious the problem is—and yet how LBM dealers are in better shape than some of their peers. The voluminous report from the federal government's Substance Abuse and Mental Health Services Administration (SAMHSA) estimates that 9% of the workers at building material and garden equipment and supplies dealers have used illicit drugs in the past month. At the same time, 6.8% are estimated to have used marijuana, and 13.2% engaged in heavy alcohol use. An occasional toke or one-night bender isn't the same as substance abuse, of course. In that darker realm, the report estimates that 2.7% of the workers at LBMs have engaged in illicit drug dependence or abuse in the previous year, while 10% were alcohol-dependent or abusers in the same period. The rates for illicit drug and heavy alcohol use range between 13% and 25.7% for carpenters, flooring installers, electricians, and roofers.
More Resources To Improve Your Yard's Safety Record
John Smith, risk manager at Foxworth-Galbraith Lumber Co., gave ProSales kudos for this month's story on LBM's special challenges overcoming the language barrier to assure the safety of Spanish-speaking workers. At the same time, Smith says we should have cited several other groups besides NAHB as sources of information and training material. His favorites include OSHA, the Wood Truss Council of America, and of course NLBMDA.
UFPI Doesn't See Remodeling Grow as Home Building Slumps
It's the LBM equivalent of the Sherlock Holmes case about the dog that didn't bark. In its announcement Tuesday of financial results for the quarter ended June 30, UFPI noted something important that was missing. "In previous housing downturns, our DIY business picked up as people chose to improve their homes instead of building new," UFPI president and CEO Michael Glenn said. "That hasn't been the case this time." In fact, retail and DIY sales are up only 1.7% this quarter compared with the second quarter of 2006. "We believe that homeowners who took significant equity out of their homes, or whose home values declined due to market conditions, are putting off the larger projects—like room additions and new decks—that would positively impact our business," Glenn said. That's particularly painful, given that UFPI doesn't expect the new-home market to recover until mid to late 2008.
 |
ProSales Wins Three ASBPE Awards
We're pleased to announce that ProSales magazine won three awards from the American Society of Business Publication Editors' Central-Southeast Region. All awards are for articles published in 2006. ProSales won a Gold Award for best regular staff-written column, honoring Chris Wood's "Viewpoint" column. It won a Silver Award for best original research in honor of "New Era," our report on the ProSales 100 (pictured). And it received a Bronze Award for best regular department, in this case the "House Calls" section written by our compatriots at Hanley Wood Market Intelligence. Naturally, we're quite proud that our peers have seen fit to honor ProSales, as they have 16 other times since 1999. But we're more proud of serving you, the reader.
 |
This Month in ProSales: Three Faces, Co-Op $$$, Translating Safety Concerns
There's a double trifecta in this month's issue of ProSales magazine. First, our "Three Faces of LBM" compares and contrasts the working days of executives at three vastly different sized LBM operations in three distinct parts of the country. And second, our trio of features offers not just the "Three Faces" story but also revealing reports on the vast changes under way in co-op advertising programs and the alarming rash of accidents that some pro dealers have encountered as predominately Spanish-speaking workers arrive on the yard. Note as well our chart in the ProWatch section, which reveals how far behind the national norm LBM is in employing African- and Asian-Americans.
 |
My Latest Favorite License Plate Slogan
I snapped this photo moments before taking a ride with Peter Ganahl, president of Ganahl Lumber in Anaheim, Calif., and one of the three execs profiled in this month's ProSales cover story. As the story will reveal, the three executives all may be responsible for their companies, but they operate in vastly different ways. In fact, I noticed just one thing they had in common: All three parked their cars at the very end of their lots, thus making certain their customers got the closer-in spots.
The Home Depot Remains Schizophrenic Over Serving Pros
Tuesday's presentation to analysts by The Home Depot didn't clarify the company's apparently contradictory attitude toward professional builders and remodelers. Early on, chairman and CEO Frank Blake reiterated that the fifth of HD's five priorities is to "own the pro." "We think this is an area where there's share for us to take," Blake said, noting that HD is doing so in part by dedicating sales staff just to this segment. But this talk came as the company revealed more details regarding the sale of the HD Supply unit that was most dedicated to serving the pro. That $10.325 billion deal is expected to close Aug. 16 and will help fund HD's stock buyback. "With the sale of HD Supply, we now have a laser focus on our retail business," CFO Carol Tome said. Blake also said HD Supply's sale reflects The Home Depot's refocus as a retail business. As things now stand, "own the pro" might become as humorous as those HD ads showing friendly, experienced consumers how to accomplish DIY tasks.
FBMA To Honor Florida Man's 70-year Career in LBM
John Riley will turn 90 on Wednesday, Aug. 22. No doubt it'll be just another workday for a man who has worked in LBM for 70 years. Two days later, on Aug. 24, the Florida Building Material Association will honor Riley at its annual Old Timer's Luncheon. Riley told WebbLog this week that the way he views it, he's been with the same LBM company in Largo, Fla., "but we have had eight different owners." Now it's part of Tulsa, Okla.-based Hope Lumber & Supply. He's done just about everything you can do in LBM, from running the company to running a steam locomotive. Now he just calls himself a salesman. If you'd like to join the group honoring Riley, go to www.fbmamainevent.com or call FBMA at 352-383-0366. And here's a related question: Do any of you know of anyone older or who has worked more years in LBM? If so, tell me.
Webb Blogs Worth Noting
If you haven't visited my new blog yet, here are some items that you missed:
- One price fits all? Wrong! Our Web columnist speaks
- Slowdown in household formation rate could affect future construction
- Arizona gets tough on companies hiring undocumented workers
- With crackdown on subprime, it's time to rethink hopes of business revival
Meek's Lumber Outlet Feels the Tahoe Fire's Heat
The Meek's Lumber & Hardware store in South Lake Tahoe, Calif., is seeing a 70% drop in business this week as a result of the fire ravaging nearby, Scott Kassahn, Meek's vice president for sales and marketing, told ProSales intern Anna Hernandez late Wednesday. Press reports said the blaze has charred 3,100 acres since it began Sunday. Residents of hundreds of homes in the area have been evacuated. "It's a very, very sad situation up there,” Kassahn said from Meek's Sacramento headquarters. South Lake Tahoe lies just east of the fire and hasn't suffered any damage. However, Kassahn said business has been greatly affected, in part because U.S. 50, the main road through the area, has been closed. A blog maintained by the Sacramento Bee describes the business area as "a ghost town.” The fact that the fire is occurring near the July 4 holiday is particularly hard on Meek's, because the summer months provide much of the South Lake Tahoe store's annual business.
Some Stories Behind 84 Lumber's Job Cuts
Given that they represent just 3.25% of headquarters staff and a paltry 0.3% of a 9,000-person workforce, we're inclined to not make too big a deal of 84 Lumber's decision to lay off 26 people at its corporate headquarters in Eighty-Four, Pa. But the news did give ProSales senior editor Andy Carlo an opportunity to check in with 84 spokesman Jeff Nobers about how business is going. In one sense, the answer is poorly; Nobers noted that the dealer's yard in Tavares, Fla., has seen sales fall from $68 million two years ago to roughly $38 million this year. "The big builders are sitting on their hands," he said. On the other hand, 84 Lumber is on track to open 20 new stores this year and continues to expand its installed sales program. And as for those laid-off workers, Nobers said some of the people cut were involved in marketing 84's golf outings, including its 84 Classic PGA event, which the company has abandoned.
What Is Green Building? Here’s a Webinar To Help You Decide
What makes a construction project green? Equally important, what is a green product? To help answer that question, ProSales’ sister publication Builder magazine is sponsoring a free Web seminar, “What Is Green Building?” featuring Mark LaLiberte, a recognized industry trainer, author and consultant with more than two decades of experience. Click here to learn more and to sign up for the free, 30-minute event or download a podcast.
This Yard Pet Goes Nuts for LBM Customers
 |
Webb Blogs Worth Noting
If you haven’t checked out my new blog, here are some items from the past week that you might have missed:
- Boone County Lumber and the Immigration Bill
- A USGBC Member Urges an End to Green Building’s Alphabet Soup
- How Many People Does It Take to Make a Window Installation Crew? Here's Some Advice
- Remodeling magazine: Dealers Are Waking Up to the Remodeling Market
Time Is Running Out! Enter the Excellence Awards Today!
