Made in the U.S.A.

The Sept. 21 issue of Home Channel News will examine the phrase "Made in the U.S.A." The story will look at the factors influencing manufacturers' decisions regarding where their products are made -- in the United States or overseas. 

There's no shortage of U.S.-made home channel products, some of which are listed here. We asked: what kind of an impact does the phrase "Made in the U.S.A." have on the consumer, and here's what we heard:

“Until June 2002, I was vice president of sales and marketing for American Tool Cos., the U.S. manufacturer of iconic tool brands such as Irwin Speedbor bits, Vise Grip locking pliers, Quick Grip bar clamps, Hanson tap and dies, Straitline chalk reels and other products. I had joined the Irwin company in 1990 as a sales manager, and Irwin was acquired by American Tool in 1993. Newell Rubbermaid acquired American Tool in 2002 and renamed it Irwin.

“My experience with the importance of ‘Made in the U.S.A.’ while at American Tool depended on the end user buyer of the product. Tradesmen and professional tool users looked to the brands that were made in the U.S.A. These people realized that while they could buy cheaper tools made in Asia, the lower purchase price often resulted in extraordinary cost when the tool failed. The failure of the cheaper tool resulted in: costly down time, an unplanned trip to the store to get a replacement, possible danger to themselves, possible danger surrounding the project they were working on and other issues. 

“My experience with the importance of ‘Made in the U.S.A.’ continued as the vice president of sales and marketing for Megapro, a manufacturer of patented multi-bit screwdrivers. Again, tradesmen and professionals who used tools for a living looked to the quality of our product that was ‘Made in the U.S.A.’ 

“For the average DIYer or casual tool user, they seldom put tools to the extreme duress that a professional does. The DIYer doesn't need a tool that performs every day, so they can purchase lower-quality, lower-priced products. Serious tool users have learned that their tools are a long-term investment that cost less in the long run.

“From a U.S.A. economy standpoint, I think that it is outrageous that we have allowed the wholesale exit of ‘Made in U.S.A.’ manufacturing. I could go on and on about the loss of good paying jobs, the effect on the middle class and a multitude of other issues that the loss of U.S.A. manufacturing jobs has caused. 

“Thanks for the opportunity to let me vent about an issue that I feel passionate about.”
— Bill Shine

“Little if any impact. We’re all so used to NOT ‘Made in the U.S.A.’ -- it doesn’t seem to matter any more. Besides, a good portion of the time, the cost differential is what makes the difference -- or -- there is no opportunity to make a comparison as to quality exact features, etc.”
— Paul Siegel
GoPro Construction Solutions

“We too are an American manufacturer. Builder's Best, Inc., located in Jacksonville, Texas, makes dryer venting and general venting parts for the retail and building industry. In general, buyers appreciate knowing that we've kept jobs here. The temptation of cheap products is finally being acknowledged as an expense, in lost jobs, shipping delays and poor quality. It hasn't been easy, but we are encouraged when buyers respect our efforts to keep costs low and still provide customers with usable, and often superior products.”
— Laura Andersen
Builder's Best, Inc.

“If we are ever to survive as a nation, and not this watered down version we are becoming, the words ‘Made in America’ should be our battle cry. It should have influence over every purchase we make. Whenever possible, if we pick up an item and it says anything other than that, then we should put it down.”
— Jim Thoel

“I will gladly pay a premium on products ‘Made in the U.S.A.’ over products made overseas and for several reasons. Environment, quality and reliability are reason enough, but the big one for me is jobs. I would rather see jobs in the U.S. lost to automation and innovation rather than lower wages from a foreign country.”
— Mike Denny
Villa Deco

“The phrase ‘Made in America’ used to be a reference to quality. Now the political climate has added an undertone of patriotism into the message. While these concepts are not mutually exclusive, I hope ideology does not trump the innovation and hard work that used to set domestic products at the top of the world's standard.”
— Ken Sellai

“From the surveys we are doing for our member stores, more customers are requesting ‘Made in the U.S.A.’ products.”
— Sandy Thatcher
Do it Best 

“I now intentionally look for ‘Made in the U.S.A.’ on many occasions. I have had so many bad experiences with tools, utensils, sporting goods and general hardware poorly manufactured in China, that I now consciously avoid that label on most everything.  I actually haunt the garage and yard sales looking for used tools ‘Made in the U.S.A.’ They are routinely far superior to the new junk made in China. If you have any doubt, pick up an old pair of needle nose pliers (Made in the U.S.A.), and compare the tip and cutter blade alignment to the new crap from China. I will gladly pay more to get what I desire in quality.”
— Bob Springate
Belvidere, Ill.

Crisis? What Crisis?

Home Channel News pointed to football columnist Gregg Easterbrook, author of Tuesday Morning Quarterback, for his comment on the housing crisis.

"Housing prices are indeed down from their 2006 peak," Easterbrook wrote. "But the typical American dwelling is still worth nearly 50% more than in 2000. That's no crisis."

We asked our readers to respond, and here are some of them:

"… except everyone spent the appreciation (monetized via HELOC or flipping). The word ‘bubble’ refers not to prices but to the debt that underlies them.”
— Alan K. Gay
CEO
BuyMetrics

“If we focus on housing prices or values, the term ‘crisis’ is certainly overused and over-hyped. If we are talking about the unemployment, business closings and pessimism prevalent in the last year or so, we may not be overusing this term. We can all survive having our home values drop to year 2000 levels, but if people are unemployed in huge numbers and if foreclosures were to continue at the current pace, we are in crisis. I don’t believe that this is the case. I think we are on the verge of a slow recovery that will show a little downturn this winter before climbing again. Unemployment is the key. If we can put people back to work, we will be OK.”
— Sterling D. Golder
Britton Lumber Co.