Don't miss your opportunity to honor the great work of your company and staff via the ProSales Excellence Awards, recognizing dealers whose initiatives, projects, and facilities demonstrate innovation and business savvy. If you've recently launched a whiz-bang Web site or are directing hoards of traffic at your showroom, consider sharing your accomplishments with your peers. The rewards are plentiful: Winners receive a feature article in ProSales, recognition at a special breakfast during the 2008 International Builders' Show, and a $1,000 donation to the charity of their choice. This year's awards will recognize yards in six categories: Showroom Design, Overall Yard or Manufacturing Facility Design, Marketing/Customer Service, Best Advertising, Best Use of Technology, and Best Web Site. Click here for entry instructions or contact managing editor Katy Tomasulo at ktomasulo@hanleywood.com or 202.736.3303. Hurry! Completed entry binders are due soon!
WebbLog Adds a True Webb Blog
First monthly, then weekly, now virtually daily: ProSales proudly announces that we have added an online blog to our family of publications. Click here to see the latest entries (you also can find the link on the ProSalesOnline home page). I hope to add at least one valuable news nugget each business day and then summarize the best of them, along with other news, in this WebbLog section of the weekly ProSales Business Update.
What's Next for The Home Depot and HD Supply? We Handicap the Possibilities
ProSales' crystal ball is too chipped from past use for us to feel good forecasting what exactly will happen now that The Home Depot has announced it's selling its HD Supply unit. But we are willing to suggest the most likely of many possible outcomes:
- HD Supply's buyers conclude that the LBM operations get little if any synergy from the rest of HD Supply (except, perhaps, for White Cap Construction Supply), so it tries to spin off or sell that section. A spun-off LBM division would be a Florida-Georgia powerhouse but nothing to fear nationally. An LBM division put up for sale would be too big a company for any other LBM operation but a giant—Pro-Build Holdings, maybe?—to swallow, unless the LBM operation doing the buying found an investor or was willing to leverage itself to the stars.
- HD Supply's buyers decide the company is worth the investment. If so, look for it to move quickly, as private equity firms generally only wait about five years before looking to turn their investment public or sell it to someone else.
- The Home Depot continues to make "Own the Pro" one of its five operating objectives. HD executives have said several times that 3% of the customers at its retail stores account for 30% of all goods purchased. The company has just begun investing in people to manage those accounts in hopes of increasing HD’s share of those customers' total LBM purchases. Given the value of those customers today—roughly $24 billion—it stands to reason that HD will want to keep pursuing them.
One clear lesson from all this: Wall Street lacks the patience to invest in the residential construction industry. The Street wants consistent, reliable, constantly rising earnings from "pure play" companies that specialize in just one thing. Lots of companies have bent over backward (and beyond; see Fannie Mae and Freddie Mac) to deliver consistent results, and only a few conglomerates (most notably GE and, for a while, Tyco) could explore multiple business lines. It may be getting more stable, but residential construction and the building supply industry that serves it remain too fickle, too diverse, and too long-term for the likes of most itchy-fingered investment managers.
Conch'd Out: Dazed Florida Dealers See Property Tax Relief in Sight
Senior editor Andy Carlo traveled through South Florida last week, stopping in Miami and at various points along the Florida Keys. He reports that dealers at the Florida Building Material Association summer conference in Key Largo singled out high property taxes as one of their top challenges. Florida homeowners are living in two different worlds with regard to property taxes, Carlo reports. The state's homestead exemption plan limits existing owners' property tax increases to around 3% a year. But if you choose to buy a new home down the street, you’d face mammoth increases. On June 14, the Florida Senate passed a bill that exempts the first $25,000 of tangible personal property tax a homeowner might pay and creates a "super homestead" exemption for all Florida homeowners that would cut most owners' tax bills by 44%. Voters will be asked to ratify the change on Jan. 29.
Your Opinions Vary Widely on the Value of Gate Guards
An impressive number of you commented on my June 14 WebbLog item asking whether gate guards are a good idea. You'll recall the question was inspired by a recent visit to Ashby Lumber in Concord, Calif., which—unlike lots of other yards—doesn't have a gate. Mark Mei, operations manager at Hayward Lumber, Monterey, Calif. says gate guards are a positive for customers when—as happens close to 40% of the time—it turns out the buyer didn't take away all that he actually bought. But Dana Heal, a veteran manager of yards in the Midwest, says a guarded gate "sends the wrong message to the contractor picking up supplies." Meanwhile, Andrew Senn, operations support supervisor for Stock Building Supply in Green Bay, Wis., notes that his yard crews do all the loading for customers (as Ashby does) but still retains a gate guard "because it ensures that the customer is getting the right amount of product and exactly what they came for." I have posted all the letters in full on my blog.
A Creative Way To Pave Your Yard
Got a muddy yard and no money to pave it? Rick Roberts of Sunnyvale (Calif.) Lumber, president of the Lumber Association of California and Nevada (LACN), found a creative way to overcome that problem. In his President's Message in the June LACN newsletter, Roberts says he couldn't figure out how to afford to pave his company's 6-acre yard in Fremont, until he noticed some trucks from a nearby concrete company passing out front. He visited that company and learned that extra concrete brought back to the yard can't be reused—it typically had to be hauled to a dump, where the concrete company paid a fee to get rid of the load. Roberts suggested that, instead of going to the dump, the company pour its unused concrete in his lumberyard. "That was five years ago," Roberts wrote. "Today we are about 400 square feet from being completely paved. We used 2x6 for our forms so the minimum thickness is 5 1/2 inches. It looks a little like a patchwork quilt, but it's beautiful compared to mud."
Update on Miami's Anti-Gouging Initiative
Last week’s ProSales Business Update reported that the Miami-Dade County Consumer Protection Division’s survey of prices of products and services likely to be in demand during hurricane season revealed enormous disparities in what stores were charging. The survey was based on price checks at Wal-Mart, The Home Depot, Lowe's, and seven independent LBM operations in the county. Since then, John Ruark, general manager of Shell Lumber in Miami, wrote in to note that his was one of the stores where the survey took place. "During their visit to our store, the inspector did not seek any assistance or clarification on quality, grade, or features of the products listed," Ruark wrote. "This wide disparity in pricing may be attributed in part to comparing apples to oranges. The report is a good tool to assist consumers; however, a little more information and detail could have gone a long way in helping people understand what they actually get for these prices."
They Sure Grow Yard Pets Big in Texas
 |
Click here to view full image
Time Is Running Out! Enter the Excellence Awards Today!
Don't miss your opportunity to honor the great work of your company and staff via the ProSales Excellence Awards, recognizing dealers whose initiatives, projects, and facilities demonstrate innovation and business savvy. If you've recently launched a whiz-bang Web site or are directing hoards of traffic at your showroom, consider sharing your accomplishments with your peers. The rewards are plentiful: Winners receive a feature article in ProSales, recognition at a special breakfast during the 2008 International Builders' Show, and a $1,000 donation to the charity of their choice. This year's awards will recognize yards in six categories: Showroom Design, Overall Yard or Manufacturing Facility Design, Marketing/Customer Service, Best Advertising, Best Use of Technology, and Best Web Site. Click here for entry instructions or contact managing editor Katy Tomasulo at ktomasulo@hanleywood.com or 202.736.3303. Hurry! Completed entry binders are due soon!
Meet ProSales' New Product Editor
Victoria Markovitz has joined the ProSales staff as our new product editor. Vicky may officially be new to the magazine, but she’s an old hand in the office, having served as an intern on our sister publication Building Products while earning her journalism degree from the University of Maryland. Write to her at vmarkovitz@hanleywood.com.
The June Issue Is Served; Distributors, Inventory, and Moving Are on the Menu
The changing role of two-step distributors gets cover-story treatment in the June issue of ProSales, now available online. In that lead story, we report how two-steppers are recasting themselves to reinforce their role as indispensable connections between buyers and sellers. The June issue also examines strategies for improving inventory management and gives tips for relocating your LBM operation.
California Roll: Environmental Concerns Soon Could Affect Left-Coast Dealers
While most dealers I met during my California trip still report scant sales of green products, it’s clear from recent initiatives by state and local government officials that the state’s LBM dealers will at least have to become more environmentally aware. In Berkeley, for instance, Truitt & White Lumber Co. is awaiting City Hall’s release of an action plan prompted by last November’s passage of an initiative calling for the city to cut its greenhouse gas emissions by 80% by 2050. Among the city’s ideas that Truitt & White eventually might have to implement are proposals to increase the use of biodiesel fuels and hybrid electric vehicles, require greener buildings, provide free or subsidized transit passes to all Berkeley residents, and use less electricity to pump and treat water. Meanwhile, over in Sacramento, attorney general Jerry Brown has petitioned to block San Bernardino County’s long-range land-use plan on grounds the plan doesn’t take into account its effect on global warming.
Today's Question: Is a Gate Guard Worthwhile?
My recent visit to yards in California's East Bay region included a stop at Ashby Lumber in Concord. The bulk of Ashby's pro customers are small to medium-sized contractors, so it follows that 30% of the goods that Ashby sells to pros leave in the beds of contractors' pickup trucks via “will-call” sales. Talk about that robust will-call business led me to notice something missing from Ashby that I've seen at most other yards I've visited—a guard post at the exit. Dan Easley, general manager of the Concord facility, says Ashby believes the presence of a gate “sets a taste [with customers] that we think is a bit negative.” So instead, Ashby loads every customer’s truck. Easley says this might cost more than permitting self-service, but Ashby believes it promotes good feelings among customers as well as helps control shrinkage. Is Easley on to something, or is his yard an exception to the rule? Tell me your views.
Miami Anti-Gouging Initiative Reveals Wide Disparity in Product Prices
In South Florida, hurricane season also is the season when people file complaints about businesses that inflate prices for storm-related items like plywood. As a result, the Miami-Dade County Consumer Protection Division recently compiled a survey of prices of essential products and services so that people can get a sense of whether they’re being gouged, the Miami Herald reports. But the actual report—based on price checks at Wal-Mart, The Home Depot, Lowe’s, and seven independent LBM operations in the county—revealed more variation than consistency in prices. For instance, a ¾-inch sheet of plywood sold for anywhere between $8.99 and $35.97, while the retail price for 30 feet of roofing felt ranged from $10.97 to $56.00. The report didn’t list the prices on a store-by-store basis.
Latest “Rader’s Edge” Tackles Pricing Accuracy
Our exclusive Web columnist, Chris Rader, examines the profit implications of pricing errors in his latest "Rader's Edge" column, now online at ProSalesOnline.com. Check it out.
What’s It Take To Deliver Top-Value Customer Service? Ask This Limo Exec
I have heard lots of LBM executives say they care about customer service, but few have shown anywhere near the fervor displayed by Dawson Rutter, president and founder of Commonwealth Worldwide Chauffeured Transportation, in an article in this month’s Inc. magazine. The story reveals the obsessive detail Rutter’s company invests in dealing with customers. For instance: drivers don’t just show up early; they also bring the client’s favorite coffee drink or cold beverage, preset the radio to the client’s favorite station, and stock a first-aid kit in the chauffeur’s standard-issue briefcase. “Other companies are metal-centric—mostly about the cars,” Rutter is quoted as saying. “We are flesh-centric. We are about people.” It’s an eye-opening article.
FSC Sets Meetings To Consider Revising Regional Standards
The Forest Stewardship Council (FSC) will hold five meetings across the country to discuss revising regional standards and talk about emerging issues. The daylong sessions will take place June 26 in Concord, N.H.; June 29 in Minneapolis; July 12 in Atlanta; July 24 in Sacramento, Calif.; and July 27 in Portland, Ore. Click here for meeting and registration details or call the FSC’s Katie Miller at 202.342.0414.
June 7, 2007
In LBM Veritas: ProSales Makes a Special Wine Country Tour
You know you're an LBM person—or a fellow who covers LBM—when you can travel to Northern California wine nirvanas like Healdsburg and St. Helena and ignore the tasting rooms so you can visit lumberyards. That's the case for yours truly when I stopped last Friday at Healdsburg Lumber in Sonoma County and at Central Valley Builders Supply in Napa County's St. Helena. Healdsburg Lumber is the kind of relaxed place where the bulletin board out front lists community events, the inside sales staff wears Hawaiian shirts, and you can buy a single drywall screw if that's all you need. It also has a month-old program, the brainchild of staffer Jackie Danielson, in which employees are invited to nominate fellow workers for a "Pat-on-the-Back Award" for meritorious service. Winners get prizes ranging from a package of candy to tickets to a Major League Baseball game. Meanwhile, at Central Valley Builders Supply (CVBS) the wine trade is so important that president Steve Patterson's senior team includes a title I haven't seen before: a vineyard manager responsible for supplying the wineries with irrigation equipment, fencing, and fermenting bins. But while grape might be Napa Valley's favorite color, at the CVBS yard it's orange. Patterson has made safety such a priority that his yard crews wear screamingly orange T-shirts with the company logo on the front and "SAFETY ALWAYS" in big letters across the back. The safety culture is so strong now that one manager chided Patterson when he and I started strolling through the yard without donning orange mesh safety vests.
HD Supply Continues to Expand LBM Operations
As The Home Depot weighs what to do with its $12 billion HD Supply pro business, the HD Supply Lumber and Building Materials division does not appear to be slowing down, or waiting for an answer. ProSales has learned that HD Supply LBM will open a new location in Charleston, S.C., this summer. With up to 50 employees, the full-line lumberyard will offer doors, windows, trim, trusses, siding, engineered wood products, and installed services. Steve LeClair, president of HD Supply Lumber and Building Materials, told ProSales “it’s business as usual” for the division, despite that The Home Depot is trying to determine whether it will spin off, consolidate, or sell its HD Supply business. "The opening of the Charleston facility demonstrates that HD Supply LBM is following a trajectory for efficient growth," LeClair said. The division already operates 45 lumberyards among the more than 1,000 locations that make up HD Supply.
Market Didn’t Force Dunn Sale
Pro-Build Holdings announced Monday it will purchase seven-unit Dunn Lumber, based in Daytona Beach, Fla., a deal that was not forced by the market's downturn, according to outgoing Dunn Lumber president and former owner Sam Dunn, who told ProSales the move has been in the works for more than a year. "We are not bailing out. We made a special effort to build our business over the past 15 years as a company that could stand on its own and grow," he said. After discussing options in a "well-thought-out process" with his cousin Barry Dunn, it was determined that a sale to Pro-Build was in the best interest of the shareholders and of employees of the company who held a 14% interest share and cashed in their stake prior to the sale. Terms of the deal were not disclosed. The 103-year-old business will continue to operate under its own banners. In the meantime, Sam Dunn is remaining on board as a consultant while Dunn executives Gary Farber and Ron Cannon will continue with the company, overseeing the transition. Englewood, Colo.-based Pro-Build, a subsidiary of Boston-based Fidelity Capital, operates more than 500 locations nationwide and has sales of $6 billion.
Tech Savvy? Show Us!
If your salespeople feel lost without their tablet PCs or your A/R department hasn't seen a paper invoice in years, you could be the perfect candidate for two new technology categories in this year's ProSales Excellence Awards: Best Use of Technology and Best Web Site. Winners of our sixth annual contest will be showcased in a feature article, will be honored at a special breakfast during the International Builders' Show, and will receive a $1,000 donation to the charity of their choice. This year's awards also will recognize yards in four other categories: Showroom Design, Overall Yard or Manufacturing Facility Design, Marketing/Customer Service, and Best Advertising. Click here for entry instructions or contact managing editor Katy Tomasulo at ktomasulo@hanleywood.com or 202.736.3303.