“Ask TMQ if he wants to buy a couple of houses in Texas. I will pay closing costs to get him started.”
— Willie Hudson
Mineral Wells Hardware and Rental
Mineral Wells, Texas

“Thank you for informing about Tuesday Morning Quarterback. The NRLA had [Easterbrook] as speaker on environmental issues in the '90s and I got to talk to him -- a cool guy. The ‘housing crisis’ should be called the ‘due diligence crisis.’ Where were all the lawyers, CPAs and security underwriters while bad loans were being stuffed into bad paper? The market should be allowed to shake itself out however long it takes. Free men, free markets.”
— Seth Arluck
New Hampton Lumber Co.

Nardelli's new job

Bob Nardelli has a new job. The former Home Depot CEO is now the CEO of Cerberus Operating and Advisory Co., a division of Cerberus Capital Management. Immediately prior to this position, of course, Nardelli was CEO of Chrysler, a Cerberus company before its Chapter 11 filing and subsequent sale to fiat.

The Cerberus press release points to the following career achievements:

"During his tenure [at the Home Depot] there Mr. Nardelli doubled sales as well as the number of store operations; moved globally into Mexico and China; and delivered over 20% earnings-per-share growth for four consecutive years while growing dividends from 16 cents to 90 cents."

Mark Neporent, COO of Cerberus, said: "Bob is one of the world's best operating executives and a proven leader."

Here are some of the comments from HCN Weekly Digest readers:

"How does a guy like Nardelli continue to land these high paying executive positions with such a pathetic track record? Blake has been cleaning up Nardelli's mess at Home Depot for the last 2 years (and doing a good job of it), and we all know the condition Chrysler is in."
— Merritt Huber
Carolina Lumber & Supply
Atlanta

"Nardelli's skill set is best described by Steven Covey in his book ‘The 7 Habits of Highly Effective People’ -- Specifically Covey's Golden Goose analogy. Nardelli's MO is typical of most corporate management executives today.

“Their exclusive focus is on the upcoming quarter's financial results. Instead of feeding and nurturing the Golden Goose, Nardelli would strangle it. For a business to be long-term successful, a great deal of focus is required on top line (sales/revenue). We don't see this very often in Corporate America today; with all eyes on the upcoming quarter, Nardelli et al are consumed by cutting expenses in order to make profits look better. This of course sickens the Golden Goose. Unfortunately symptoms are not immediately apparent, and short-term results satisfy immediate stockholder needs, so the process and damage is cumulative."
— Miles Byrne
MGB Sales

“Nardelli should paraphrase Lou Gehrig: ‘Today, I am the luckiest man in the world.’ Loses out as Welsh’s successor at GE, gets lovely parting gifts. Gets great job at Home Depot. Rides Home Depot down, gets lovely parting gifts. Gets great job at Chrysler. Rides Chrysler into bankruptcy, gets lovely parting gifts. Gets great job at Cerebus. Rides …. It’s one thing to have a set of photos and stumble into one job but to have a photo album for every sector of the economy?”
— John Daingerfield
Jaeger Lumber
Union, N.J.

“In my mind Nardelli’s executive record is somewhat questionable. If I remember correctly Nardelli took over the helm of Home Depot in about 1999, and for the first few years they showed excellent growth. I believe it was due to their aggressive expansion plans building 100’s of new stores a year. After a few years they had saturated the market areas for their basic Home Center layout.

“Nardelli realized that if they did not continue to build new stores that the growth of annual profits would flatten out, and his star would not continue to rise. So he decided to delve into to the specialty market. He targeted the upscale market in New York City with the Village Square design. They also tried various other designs in cities like Dallas. However these upscale layouts just didn’t go over, and profits flattened out and then fall off. This lack of growth eventually led to the stockholder revolt that ousted him from the company.

“Then Nardelli took over the reign of struggling Chrysler, and as we know now his performance was less than stellar.

“Now with Cerberus he might be a good fit. If I recall, Cerberus is not a publicly traded company. It is a group of wealthy investors who banded together and operate as corporate raiders.”
— Kent Pearson
Retired

"It continues to astound me how failed executives like Nardelli can continue to land lucrative powerful positions in business.

“By totally not understanding which of Wal-Mart's practices and philosophies should apply to the Home Depot, he helped them lose their position of leadership, from which Frank Blake has been working hard to recover. Nardelli was unable to understand perhaps Home Depot's greatest competitive strength, the value of its full-time employees as it effected the Home Depot's service reputation. His obsession to increase earnings in the short term cost dearly in the long term. I know little about his stint at Chrysler, except for the bankruptcy proceedings and his dismissal.”
— Michael Landau
VP sales
Brewster Home Fashions

Railing against lead-paint lawsuits

A Mississippi jury awarded $7 million to plaintiffs who brought a lead-paint lawsuit against Sherwin-Williams. The suit was filed in 2000, and Sherwin-Williams stopped making lead paint in 1972.

The judgment against Sherwin-Williams sparked a flurry of comments from readers:

"The [Sherwin-Williams] lawsuit is nothing more than legalized extortion, and the plaintiffs' lawyer(s) should be brought up on RICO statutes. Anybody with any education knows that lead-based paint is toxic, just like tobacco (yet people still smoke -- I don't get it). I don't know what the circumstances are regarding the lead exposure here, but where it involves kids (lead is more toxic to growing nervous systems in kids than adults), if there was a chance that I would be putting my kids in jeopardy I would at least ask questions. Plus, cheap, easy-to-use lead test kits are available, and we certainly sell them here.