Hue and Cry: Green Predominates at PCBC Amid Fears Over Wood’s Future
It’s hard to walk past more than a couple booths anywhere at this week’s Pacific Coast Builders Conference in San Francisco without coming across a sign promoting a vendor’s green attributes. It’s a far stronger, more pervasive marketing message than one we saw just a few months ago at the International Builders’ Show, and it indicates that manufacturers have decided being green matters to their future, even if actual demand for green goods remains minuscule. But it doesn’t take much reportorial digging to reveal profound disagreements between these companies over what’s the right way to act green. Case in point: the Roy O. Martin Lumber Co., Alexandria, La., made its certification by the Forest Stewardship Council a key part of its marketing message by putting the FSC trademark on its shirts and handing out water bottles that said “Got FSC? We do”, while business cards handed out by employees of Boise, Idaho-based iLevel by Weyerhaeuser feature the Sustainable Forestry Initiative logo. On a related front, the California Forest Products Commission is raising alarms over what it views as a false green image touted by non-solid-wood products like composite decking as well as over legislative initiatives that it views as anti-wood. The California Redwood Association is so worried about wood’s future in a green age that it brought in a retired professor from Minnesota to argue that building with wood is better for the environment than using concrete, steel, or plastic composites.
Stock Clarifies, and We Correct, Reports on the Management Change
Stock Building Supply issued a news release yesterday following up on last week’s announcement from Stock’s parent, Wolseley, that Fenton Hord will retire as Stock’s president on July 31 and be succeeded by current SVP of operations Joe Appelmann. Unlike the report from Wolseley headquarters in England, the announcement from Stock’s headquarters in Raleigh, N.C., said the 60-year-old Hord is retiring due to health reasons. Stock has struggled during this recent housing slump, and Hord alluded to that when he said in his announcement: “We operate in a cyclical industry and have seen a lot of changes, but Stock and its associates have proved themselves as the class act of our sector.” This editor regrettably was much less of a class act last week when, at various points in the WebbLog, he misspelled both Hord’s and Appelmann’s names—his first such double error in 30 years of journalism. ProSales regrets the error and will use it in the future as a reminder that quality service demands an unrelenting focus on getting the basic details right.
Don’t Expect BMHC to Budge Despite Shareholder’s Push To Divest
Building Materials Holding Corp. (BMHC) may have received its first major taste of shareholder ire, including a call for the company to explore the possibility of selling some of its assets, but don’t expect the San Francisco-based dealer to be hasty and divest any of its divisions, ProSales senior editor Andy Carlo reports. James Wilson, director of research and a senior analyst with JMP Securities, told ProSales that selling anything at this point does not make sense given the industry’s move through a cyclical downturn. BMHC would be likely to receive a lesser value if it were to sell a division, including its SelectBuild construction services company. “They have made good acquisitions and have grown a good company,” Wilson says. “I like what they are doing and other players in the industry are making the same moves.” Namely, BMHC’s rivals are pushing more and more into construction services, despite a down market. While Robert Chapman (the managing member of Chapman Capital, which owns 7.4% of the BMHC shares and issued a scrutinizing letter to BMHC on May 25) might not hold enough of the company to force a move, his equity firm does hold more shares than the company’s management team and board of directors, including chairman and CEO Robert Mellor.
Power Your People
We often hear that LBM supply is “all about the people.” If this is true at your yard, consider rewarding your staff’s hard work with recognition via the ProSales Excellence Awards. Winners of our annual contest will be showcased in a feature article and will be honored at a special breakfast during the International Builders’ Show. Winners also receive a $1,000 donation to the charity of their choice. This year’s awards will recognize yards in six categories: Showroom Design, Overall Yard or Manufacturing Facility Design, Marketing/Customer Service, Best Advertising, Best Use of Technology, and Best Web Site. Check out the feats of last year’s honorees here.
Click here for entry instructions or contact managing editor Katy Tomasulo via ktomasulo@hanleywood.com or 202.736.3303.
Hard Times Mark Hord’s Departure from Stock
Farmers will tell you that you can’t fight Mother Nature. Fenton Hord might say the same about market forces. Hord, CEO of the nation’s No. 2 pro dealer, Stock Building Supply, will retire on July 31, Stock’s British parent, Wolseley, announced Tuesday. Hord will be replaced by Joe Appelman, an 18-year veteran of Raleigh, N.C.-based Stock. Wolseley noted that during Hord’s 20-year tenure with Stock, sales grew from $113 million in 1987 to $5.3 billion in 2006. It didn’t note the hard times Stock has gone through lately. Over the past eight months, the dealer cut as many as 4,500 jobs—more than 25% of its workforce—and set plans to close 22 of its 320 locations. Revenue from Stock’s continuing operations fell 20.4% in the first half of Stock’s fiscal year, ended Jan. 31, from the year-earlier period. You can blame those woes in large part on the slump in new-home construction, which has accounted for 80% of Stock’s business, and in part on the plunge in lumber prices. On top of that, Stock’s numbers are looking even more anemic than usual because dollar’s value against the British pound has dropped close to 8% since last July, and it’s in pounds that parent Wolseley ultimately counts its money.
April Home Sales Suggest Brightening Skies, But at Toll Bros. It’s Still Gloomy
Given the recent bad times, today’s report on new home sales in April was comparatively cheery. The Census Bureau said the seasonally adjusted annual sales rate of 981,000 was 16.2% above March’s revised rate. And while it was still 10.6% below the April 2006 sales rate, that’s not as big a gap as we’ve seen lately. With the increased sales, we now have a 6.5-month supply of homes outstanding, down sharply from 8.1 months in March. Don’t break out the champagne yet, however; Toll Brothers (No. 14 on the Builder 100) announced today its net income for the quarter ended April 30 sank 79% to $36.7 million on an 18.8% drop in revenue, to $1.17 billion.
Hurricane Season Arrives: One in Eight Americans Threatened
Two rather sober news releases regarding hurricanes blew over the transom this week. The first was a forecast by the National Oceanographic and Atmospheric Administration that hurricane season will be more active than usual this year. The second was a set of factoids from the Census Bureau related to hurricane season. Among those Census Bureau numbers: 12% of the nation’s population now live in the coastal areas between North Carolina and Texas that are most threatened by Atlantic hurricanes.
California Lumbermen Protest State Plan for Off-Road Diesel Equipment
The Lumber Association of California and Nevada (LACN) went on record Monday opposing proposed off-road diesel regulations that it said would hurt the lumber, building materials, and wood products industries. According to LACN, the proposed regulations from the California Air Resources Board would require the retrofit, re-powering, or replacement of more than 160,000 pieces of equipment—including forklifts and other loading equipment—statewide over the next 12 years. “To require replacement or retrofitting of this equipment in a relatively short timeframe is unreasonable, especially considering that some equipment of this type has a life span of more than 20 years,” wrote Ken Dunham, LACN’s executive director. “Additionally, the addition of regulation of NOx [nitrogen oxide] emissions to the proposed regulations requires equipment technology that is not general utilized today.”
This Road Dog Knows No Borders
If you see Mike Hurlburt on the road, chances are you’ll also see Roscoe, pictured here, a rottweiler-German shepherd who rides with Hurlburt as he logs a couple hundred miles a day picking up and delivering materials for Nielson’s Building Center in Point Roberts, Wash. Because of Nielson’s unique location—Point Roberts sits on a peninsula attached to the Canadian province of British Columbia but is officially part of the U.S.—Hurlburt and Roscoe make border crossings a couple times a day (with documentation for both) to reach suppliers in Canada and to go into “mainland” United States for pickups. Getting 28 miles away to Blaine, Wash., which is where managing editor Katy Tomasulo caught up with them yesterday, and to other points south, requires four passes through border crossings round trip. Hurlburt says he doesn’t mind the miles—a radio and a dog are all he needs. And not only is Roscoe a good companion, “He doesn’t complain when I sing.”
Show Off Your Showrooms
We’ve received some announcements lately regarding new showrooms opening up around the country. No doubt you’re proud of them, so here’s a chance to show what you’ve done—by entering the ProSales Excellence Awards. This year’s awards recognize yards that excel in the categories of Showroom Design, Overall Yard or Manufacturing Facility Design, Marketing/Customer Service, Best Advertising, Best Use of Technology, and Best Web Site. Winners receive a feature article in ProSales, recognition during a special breakfast ceremony at the 2008 International Builders’ Show, and a $1,000 donation to the local or national charity of their choice. Click here for entry instructions or contact managing editor Katy Tomasulo via ktomasulo@hanleywood.com or 202.736.3303.
Andy Carlo Joins ProSales as Senior Editor
It’s a special pleasure to introduce you to ProSales’ new senior editor: Andy Carlo. Many of you know him already because he has worked since 2001 for Home Channel News, covering pro dealers, distributors, and manufacturers. Before that, Andy served for two years as managing editor of two weekly newspapers in upstate New York and worked four years as a custom builder and carpenter in the same region. He’ll be working from his home office in Poughkeepsie, N.Y. Feel free to write to him and welcome him aboard. Better yet, give him a story idea.
Home Depot Trumpets Two New Ways It’s Pursuing the Pro …
The Home Depot’s financial report and Webcast for the first quarter of 2007 cited success in two relatively low-profile programs it has launched to win builders’ business. HD said it tripled the volume of business (but didn’t give numbers) in its “pro bid room.” That’s sort of a misnomer, because the bid room actually is a direct-ship program that lets pro customers have large orders delivered directly from the vendor to the jobsite. HD also said that the account managers it has assigned to many of its “super premium” accounts—the 2% of HD customers who account for 30% of all sales—are getting their customers to spend 50% more at HD than are super premium customers who don’t have account managers.
… But Its Sales Remain Weak, and No HD Supply Buyer Is in Sight
While The Home Depot’s news release noted that acquired businesses helped HD Supply’s total sales grow 46% quarter over quarter, it wasn’t until the Webcast that you could learn that sales from continuing HD Supply operations were down 6.5% in that period. Retail sales declined 4.3%, and it was only the $1 billion in new sales from HD Supply acquisitions that made it possible for the company to report that total sales were up 0.6% in the quarter. Meanwhile, the $12 billion question of what to do with HD Supply remains unanswered. Home Depot CEO Frank Blake said the company has received “strong interest” in HD Supply’s assets from possible buyers. Still, more than 90 days after it began analyzing strategic alternatives for the business, no conclusions have been reached and none may be reached for several more months.
At Capitol Hill Hearing, NLBMDA’s Chair Decries ‘Predatory Lawsuits’
The Innocent Sellers Fairness Act (ISFA) got its first serious look by a congressional panel today when the chairman of the National Lumber and Building Material Dealers Association (NLBMDA) testified at a House Small Business Committee hearing on the legislation. NLBMDA’s Steve Kelly said unfounded and unfair “predatory lawsuits” are hurting pro dealers. “Our current legal system holds each party in the product supply chain liable for any defects or harm caused by the product without any finding of fault,” Kelly said in prepared remarks. “While I agree that the consumer should be protected from harm or inconvenience caused by defective products, I do not believe the legal system assigns liability in a fair and consistent way. … [I]nnocent sellers are forced to spend time and money defending themselves for actions outside of their control.” ISFA (H.R. 989) would protect dealers by removing liability if they merely supplied the product. Rep. Steve Chabot of Ohio, the ranking Republican on the Small Business Committee, is a co-sponsor.
The Long-Term—and Depressing—News About 2007 Housing Starts
The government constantly reminds us in its new residential construction report that you need to take the long view with these numbers and not focus on the seasonally adjusted ones. So I ignored the headlines and focused on the page showing actual starts of single-family homes for the first four months of this year—373,600 homes. That’s not only 27.9% less than the total for starts in January through April 2006, it’s the worst such number in a decade. The last time it was lower was in 1997, when there were 347,300 starts in the opening four months.
|
One notable factoid tucked into the back of our ProSales 100 report in this month’s issue is this: The share of PS100 dealers that planned to spend more than 1% of overall sales on information technology (IT) and e-commerce shot from 3% in 2006 to 11% in 2007. “We’re all getting a taste for it, and we want more,” we quote Tom Rainwater, secretary and treasurer for E.C. Barton & Co., Jonesboro, Ark., as saying. The PS100 numbers jibe with what I’m finding in my travels around the country—namely, that while IT may still be a relatively new arrival at lumberyards, it’s being embraced much more heartily than ever before.
Calling All Forward Thinkers
Speaking of technology, if your yard is on the leading edge when it comes to IT, don’t miss the opportunity to earn recognition via the ProSales Excellence Awards. This year’s awards include two new categories in the IT arena: Best Use of Technology and Best Web Site. We also will recognize yards that excel in the categories of Showroom Design, Overall Yard or Manufacturing Facility Design, Marketing/Customer Service, and Best Advertising. Winners receive a feature article in ProSales, recognition during a special breakfast ceremony at the 2008 International Builders’ Show, and a $1,000 donation to the local or national charity of their choice. Click here for entry instructions or contact managing editor Katy Tomasulo at ktomasulo@hanleywood.com or 202.736.3303.
|
Now Online: A 2007 ProSales 100 Report That Shows Big Changes
Our just-published ranking of the top 100 residential construction suppliers looks much different than last year’s list. Pro-Build tops the chart, followed by Stock Building Supply, The Home Depot’s HD Supply division, 84 Lumber Co., and BMHC. Roughly one-seventh of the list’s members are new, the result of both consolidation within the industry and a desire by some past survey participants to stay mum this time regarding their performance. Just 16 dealers on the 2007 list grew 10% or more compared with 55 on the 2006 list. At the other end of the top 100, you might recall my speculation as to whether company No. 100 would be bigger or smaller than 2006’s, which had pro sales of $69.3 million. The answer is: Much smaller. This year’s No. 100 is Arlington (Mass.) Coal & Lumber Co., with pro sales of $51.4 million.
How Dominant Are the Top 10 LBM Dealers? Not as Much as Builders
The report accompanying the 2007 ProSales 100 list quotes Pro-Build CEO Paul Hylbert’s estimate of his company’s target market at $180 billion. Other experts have much different numbers, but let’s accept his. What share, then, of the LBM market is held by the top 10 ProSales 100 dealers? In 2006, their sales to pros totaled $31.64 billion, giving the top 10 a 17.6% share. In contrast, this month’s Builder magazine, a sister publication of ProSales, reports that the 10 biggest home builders in 2006 accounted for 25.7% of all new homes constructed last year.
NLBMDA Chair To Testify on Capitol Hill
Any member of Congress can file a bill, and thousands of ideas get introduced each year. But a relatively tiny number of proposals actually get discussed at a hearing. The National Lumber and Building Material Dealers Association (NLBMDA) reports that its lead cause, H.R. 989, the Innocent Sellers Fairness Act, will join that select group on May 17 when the House Small Business Committee holds a hearing on small business liability concerns. NLBMDA chair Steve Kelly has been invited to testify. H.R. 989 now has 41 co-sponsors. Significantly, one of those 41—Rep. Steve Chabot (R-Ohio) —is the ranking Republican on the Small Business Committee.
ProSales Readers Respond: Yes, We Do Fuel Surcharges
We received several letters responding to last week’s query regarding whether you impose fuel surcharges. Chuck Bankston, president of Bankston Lumber, Barnesville, Ga., said his company started imposing a $5 fuel surcharge about three years ago and now the surcharge totals $9 per delivery. “We only had a couple of complaints when we first started,” he wrote. “I think it has helped our customers plan ahead by combining orders.” In Rapid City, S.D., Wallace D. Bork, general manager of Knecht Home Center, said his company’s fuel surcharge ranges from $3 to $9 per delivery based on the mileage involved. “Customers fully understand and we have received very few negative comments,” Bork said. And John Johnson, VP of corporate purchasing for Erie Materials, Syracuse, N.Y., said his company put in a $10-per-delivery surcharge several months ago. To help you track how prices are changing, one decent guide is AAA’s Daily Fuel Gauge Report. Note that while it also reveals a big jump in prices for regular gasoline in recent months, the price of diesel fuel has remained fairly constant.
Introducing a ProSales Web Exclusive: "Rader’s Edge"
ProSales Online has a new, Web-only feature containing ideas and tips to help your LBM operation increase its profit margin. It’s called "Rader’s Edge" in honor of its author, Chris Rader. He’s a Lafayette, La.-based construction supply consultant who specializes in management and technology issues. Check out his first article, entitled “How To Add Two Points to the Bottom Line Without Tipping Off Your Customers.” Then tell me what you think.
Deadline Nearing for You To Submit Nominations for ProSales’ Public Service Leaders Award
Do you know a dealer who’s doing great work for his or her community and profession? Several folks already have replied to my request for nominations for the 2007 ProSales Public Service Leaders Award, but there’s still a little time left for you to offer your own names. Tell me about dealers who tirelessly commit themselves to the support and advancement of the communities where they live as well as to the LBM industry as a whole. Winners will be featured in ProSales’ August cover story.