"Frankly, I would hold the parents responsible for any health effects caused by the lead with all that is known today. If you go into a pediatrician's office, you will find warning notices available about the toxic effect of lead exposure in kids. Where is the parents' responsibility? And don't tell me that their responsibility lies in the fact that they have to live with sick children. They should have done something about this sooner.

"Further, federal law makes it mandatory that landlords deal with old lead paint in older buildings. If this was a rental situation, all the parents would have to do is challenge the landlord to get his butt off the ground and deal with it, or he would have to deal with local health officials."
— Augie Venezia
Fairfax Lumber & Hardware
Fairfax, Calif.

"Obviously the award will be appealed. Frequently the award is reversed or reduced as a result of the appeal. I hope everyone who reported this absurd award will be diligent enough to report the results of the appeal."
— Kevin O'Donnell
Central Woodwork
Collierville, Tenn.

"While few of your readers hold a law degree, I find that a lot of the courts' time is taken up by people who want something for nothing. I hold children in a special place in my heart -- would never want to see anything happen to one -- but this is the type of action that makes me glad I gave up being an attorney. If my concerns are that there may be lead paint around a house, building, barn or whatever, I would test first. You cannot continue to blame the paint makers for this. The consumer base drove us to lead zinc paint for its lasting ability.

"I once was the lead [attorney] in a case by Army personnel involving rubber tank treads. They were produced in Cleveland. Since the Army failed to monitor these guys, they were told to dispose of [the treads]. They did. Burned them. Fumes got them sick. Filed against the manufacturer, truck company that hauled them and about 10 others. I finally got my client free, but only after he spent $500,000, some of that mine, to get rid of this.

"If people who filed had to pay, or could pay, then this would be different. Some attorneys will take anything, trying to score the big one. Now you know why I stopped."
— Name withheld

"[These lawsuits] should no longer be permitted. Enough is enough already. Lawyers will take on any case, and judges and juries have proven to be nutty decision-makers. At some point, except for murder, time should run out on such insanities."
— Paul Siegel
VP sales
GoPro Construction Solutions
Cleveland

"We all follow current building codes and manufacturing restrictions. A manufacturer should not be held accountable for following restrictions that were applicable at the time. No one can anticipate all of the future impacts to health and welfare and the environment. It is absolutely wrong for anyone to be held accountable for unforeseeable future events based on accepted manufacturing or construction practices. I fail to see negligence if manufacturers are meeting accepted manufacturing standards."
— Name withheld
Billings, Mont.

What a crock of poo. This is not good for the paint manufacturer, or any other paint manufacturer that has been around since the seventies. It is not good for the building industry. It is not good for any business in their search for affordable liability insurance. It is not good for any American business. These kinds of lawsuits don't do anyone any good except for the litigious parasites that bring them to court."
— Greg Hartmann
Sales program manager
Tiger Claw
Bristol, Conn.

Appraisal dangers

Are conservative appraisals a danger to the recovery, or a foundation for a recovery? Our readers respond.

We pointed to a comment from the National Association of Realtors (NAR) economist Lawrence Yun: "There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected." Yun explained that lenders are using appraisers who may not be familiar with a neighborhood or who "compare traditional homes with distressed and discontinued sales."

We asked if conservative appraisals are a danger to the recovery, or a necessary foundation for one. Here is what we heard:

“Overstated appraisals were what ran the prices up so quickly. However, in our case where we do update homes completely inside and out, we deserve a higher appraisal because everything in the home is new. In our case, we tore out all the old carpet, replaced it with new tile and hardwood, new cabinets, new granite countertops, new faucets, new paint, new roof, new tiled showers and baths, new deck, all new landscaping and a brand new storage building that looks like a small home, [as well as] new upstairs heat and air to separate the controls of heating and cooling each to a floor. We added a new laundry room and small office all in new tile.

“With this kind of updating, this should be considered like a brand new home. So, they need to consider as well what people actually do to the home, not just what the comps around you are. The homes around us are old, outdated, have poor landscaping, have old everything, and with ours is new everything, so there is a difference. This should be noted, and given extra credit, for when appraisals are done.”
— Dale Goodwin
Poultry Electric & Pro Hardware LLC

“The conservative appraisals are necessary to correct the market. There are drastic considerations when appraising any property. First, the large majority of homes for sale have lost property value because of the recession. This is due in part to the housing bubble of the last few years, which inflated property values too much and the market had to eventually correct itself. Any properties foreclosed in a neighborhood usually lower the values of the houses around them. There are still too many homes being taken in foreclosure. Second, some real estate agents are saying that the property values may drop even further. I have heard estimates of 10% to 25% drop in values may still happen. Finally, the threat of higher interest rates will usually push property values down. The higher the interest rate, the less customers can afford when purchasing a home.