Market Your Marketing
With all of the discussion lately about a down market being a great time to boost marketing programs and reinvigorate sales strategies, we expect that there are some clever marketing campaigns under way now. Is that the case with you? Then consider getting some extra fame by entering our ProSales Excellence Awards in the “Marketing/Customer Service” and “Best Advertising” categories. Winners receive recognition in the November issue of ProSales and at the 2008 International Builders’ Show, plus receive a $1,000 donation to the charity of their choice. We’re also accepting entries in the categories of Showroom Design, Facility Design, Technology, and Web Site. Don’t miss this opportunity to showcase the great work of your staff and your company. Click here for the official entry form or contact managing editor Katy Tomasulo for more information.
May 3, 2007
This Week’s Maine Event: News From Way, Way North
Drive just about as far east and as far north as you can in the U.S. and you’ll find where I am today: Caribou, Maine, home of the S.W. Collins Co. This LBM dealer might be 163 years old and on its fifth generation of Collins as owners, but it’s certainly not standing still. Just this week, company president Sam Collins announced the purchase of the Almon H. Fogg Co. of nearby Houlton, Maine. Compared with Collins, Fogg is a newbie—it was founded in 1859. The addition of the Houlton store will give Collins its third retail lumberyard (the other is in Presque Isle) plus a custom millwork shop and a kitchen and bath center.
Gas Prices Are Rising. Do You Impose Fuel Surcharges?
The 80-cent rise in gasoline prices nationwide between Christmas and last week, (see Energy Department stats) could renew interest among dealers in imposing fuel surcharges. In Portsmouth, N.H., Ricci Lumber has been doing this for several years. Ricci CEO Edward Hayes and general manager Pat Moretti told me on Monday that the surcharge usually amounts to several dollars per shipment and rises or falls with the price of gas. But in Augusta, Maine, LaPointe Lumber Co.’s Dick Tarr said he used to impose a $2 delivery charge but dropped it because of customer complaints, and he doesn’t intend to revive the surcharge now. “It’s a cost of doing business,” said Tarr, LaPointe’s VP and general manager. “I don’t put on a health care surcharge.” Do you have surcharges now? Will you soon? Tell me.
North Carolina City Climbs Onto the Green Bandwagon
Even as regional LBM associations lobby their state legislatures to ensure that green building requirements for public projects aren’t tied solely to the U.S. Green Building Council’s (USGBC) LEED standards, more local governments are embracing LEED. One of the most recent examples is in Asheville, N.C., where a local press report said the city council voted to require that all new city buildings meet energy-efficiency standards set by the USGBC. LEED recognizes only FSC certification.
 |
This LBM Pet Lies Practically Non-Stop
Jon Whorley, sales manager of Cedar Valley Mfg. in Hollister, Calif., introduced us to this week’s yard pet. D.J.—short for David Jr.—was named after the worker who rescued the stab-wounded cat off the street. “He is a lap cat, or, more appropriately, a paperwork pile cat,” Whorley writes. “He loves to climb up on your desk, walk across your keyboard, and lie right on top of whatever paperwork you have on your desk. Then he will meow until you scratch his head. He sleeps 20 hours a day, wakes up at break time to go out into the plant and beg for food from the workers, then go back to the office to sleep on somebody’s paperwork pile. We put him out every Friday night and he comes back every Monday morning at 5:30 a.m.” D.J. is photographed above at Christmastime, where he saw some decorations being put up and naturally had to lie on the tinsel. Want some national fame for your yard pet? Write to me with an electronic photo of the pet along with its name and habits.
 |
Move Over IBM—There’s a New “Big Blue”
The rush of events in April almost caused us to forget one of the most distinctive new names for an LBM company to come along in quite a while: the Blue Ox Lumber Co. Blue Ox—named for Babe, Paul Bunyan’s sidekick—is the new name for the Harry T. Williams Lumber Co. of Los Angeles. The change comes in the wake of Harry T. Williams’ acquisition by Matt Ogden and an investor group in May 2005. Blue Ox also announced that Lonnie Schield, former president of Terry Lumber, will be chairman of the board of the company, which will be based in Torrance.
April 26, 2007
Second-Half Market Turnaround Increasingly Likely To Be Delayed
Forecasts earlier this year that the housing market will turn around in the second half of this year are looking increasingly suspect. At the very least, the latest hard numbers and informed prognostications don’t call for any revival by the Fourth of July. The biggest dealers continue to suffer the most, and suffer most publicly; Builders FirstSource reported late Wednesday that its sales slumped 30.2% in the first quarter from the year-earlier period. “The company expects the difficult market conditions to negatively affect its operating results at least through the end of 2007 and possibly into 2008,” BFS said in a statement. Also yesterday, Louisiana-Pacific Corp. CEO Rick Frost said flatly: “I do not see this market improving substantially for the rest of 2007.” LP’s first-quarter earnings swung from a net profit of $84 million in the first quarter of 2006 to a loss of $37 million in the opening three months of this year. According to the Census Bureau, the annual rate in March for new single-family homes was 23.5% below the same rate for March 2006. There is now a seven-month backlog of homes on the market.
ISFA Co-Sponsor Count Grows to 30; Florence Corp.’s Perenza Honored
National Lumber and Building Material Dealers Association (NLBMDA) members have now recruited 30 co-sponsors to their key legislative initiative: H.R. 989, the Innocent Sellers Fairness Act (ISFA). That’s up from 24 House members last Wednesday, April 17, when NLBMDA concluded its Legislative Conference with visits to nearly 200 congressional offices. ISFA has yet to be introduced in the Senate. Also last week, the association recognized Diana Perenza, vice president of Florence Corp., Huntington, N.Y., as its 2006 Grassroots Dealer of the Year. NLBMDA cited in particular Perenza’s creation of a Team Captain program to push ISFA as well as her collecting 200 signatures and raising $5,000 for ISFA at a buying show this spring.
Going to PCBC? Let Me Know
If you’re an LBM dealer and plan to attend the Pacific Coast Builders Conference in San Francisco May 29-June 1, let me know so we can set up a time to chat. I’ll be attending PCBC and am eager to hear your stories about business conditions, opportunities, and challenges.
We’re Getting Nominees for ProSales’ Public Service Leaders Award. Who Are Yours?
Do you know a dealer who’s doing great work for his or her community and profession? Several folks already have replied to my request for nominations for the 2007 ProSales Public Service Leaders Award, but there’s still time for you to offer your own names. Tell me about dealers who tirelessly commit themselves to the support and advancement of the communities where they live as well as to the LBM industry as a whole. Winners will be featured in ProSales’ August cover story.
Meet Moffit, Our Latest Yard Pet
 |
From Old Fort Supply Co. in Fort Wayne, Ind., comes this yard pet named Moffit. “We named him this because of the way he ran around the warehouse—it reminded us of the Moffett [forklift] that rides on the back of the delivery trucks,” says Susan Bailey Sonner, inside sales manager at Old Fort. “He can go anywhere.” Moffit showed up at the yard’s front door a year ago, nearly dead. But within a few days he had been nursed back to health. He lives mainly with Sonner now but still makes frequent visits to the warehouse and his fellow Moffetts. Got a pet at your yard? Send me an electronic photo along with info on the pet’s name, age, and habits.
April 19, 2007
LBM Leaders Ascend Capitol Hill, Return With a Dozen ISFA Commitments…
At least 12 more members of Congress said they will co-sponsor the Innocent Sellers Fairness Act, the National Lumber and Building Material Dealers Association (NLBMDA) told me yesterday afternoon, shortly after the conclusion of its annual Legislative Conference. That comes on top of the current dozen co-sponsors for the measure, which is filed as H.R. 989 in the House and has yet to be introduced in the Senate. One disturbing note: Just two of the 12 new signees, and only three of the 24 co-sponsors to date, are from the majority Democratic Party. Pursuing commitments from traditionally friendly Republicans may be a fine way to launch an effort that NLBMDA chairman Steve Kelly frequently refers to as a marathon, but LBM execs will have to travel far beyond that core audience if it hopes to win the race.