“Homeowners wanting to sell properties are struggling to find buyers qualified to obtain the mortgages. Homeowners willing to lower the prices will impact the other properties in the neighborhoods. I have seen properties devalued in our area during the past two years sitting on the market. Several homeowners have dropped prices as much as $800K trying to sell them with no buyers, and most of these properties are highly valued for their location(waterfront). This same neighborhood had at least three foreclosures during the last year. One such house is valued at $2.2M on the tax records and cannot find a buyer even at $1.4M. There have been others valued at $3.6M and dropped to $2.8M and still no buyers. Many of these properties have been for sale for two to three years.”
— Anonymous

“It is my opinion that "conservative" appraisals are a huge problem. The appraisers are basing there appraisals on prices of homes in foreclosure. We live on a private golf course. They are not taking into consideration the condition of houses, the location or the view. It appears they are taking the easy way and lumping everything together. Realtors are just about as bad. They can't understand why residence have to be members. They look at it as a negative rather than a benefit or privilege. They are trying to put people in houses when they really can't afford the lifestyle. All they are interested in is selling houses and making a commission, and not concerned with what happens to the buyer.”
— Jim Mather

“The home appraisal system for real estate is, and has always been, a mess. Values are based on supply and demand mixed with whatever the market will bear; complaints by values from sellers and buyers, and bankers need to justify a loan and a realtors need to make a sale. It's time to overhaul the system and base home values on replacement cost mixed with increasing development costs with some devalue built in for older homes that have not been updated.

“Potential home buyers need to be better informed before they make one of the biggest purchases of their lives. A friend of mine recently commented that he made a commitment to buy a new home based on homes that were available in his market after about a 15 minute walk through of an existing home based solely on his first impression and the realtors advice. I went to an open house on a Saturday afternoon because my daughter was interested in becoming a home owner. The house in question was built in the 1920's and had not been updated. It had the same original double hung windows, interior doors, fir flooring, rough lumber floor joist, home made painted cabinets, vinyl (rubberoid) countertops, and stucco on the outside. I commented to the realtor the following week that that home was worth the value of the lot minus demolition. (The house was about 900 square feet.)

“He told me they sold the house the weekend of the open house for the asking price $139,000. That house value was based on the current appraisal system, and was extremely overpriced, but the realtor made his commision, the banker sold the note and the home owner is stuck with an overvalued house. If there was an appraisal system in place to prevent this from happening, new home buyers could find affordably-priced homes with potential that they could improve over time. It's time to remove greed from the equation.”
— William Dahl

“[Conservative appraisals are] definitely needed for a foundation to recovery. If a market is distressed that becomes the “market” price.”
— Tom Snavely
Peter Lumber

“Realistic appraisals must be a prerequisite of any recovery.

“Real estate appraisals are merely a system of weights and measures. If we have dishonest weights and measures in our judicial system then we are subject to injustice and judicial tyranny as a society. That principal applies to every area of society including the economy. If buyers and sellers are entering into transactions with unrealistic measures of market value then eventually the truth will come out (possibly with the first generation of the transaction or with generations that follow), and when it comes out somebody is going to get burned. The answer to who really gets burned is, in a very broad sense, the society at large. When buyers and sellers can’t trust appraisers to give accurate and up-to-date valuations then they become reticent about entering into such transactions and without trust the whole system comes crashing down. There we have a foundational, and honest, appraisal of the condition of today’s housing market.

“Set a standard of honesty and build from there.”
— Anonymous

No bump from the stimulus

“Our customers are buying based on need, not on any silly stimulus package. And some that do need, or want, are not buying because they are scared of the government's next mandates, e.g., health care, energy, etc.!

“If Washington and the media would just shut up and leave things alone, the economy would fix its own wounds as it has in the past. Don't they know that they created this mess? I have no pity for any media company that has lost revenue in these times. They helped it get started and fueled the fire.”

— Clyde Fickes
Owner
Fickes Home Center
St. Charles, Iowa

Company slogans ride again

In the June 15 issue of Home Channel News, we run down some of the more interesting slogans of the HCN Top 500 Scoreboard. For instance: "Where Warriors Prepare For Battle." But there are certainly some good ones that we missed. Here are some more from our readers:

"I love what Wal-Mart has done with 'Save Money. Live Better.' A great quote is: 'Employees come to your company for the mission, but they stay for the vision, and the strategy helps us meet both.' "

— Jeremey Wales
Director merchandise replenishment
Wal-Mart Stores 

“HD Supply’s slogan is ‘Always On The Job.’ ”

— Mason Howell
Branch manager
White Cap Construction Supply 

“How about Simms Machinery: ‘Experts in Casing Assembly!’ ”

— Dan Simms
Simms Machinery 

“The slogan for Randall Lumber & Hardware is ‘Building Taos since 1921.’ ”

— Paula Randall Ervin
Randall Lumber & Hardware
Taos, N.M. 

Build a better mousetrap

In the previous issue of what is now Hardware Store Digest, an editor confessed that he had used glue traps to kill mice. We received no hate mail, but we did receive a variety of responses and one video link.

The sticky rodent-control product was an object of protests during Home Depot and Lowe's shareholders meeting. People for the Ethical Treatment of Animals (PETA) objects to the use of such traps.

Here are the comments we received from readers:

“First, I am not a big PETA fan -- however they do have some good qualities.

“The glue traps should have been outlawed years ago. They are the most heartless forms of torture. Not only do rodents get stuck in them for days at a time dying of thirst, hunger and biting at their feet to get free — but other insects and animals get stuck as well.

“In addition, from personal experience of moving into a home that had these placed all over and out of site, you can get quite a surprise when you come upon these little skeletons stuck to glue — realizing what they had been through.

“If you need to kill them, the spring-loaded type mouse traps work very quickly. They are probably the most humane. You might compare it to getting the guillotine versus water-boarding.  

“Thank you for addressing this issue -- it should have been done years ago.”  