…Even as They Learn That Political Waters Have Subtle Undercurrents
Washington politicos have a magical ability to deliver strong and understated messages simultaneously. Rep. Lincoln Davis, the breakfast keynoter at NLBMDA’s Legislative Conference, showed he’s no slouch in this art. The Tennessee Democrat opened by stressing his independent voting streak, but within minutes followed that by criticizing Republicans for not passing key NLBMDA initiatives when the GOP ruled Congress. He even pointed out that Bill Clinton’s administration spent a smaller share of the gross domestic product than George W. Bush’s. Regardless of whether that minor stumping for the Democratic Party got through, Davis’ major point was that he is on the LBM industry’s side in favoring ISFA, hating the “death tax,” and seeking more affordable health care. And given that Democrats now hold narrow control of Congress, it didn’t hurt for this member of the ruling party to remind lumber execs that they have to talk to members from both sides of the aisle if they hope to see their initiatives become law.
Does Green Go Well With Orange? The Home Depot Thinks So
Managing editor Katy Tomasulo views with significance this week's announcement by The Home Depot that it has launched Eco Options, a product classification program that will brand all of the green products the retailer sells. “Though The Home Depot’s move opens up a slew of questions—my first being whether HD employees on the floor will be knowledgeable about green building—it appears to be an ambitious and bold step,” Katy writes. “Sure, it’s also a great marketing opportunity for a company that's been dogged in the press lately, but by making it easier for consumers to go green, The Home Depot is lowering one of the bigger obstacles to a lifestyle shift that is proving to be more popular—and more necessary—with each passing day and each scientific finding. And if Hayward Lumber is any indication, the formula could work. Sales for products in Hayward’s own green product branding program, called EnviroSmart, jumped 40% in its first full year, the Monterey, Calif.-based dealer told us last fall in "Green Machine." For those still convinced that green is a mere fad, consider Thomas Friedman's essay in The New York Times promoting the idea that ‘Green is the new red, white and blue.’” What do you think? E-mail Katy with your views.
Wanted: Nominees for ProSales’ Public Service Leaders Award
Do you know a dealer who’s doing great work for his or her community and profession? Tell me and we’ll consider that person for the 2007 ProSales Public Service Leaders Award. Last year’s winners, Rand Thomas of Sequim, Wash., and Steve Kelly of Covington, Ky., are great examples of the kind of people who deserve this honor: folks who tirelessly commit themselves to the support and advancement of the communities where they live as well as to the LBM industry as a whole. Such do-gooders frequently don’t seek out the limelight, so we need your help in identifying them. The winners will be honored in ProSales’ August cover story.
Do You Have Teenagers at Home? Ask ’Em How Much They’ll Get Paid
Teenagers expect to earn an average annual salary of $145,000 in the career of their choice, according to a survey conducted for Charles Schwab. The online poll of 1,000 Americans aged 13 to 18 found boys expected to earn $173,000 a year while girls figured they’d make $114,200. Schwab’s announcement notes, no doubt with raised eyebrows, that the average American wage is $40,000 and only 5% of Americans earn a six-figure income. The survey also found that the percentage of teens who prefer using a credit card in place of cash or check grew by three-fifths to total 29% of those surveyed.
Ruth Kellick-Grubbs Joins ProSales’ Editorial Advisory Board
It’s a special pleasure to announce that Ruth Kellick-Grubbs has agreed to join ProSales’ Editorial Advisory Board. That means she’ll be helping us shape our stories for maximum benefit to you and also will write for us from time to time. Many of you know Ruth from her 14 years of consulting, training, speaking, and roundtable work in the building supply industry. I’ve quoted her frequently during meetings with LBM dealers and found her ideas carried weight. Ruth has lived in six countries and says she speaks six languages, though she’s probably not counting her native Southern.
Read the Fine Print on Recent Housing Reports
While the markets focused on the government’s announcement of a 0.8% rise in housing starts and building permits in March from February, they ignored fine print at the bottom of the announcement that says it can take many months to smooth out the variations in the numbers caused by weather and holidays, not to mention regional differences. So let’s look at the actual housing start numbers for the first three months of this year. They reveal a total of 325,800 starts, nearly 30% fewer than what we had in the opening quarter of 2006. And don’t forget the regional differences; the declines so far this year range from 24.2% in the Northeast to 28.3% in the South, 30.7% in the West, and 38.0% in the Midwest.
Marketers, Take Note: We’ve Expanded Our Excellence Awards Categories
This year’s annual ProSales Excellence Awards expands its marketing categories to honor not just the best overall marketing campaign but also the best advertising and best Web site. We also will recognize yards that excel in Showroom Design, Best Use of Technology, and Best Overall Yard or Manufacturing Facility Design. Winners receive a feature article in ProSales, recognition during a special breakfast ceremony at the 2008 International Builders’ Show, and a $1,000 donation to the local or national charity of their choice. Click here for entry instructions or contact managing editor Katy Tomasulo at ktomasulo@hanleywood.com or 202.736.3303.
April 12, 2007
Travels on Tobacco Road
The state of North Carolina used to give its employees Easter Monday as an official holiday. Legend has it that the holiday was prompted in part by so many workers playing hooky to see a baseball game, but I think the real reason is because the weather is just so darn good when April rolls around. I too got to enjoy the rhododendrons, azaleas, dogwoods, and wisteria in bloom when I visited this week. My first stop was to the Stephens Supply Co. in Fuquay-Varina, the kind of small-town place where you’ll find cement tools, fishing equipment, and filing rasps in a single aisle and where a model train chugs along on track suspended from the ceiling. Then it was off to Smithfield and the Independent Builders Supply Association (IBSA), a distributorship that has grown into a $437 million operation serving 16 states. There’s more on both below.
A Nifty Form of Feedback
Stephens president Wayne Carver has been in the LBM business for decades and isn’t afraid to borrow a good idea when he sees it. One that he particularly likes is a feedback form that all new employees must fill out every two weeks for their first 90 days on the job. “We want to make sure they are learning about the job and the company during this period,” Carver says. “The way they answer often tells us if they truly understand the job they are here to perform. It also lets the department manager know if the person assigned to train the new employee is helping them learn.” Employees also are asked to rate their attitude on a 1-to-10 scale. That helps the supervisor see if the employee has a much different attitude about his or her performance than the supervisor does.
IBSA Launches Expansion Bid
IBSA president W. Ray Price is used to success, having helped take the distributorship from an $80 million business when he took over in 1999 to $437 million last fiscal year and from three states served to 16 today. But he’s aiming to become a billion-dollar operation, so the Carolinas-based IBSA recently began recruiting in the Louisiana-Mississippi region and in the Northeast. Price—whose father was a childhood friend of movie bombshell Ava Gardner—sells IBSA in large part as a frugal place that adds just 1% to the price of the goods it acquires and runs its operations for less than 0.5% of the cost of those goods. Heading outside of his natural territory means Price’s team has had to get used to such local traditions as crawfish boils, but it’s more than willing to pay that price.
NLBMDA Sets Its Priorities for Capitol Hill Meetings
The National Lumber and Building Material Dealers Association (NLBMDA) is urging its members to stress three major issues when they meet members of Congress and their staffs during NLBMDA’s Legislative Conference next week. Topping the list is support for H.R. 989, the Innocent Sellers Fairness Act, which has a dozen House sponsors and has yet to be introduced in the Senate. Second is support for access to affordable health care through passage of legislation that permits small businesses to band together and set up their own health plans. Third is repeal or reform of taxes on estates—aka the “death tax” —before the current repeal expires in 2011. Call 800.634.8645 if you decide at this last minute that you can come to Washington.
Mountain States, Southern Interests Also Speak Up About LEED
Geri Adams, head of the Mountain States Lumber and Building Material Dealers Association (MSLBMDA), took note of my WebbLog item last week on the Texas LBM association’s concern about language in “green” bills at the Texas statehouse promoting LEED. She notes that MSLBMDA helped expand the language in a measure in Colorado that would have limited green rating systems. (See www.mslbmda.org/news.shtml.) In addition, several bills in Arizona and New Mexico that raised the association’s ire have died. Meanwhile, Wes Goodroe, former executive director of Georgia’s Construction Suppliers’ Association, notes several associations in Atlanta also are defending the LBM industry against green groups. “This is a growing problem in this country that we do not need,” Goodroe writes.