— Chris York
Diamond Machining Technology 

“Vermin are vermin, and how you get rid of them is your business, not the business of PETA. I use them all the time, and they are great for mice, and you get a side benefit from them when you lay them out because they catch all kinds of crawling insects. Is there a division of PETA called People for the Ethical Treatment of Insects? These people are out of control.”

— Russel Snow 

“I support the use of glue traps, as they are very effective and most easily disposed of, once used.  We have used them here and are now rodent-free.  

“Regarding PETA, they can protest all they want, but that will not stop normal civilization from doing the things we do, which goes far beyond ridding ourselves of rodents. I routinely eat crawfish (which have been boiled live), sushi, meat of all varieties and wear a leather jacket in the winter. The Bible says that man has dominion over the animals, and I am a Christian, not a Gaia worshiper.”

— Kevin Rooney 

“In the marketplace there are many mouse control options available, which are effective in capturing and humanely treating these common pests, whether it be by humane release or a swift and non-suffering death. We believe there are many products that merchants could choose instead of products that have come under such widespread criticism.

“In our opinion, buyers and merchandisers in this category either are pressured by their superiors or hold a misconception that their category-offering must be dominated by products like: poisons, snap traps and glue traps. While these have been traditional methods of mouse control, each has its drawbacks, particularly a potential danger to the consumer who has a mouse problem in his/her home and also has a family, which may include small children or a pet.

“I think you will find merchandisers in almost any category resistant to change. Their concern may be losing sales or profits in the category. This pressure and fear affects the item selection we find on store shelves. Seldom do you find a buyer willing to take the risk and break ranks to introduce a new product without a proven track record. Many times we find the ‘me too’ products, which are available at the majority of retailers. Unfortunately this lack of pioneering and innovation will quickly stagnate a category.

“Why choose buying a mouse control item at ABC Box Store instead of XYZ Box Store when in most cases they have the same product, just a different brand? Make your store a destination for consumers by introducing items that are truly innovative and feature broader benefits, whether the added benefit is to be humane, eco-friendly or safer for families.

“I have been serving the hardware and home center industry since the early '90s. I've seen the marketplace consolidate, and the companies that are still successful and around today are those that have embraced innovation and change. If this pioneering and ‘taking a risk’ mentality was fostered at the merchandising level, these companies would see more excitement and more buying in their aisles even in these tough economic times.”

— Bryan Muche
Green Bottle USA 

“It is more humane to use the spring-loaded trap. It kills them quickly, with no suffering. I don't really see the advantage to the glue traps, but I have no problem selling them. If a consumer wants to buy a legal product from me, I am happy to sell it and make some profit. Additionally, if I set a nice humane cage trap THAT I HAVE TO CHECK EVERY HOUR, why would I want to set it free?  It will then just come back. It will become trained to come to my house, to find my piece of cheese, to sit in a cozy cage to eat in peace and then do it all over again. What a deal.”

— Anonymous 

The rising price of gas 

Gas prices have been rising steadily in recent weeks to a national average of almost $2.62 a gallon. That's up from $1.62 a gallon at the end of last year. Here's what our readers told us about the mixture of rising gas prices and the current economy:

“In response to your question about higher gas prices, they just don't get it, do they? I have a family of four with one child driving, so there are three vehicles being driven daily at our house. Last year when gas prices were $3.50 to $4.00 per gallon, we spent an extra $300 to $400 per month on gasoline for three cars. That's an extra $300 to $400 over and above what we spent for gasoline before and since gas prices dropped.

“Everybody keeps moaning about the economic difficulty we're in, yet I hear no politicians citing gas prices as a key problem, despite the fact oil companies are breaking profit records on a repeated, regular basis.

“If a family of four like mine saved $300 to $400 per month after the gas prices dropped back $2.00 or less, does anyone think that might affect my economy just a little bit, maybe? Does anyone think if my family had that many more dollars available, we just might spend some of them on the kinds of things that drive our economy? Just maybe? Are our leaders that naive to not see that? I can't believe that's the case.”

— Lavern Schlabach
Keim Lumber 

“Most of our economic downturn can be blamed on expensive oil and gasoline prices.  Now that gasoline is back up to $2.50 per gallon, I fully expect our recovery to slow.  The level at which people can afford to put gasoline in their cars and still spend their money on other things is $1.75 to $2.00 per gallon. Anything higher than that eats up their extra earnings they might use on something else.”

— Mark Lorber
Gilcrest/Jewett Lumber Co. 

“This is my opinion, a person who has started, owned and operated a ‘family’ building supply business for over 50 years and is now in the hands of the younger generation.  Next year if I live long enough I will be 80. Therefore these are the opinions of an older man.

“Yes, the price of gas here this morning is $2.89.  Pricing will continue to be a problem unless Congress will allow oil companies to drill here in America where there is all the oil needed to eliminate the import of foreign oil. Yes, we do need alternate energy. However, we need to get the most economical forms, not what puts money in the pocket of politicians. In my opinion our nation is run by a majority of politicians who are not concerned about the ‘small’ business people and are only concerned about getting re-elected next election. They will tell the average person what they want to hear even if is only a part or if any truth. Today it is difficult to separate truth from fact without really investigating the facts, and even this is sometimes difficult.

“Unfortunately the majority of individuals who have the most power in Washington have never had to meet payrolls or be responsible for a company to make a profit to stay in business.

“As I see it, the government has taken over and is dictating financial institutions along with two auto companies. I feel sorry for Ford. GM and Chrysler will be forced to produce gas-efficient cars, which will in turn take less fuel, and the oil companies will in turn increase the price of gas. This only makes sense as they are in business to make money.”