This Month’s ProSales Salutes the Small Independent
“Less Is More” is the theme for the cover story in April’s edition of ProSales. In it, we look at four smaller independents that are capitalizing on creative thinking, stellar service, and industry alliances to prove bigger isn't always better. The April issue also examines how a growing number of dealers are implementing GPS and other fleet technologies (see “Tagged, You’re It”), while “Consider the Alternatives” looks at the potential of ICFs and SIPs.
“Never on Sundays,” These Dealers Say
We received several messages from dealers this week telling us that they, like McCoy’s Building Supply in San Marcos, Texas, (see last week’s WebbLog), have decided deliberately against operating on Sundays. In Petoskey, Mich., Preston Feather Building Centers not only is closed Sundays but also shuts its doors at 1 p.m. Saturday. It does this in small part because its customer base is 90% pro builder and in larger part out of concern for its staff, HR director Kate Courtney Scollin writes. “We do not feel our customers would be best served with part-time or temporary employees just to man the store a bit longer,” she writes. Another dealer that chooses to stay closed on Sunday, Standale Lumber & Supply Co., Grand Rapids, Mich., does it as part of a corporate mission that includes “Balance” among its six key values. “I firmly believe that regardless of one’s religious orientation, a corporate attitude like ours contributes greatly to employee as well as customer loyalty and retention, especially in the community in which we are located,” Standale systems manager Rick Vandenburg says. And down in Fort Lauderdale, Fla., M. Scott Whiddon, president of Causeway Lumber, says the decision to look out for its employees’ interests helped it decide what to do when the big boxes arrived on the scene. “We stuck to our guns, and I think we are better for it today,” Whiddon says.
An Inside Expert’s Warning—and Advice
I’d like to think Boyce Thompson reached the pinnacle of his journalistic career when he served as editor of ProSales in the 1990s, but he also is no slouch as editorial director of Builder magazine and several other of our sister publications at Hanley Wood. Thompson has his own online column, and on Monday his message was a bummer: “The home building industry will feel the effect of the fallout from the subprime and Alt-A mortgage market for years,” he wrote. “… Like bad time-release medicine, it will spread excess inventory throughout the real estate system for years. It will depress resale prices and make it more difficult for builders to get the pricing they want, or need.” As a result, Thompson foresees stronger competition between the new-home and existing-home markets. If you’re mostly interested in the new-home side of things, his recommendation is to urge builders to offer features that aren’t available in existing homes.
Remodeling Magazine Examines the Credit Card Issue
Sister publication Remodeling magazine features Dan Fesler, CEO of Lamperts in St. Paul, Minn., in an article this month on remodelers’ increasing use of business credit cards at LBM dealers. The story quotes a consultant who encourages remodelers to whip out the plastic. But like many dealers, Lamperts accepts credit cards only at the time of purchase and seeks to avoid taking them for payment of an account.
April 5, 2007
I-35 Tales of Los Lumber Boys and Manly Men
 |
Texas Lumbermen Raise Alarm Over LEED
LAT approved a resolution that reflects the group’s growing concern over several green initiatives now before the state legislature. In particular, LAT is worried about measures that would require construction programs to adhere to the Leadership in Energy and Environmental Design (LEED) green building rating systems. LAT notes that LEED recognizes only timber certified by the Forest Stewardship Council and thus discriminates against the Sustainable Forestry Initiative (SFI) and the American Tree Farm system. “Until the several inherent flaws in LEED are fixed, we strongly urge the Texas Legislature to amend its bills to specifically include other credible and internationally recognized green building rating systems, in particular Green Globes, to meet its goals in promoting high-performance and sustainable design and construction for public buildings,” the resolution states. Do you know of other groups that are lobbying their local or state government over LEED, FSC, and SFI? Tell me at cwebb@hanleywood.com
Going to NLBMDA’s Legislative Conference? Check Your Meeting Agenda
The National Lumber and Building Material Dealers Association asked me to remind you that if you’re coming to Washington for NLBMDA’s Legislative Conference in two weeks, you should double-check with your regional LBM association to ensure your meetings on Capitol Hill are all set. Topic No. 1 no doubt will be H.R. 989, the Innocent Sellers Fairness Act, which has been introduced in the House and now has a dozen co-sponsors but has yet to be introduced in the Senate. NLBMDA’s goal is to recruit as many dealers as possible to promote the legislation.
Should You Have Sunday Hours? Two Views
 |
Local tastes do matter, it seems. For more proof, look to Canada, where a press report says local protests prompted The Home Depot to close its outlets in Halifax, Nova Scotia, tomorrow on Good Friday and on Easter Sunday. Do you know of any other LBM dealers that have decided intentionally against opening on Sundays in general? Tell me at cwebb@hanleywood.com
A Pre-Boomer and a Gen-Xer Speak Out About LBM’s Future Workers
This WebbLog’s series of letters on the quality of LBM’s next-generation workers prompted two more letters. The first came from Charlie Habegger, president of Habegger Building Supply in Berne, Ind. He started the business with his brother in 1956, and now their sons run the company. “We tell the employees they are as important as the owners,” Charlie writes. “… They are part of the family. What type of employee will the next generation be? I don’t know. However, if they have had a good family life at home, I can’t help but think they will enjoy working in a family-type business.”
We also heard from a much younger person: Jimmy Cissel, vice president for business development at Manning Building Supplies, Jacksonville, Fla. “I agree and disagree with the stereotypes your articles have described,” Cissel wrote. “My father worked from sun up to sun down. I started at the bottom and I am working my way to the top. My friends ask, ‘Why am I always at work?’ It is what I do to achieve my personal goals. My personal joke with them is ‘I only work half days’—12-hour days are not uncommon. I can always be reached by giving our customers the three numbers to find me. … At the start of this year my boss promoted myself and another to vice presidents. Both of us fit into the Generation X bracket. …There is a part of our generation that makes the decision every morning to do just enough to get by. I don’t understand these people. How can anyone not want to be the best?”
Keep sending your thoughts to me at cwebb@hanleywood.com. We plan to run all the recent letters in the May edition of ProSales.
Three Reasons Why You Should Worry About a Housing Turnaround
Deep into yesterday’s Wall Street Journal story on problems with exotic mortgages are three chilling items for anyone who expects the housing market to turn around soon: 1) Moody’s Economy.com estimates that subprime and so-called Alt-A loans—which include many no-documentation or low-doc loan types—together account for nearly 40% of the home mortgage loans originated last year; 2) subprime lending could decline by as much as 50% this year from 2006 and Alt-A loans also will drop sharply, an analyst at UBS predicts; and 3) Economy.com’s chief economist says the reduced number of subprime mortgages combined with the dumping of houses due to foreclosures will cause median prices for sales of previously occupied homes to fall nearly 5%, or double the decline he expected in January.
March 30, 2007
Gone to Texas … and Iowa, Too
I look forward to meeting dealers from Texas and Louisiana this weekend in San Antonio at the Lumbermen’s Association of Texas’ 2007 convention and expo. After that, it’s off to Iowa to visit a yard near Des Moines and get a sense of how LBM operations are faring in the Heartland.
Next-Generation LBMers, Part 1: Another Viewpoint
My comments March 15 on the challenges that LBM executives see in dealing with workers born after 1965 prompted additional letters. Brian Harrington of Boise Cascade says he has noticed a marked change in attitude over seven years of visits with college students in the building materials management program at his alma mater. Harrington paid his dues and worked his way up the ladder to regional manager and presents himself as a typical success story. But today, he writes, “the majority of the class had no interest in the path that I had taken to achieve my success. Long hours, minimal starting pay, and travel do not interest them.” On top of that, “their entry compensation expectations for our industry are bizarre,” he says.
Next-Generation LBMers, Part 2: Advice From the Pulpit
Your requests for guidance on how to find and engage Generation X and Echo Boomers has sent me searching far and wide for advice. One of the stranger resources—the result of Googling my name as a lark one day—came from another Craig Webb who runs a Web site that helps ministers. His site recently posted a column in which a consultant named Ken Gosnell gave advice to preachers on how to connect with various generations. Here’s his trenchant thumbnail analysis of the two groups:
Gen X-ers (born between 1965 and 1980): “The key word that epitomizes this group is ‘community.’ They were raised with both parents working and often dealt with loneliness and solitude. They crave relationships although they are independent. They are often impatient because they