— Charlie Habegger
Habeggers Ace Lumber Building Supply
Berne, Ind. 

“In Grand Rapids, Mich., we are at $2.95. I’m on the road, and the extra money I had for a weekly dinner out or a movie is going in my tank. Thank you Wendy’s for the dollar menu! Increasing gas prices will affect my family’s travel plans this summer. What I don’t get is: why are prices raised immediately on the gas in the tanks at my stations? The cost paid for the gas in the tanks hasn’t magically increased, yet the increase at the pump is immediate. They should not be allowed to increase or change prices until the next tanker arrives.”

— Don Zylstra
Alliance Home Improvement 

“Higher energy cost had a major impact on consumer spending last year. It’s a tax. It also eroded corporate profits. It will do the same again.”

— Jon Stier 
Stier Supply Co.
Columbia, S.C  

“Once Obama took office, he negated all the Bush declarations that were driven by the people. All of the ‘Drill here, drill now’ momentum was killed.”

— Bill Mitchell 

“[Rising gas prices] will -- at best -- slow the recovery, and may put an end to it for the time being, and could possibly put it in reverse. Problem is, early in its changes, i.e. presently, no one really knows. Because it is said, and I firmly believe it to be true, the primary cause of the flux is SPECULATION. There’s no way of predicting what will happen and its effects until after the fact, when the results are in.”

— Paul Siegel
GoPro Construction Solutions 

Dam hecklers

When Home Depot CEO Frank Blake was explaining a housing market metric to shareholders during the company's annual meeting last week, hecklers interrupted. Their issue? A dam project in Chile.

Blake handled it smoothly. "So before we get to the rivers of Chile, we'll go back to the U.S. housing market," he said. The protestors succeeded in bringing the subject to light, but Home Depot was quick to respond with a statement and a video. Here are what readers -- including Home Depot's sustainability lead Ron Jarvis -- told us:

“The facts are that we would have to study hydro dams to see if they are a bad thing. If we determine that they are and do what the non-government organizations (NGOs) want, then we would set a precedent that we will not deal with any company with ties to the building and ownership of the companies that build the dams. There are over 2,000 hydro dams in the United States alone. I would assume that there is a tremendous amount of overlap in interest.

“If the wood from the dam was being cut for the Home Depot, or if the energy generated was coming to an HD store, we would at least be at the table to listen to the issues. But our wood purchases are endorsed form the Chilean NGO’s and are 1,000 miles away from this project.”

— Ron Jarvis
Senior VP pro business, tool rental & environmental innovation
Home Depot 

“I believe that Home Depot has opened themselves up for this anti-capitalist assault by trying to mollify environmentalists in the past. Accepting these organizations at face value and failing to understand their anti-human, anti-capitalism, anti-globalization agendas makes the Depot a hostage to their insatiable demands.

“This is why our industry should be unified in refusing to buy into the entire Green agenda. Why should any wood product need to be ‘certified’?  Is it my job to make sure that the loggers have day care or disability insurance? We need to stand up to these demagogues.”

— Seth N. Arluck
New Hampton Lumber
New Hampton, N.Y. 

“The Home Depot is no different than the other big-box stores in that there are always people trying to make these companies into more socially responsible companies.

“The truth of the matter is that these companies provide excellent benefits and provide jobs for a lot of people. It reminds me of the small yappy dogs barking and antagonizing the large dogs to show they can be tough. In reality, the large dog usually ignores these little dogs to keep from getting in a fight and hurting them.

“These large companies also work a lot with charities and are responsible corporate entities that are looking for more cost-efficient opportunities to improve the environment. They also have a responsibility to both the consumers seeking products and the investors that drive their expansion and growth. If they do not supply the customers with the products they desire, they will lose valuable market share and see lower earnings.”

— Richard 

“We should leave questions involving the welfare of Chilean citizens, including their power supplies, to them and to their government to resolve. Period.”

— Anonymous 

Indy 500 versus NASCAR

Of the 33 race cars in the Indianapolis 500, the editors counted three cars with prominent home channel sponsorships (not counting Target and Meier). In the Menards car, Ed Carpenter was 8th. And in ABC Supply-sponsored cars, A.J. Foyt IV and Vitor Meira finished 16th and 21st, respectively.

We asked: Why is NASCAR so much bigger than Indy Car when it comes to marketing of home products and building materials? Here's what we heard:

“In my opinion, one of the primary reasons of NASCAR having been more successful in attracting sponsors was when the open-wheeler side of racing fractured when the IRL was created. That rift led to less attendance and lower ratings, thus logically NASCAR was a benefactor. I'm sure there are several other reasons, but this one sticks out in my mind. Now that the rift is healed, it will be interesting to watch if things improve. Even the mighty NASCAR marketing juggernaut is feeling the pinch of the ‘recession.’ It would be safe to say that sponsors of all racing series worldwide are under the microscopes of accountants and boards.”

— Jim Fulmore
LBM Coordinator – Atlantic
Home Hardware Stores 

“I think that the recent turmoil of the whole CART/IRL split, bankruptcy and merger has pushed its fan base away. But, the real attraction to NASCAR is more simple -- from a fan’s perspective the drivers are just good ole’ boys like the rest of us. They don’t have some elite status like Formula One drivers, which CART/IRL has tried to emulate to a degree. This has created a much larger fan base for the sport. Larger fan base equals better TV coverage. Better TV coverage equals better sponsorship. The basic shape and size of the cars allows for a bigger rolling billboard for the sponsor of NASCAR as well.”

— Patrick O'Neil
Area manager
NY Outlying Stores
Stock Building Supply 

“I think NASCAR is the average man's sport, and Indy car has always been the wealthy man's sport. Average people work on their own homes and shop at and support the Menards, Meijer, Target, Lowe's and Home Depots of this country. Wealthy do not. It is as simple as that.”

— Kate Semer
Winzeler Stamping Co. 

“NASCAR is a sport started by the good old boys. The Indy races are a rich man's race. There are more good old boys in the building industry than rich men."

— Fred Earp 

“NASCAR has more races in bigger markets, and the cars are big enough to see what is being promoted. I watch Indy, and I cannot tell what a car is promoting. I only recognize the color. Even when they are stopped in the pits, many are hard to read. Everybody loves to watch Danica Patrick, but can you read her sponsors? From the front or rear (of the car) you can’t read anything.”

— Greg Hartmann 

Famous customer department 

The visit of President George W. Bush to Elliott's Hardware in Dallas earlier this year prompted us to ask: Who's your most famous customer? Here's what we heard:

"Twenty-two years ago I started a True Value Hardware store from scratch. A customer came in and asked if he could put a few items in an open space close to the front of the store. He got a garbage can and began to fill it with power drills, sanders, saws and miscellaneous other items. It totaled more than $500.

“Back then, $500 was a good Saturday. When he was done he presented a credit card, which we ran through the embosser. He asked if we could deliver it to the nearby airport. On Monday we discussed the transaction, and our receiving clerk asked to look at the slip. It was Gene Hackman's. A few weeks later he came in at closing and as he left, we locked the door. A few minutes later while in the office finishing for the day we hear the front door rattling. We go to investigate, and it was Gene Hackman wanting a ride because he had locked the keys inside his car. Needless to say we gave him a ride over to the airport where he was assembling a kit airplane. His car was gone the next morning.”

— Dave Belcher
Lake Stevens True Value
Lake Stevens, Wash. 

"Steven Tyler of Aerosmith. He spends summers in Sunapee, N.H., near here."

— Robert Seavey
LaValley Building Supply
Newport, N.H. 

"When I was an owner of Narrowsburg Lumber Co, and managed our Honesdale, Pa., store, Art Wall (a local boy) had won the Masters Tournament in Augusta, Ga. I sold him some caulking for his home. Since then, I have moved twice out of state and now own a home next to where Art lived, here in Honesdale. Our springer spaniel still finds some of Art's old golf balls, which he has hit into the woods whenever he was home.” 

— Thomas Barnes 

[Editor's note: When Barnes was asked if he ever had a Tiger Woods sighting, he responded: "Who?"]

Stock's glory days 

With the news of U.K.-based Wolseley's announced spin-off of Stock Building Supply, we asked our readers if Stock can return to its glory days -- a question that could be asked about a lot of companies in these turbulent times.

Back in 1998, Stock Building Supply (then known as Carolina Holdings) was the Home Channel News Pro Dealer of the Year. Last week, the pro dealer's U.K.-based parent company Wolseley announced plans to spin off Stock into a joint venture with a Los Angeles-based private equity firm, The Gores Group.

We asked if Stock could return to its glory days. Here are some thoughts from our readers:

“Can Stock return to its glory days? Good question. However the better question may be, ‘Can the old business model work in today's environment?’

“Our industry has seen an incredible evolution over the past 30 years. When I started out with Grossman's (rhe northeast predecessor to big boxes), roughly 28 years ago there were two primary types of lumber and building material companies. Line lumberyards were the primary supplier to the home builder. Most were locally based, independently owned and relied on their membership in buying co-ops to optimize purchasing power. The other business type was the ‘home center.’ In the Northeast alone there was Grossmans, Channel, Rickles, Pergament, Lloyds, Hechinger, 84 Lumber, Builders Square and a few others. They catered to the do-it-yourselfer, small remodeler and local business accounts. None genuinely exists today.

“Sometime in the 1980s, lumberyards decided to go after the higher margin home center type hardware items to round out the hard core daily commodities. The general logic was to offset the low margin commodities by offering everything from locksets to garden hoses. I watched (I was a distributor salesman at that time) as many of these independent lumber companies saw this as an opportunity to sell more lumber ‘even cheaper.’ Well, why not? They may not have been covering their expenses, but at least they were selling a lot, and the hardware items would surely offset the poor commodity margins.

“Meanwhile, home centers were concerned about their somewhat limited customer base. Many of them established ‘Pro’ desks and contractor divisions to try and pry away some builder business from those uppity lumberyards. The problem there was, they possessed neither the expertise nor the equipment to make any major impact on those customers. As a result, many lost their focus; the economy turned sour; the Home Depots and Lowe's were cutting their teeth in many new markets; and if memory serves me correctly, with the exception of 84 Lumber, they're all gone today.

“I could go on forever, but I'll answer the question. Building material companies need to identify who they are and what they want to be. The temptation to chase unprofitable volume has been and always will be there. It generally results in a profit death spiral and cessation of operations. The companies that survive today and prosper tomorrow can't use the old models. Customers are vastly more educated on what they want and what they're willing to pay. Clear focus on customer type, quality products, superior customer service and profitable sales will separate the winners from the losers.

“Can Stock return to its glory days? They need to come out of their current situation with a new model. If the old one worked, we wouldn't be discussing it.”

— Rick Pallotti
Kamco Supply of New England

“Absolutely we can and will. It may take a little time due to the current economy, but look for Stock Building Supply to be at the top again.”

— JoAnn Sabater
Customer service coordinator
Stock Building Supply

“My question: Can any of us return to our glory days?

“I pray that the markets will return to some semblance of the good-ole-days so that returning to our ‘glory days’ is at least a possibility, but the answer to that question is still up in the air. For now, I would rather see a return of the general population and the lending industry to old-fashioned common sense so that we can rebuild on a solid foundation. After that, let the survivors return to good-natured competition, and may the best man win.”

— Anonymous

“As we all know, bigger is not always better, especially in our current market. If Stock can effectively get smaller and leaner, they have a shot. Once the market reverses itself, they can grow again, but only under a controlled situation.”

— Geoff Huguely
Galliher & Huguely Associates

“Stock’s recovery isn’t likely in the near future with almost a total builder-customer-base dependent on new housing starts currently at 400,000 to 500,000 at best this year. Somebody will have to be patient with this group until the housing market turns around in 2010 or 2011. That’s a lot of overhead to carry with 300-plus yards eating hay every day.”

— Roger Slonaker
Michigan PreStain

“I typically do not comment on the status of my competition, however I find it necessary to opinionate on what has brought this goliath down, although it should be obvious to any industry veteran.

“The ‘Glory Days’ you refer to at Stock were created in the then-furious paced climate of our industry by a bottom-feeder gross margin mentality. They entered areas and systematically bought market share by reducing margins.

“No dealer will survive this current climate, much less return to glory, if they are not putting enough margin on the bottom line and simultaneously adjusting expenses as the market dictates.”

— Joseph C. Yursik
Sales manager
Ridgefield Supply Co.

“ ‘Returning to glory’ will take a number of factors, working in concert, to accomplish:

“1. People. The most important factor, and they don't necessarily have to come from within the LBM industry (sometimes from the outside is even better, as no long-term positions and thinking are entrenched and difficult to shake off). Good quality people will quickly grasp what’s right and necessary. Lots of turnarounds have been done from persons not involved in the particular industry, previously.

“2. Time. So if they’re seeking a turnaround or profits quickly or in the short run -- forget about it! I believe NOW is excellent timing, so when the turnaround takes place, they will be positioned to take advantage of it. Numbers should not be the basis for all decisions -- marketing and merchandising, and in the future, real estate, are primary.

“3. Patience. There simply are no shortcuts.”

— Paul Siegel
VP sales
GoPro Construction Solutions

The evolution of distribution 

Weyerhaeuser posted a $264 million first-quarter loss, and company executives said they were “evaluating all elements of [Weyerhaeuser’s] portfolio” -- including its iLevel division and its internal distribution model. We asked our readers for their thoughts on Weyerhaeuser's go-to-market strategy.

Here's what they said ...

“It's been said time and time again, that timing is everything. No words spoken could be more true than those when it comes to the iLevel by Weyerhaeuser concept. The first time I remember hearing about the iLevel concept was in late 2002, and had they rolled the program out there and then, it would have been a tremendous advantage for the Weyerhaeuser company. At the time they were making a large number of different forest and building material products. Selling those products that they solely made would have been a boom to them and the builders they wanted to service. Unfortunately, their timing was off and they rolled out the program just as the housing boom was turning to a bust.

“I certainly miss the old Weyerhaeuser distribution company, but like much of today's world, things are changing, and realistically there is no turning the clock back.”

— Joe Glitman
National forest and panel products purchasing manager
Allied Building Products Corporation

“What an interesting passing of ships! In the "good old days" (think 1970s to 1980s) Georgia-Pacific and Weyerhaeuser competed mightily against one another. It was the Coke versus Pepsi rivalry of building products. There were many competitive levels: top-line revenue, number of SKUs carried, number of warehouses -- the list goes on and on. Employees on both sides woke up in the morning to beat each other up in the marketplace. It was American capitalism at its best.

“In the first part of this decade, the two companies have continued their rivalry and, not wanting to be outmaneuvered, both have significantly reduced their role in the building products distribution. Georgia-Pacific spun off its distribution arm in 2004 to form BlueLinx, and Weyerhaeuser has been cutting back on the number of company-owned DCs (actually since the 1990s) and relying more on third-party firms to handle the distribution of their products.

“And now the two forest product giants are at it again. This time, though, it’s not about copying each other. This time they are planning to go down separate paths to settle their struggle for market supremacy. Georgia-Pacific recently paid BlueLinx almost $19 million to end their cozy structural panels distribution agreement so they can use more third-party firms to move their production. Now Weyerhaeuser is considering stepping up internal distribution of their products. Hmmmmm …

“Since this is playoff season, each of us is forced to pick a winner of this Game 7. My bet goes with Georgia-Pacific since their plan, on the surface, requires less capital. But if Big W has a plan to simplify the supply chain as part of their return to product distribution, I might change my bet.”

— Rod MacKenzie

“Weyerhaeuser's approach to sales has long baffled customers as well as its own sales staff. After decades of making sound investments in material development and sales, the company began new techniques that seemed to change frequently. It was if they were following the economic model of the moment. As these new directions from the top took place, customer needs seemed to become secondary to successfully carrying out the new economic model. Indeed, there were times when customers had to meet certain parameters in their buying habits to qualify for a place in line. When disaffected and some longtime customers went elsewhere, it seemed to have little or no affect on Weyerhaeuser's top management.

“Currently, as it was before, trench-line sales staff is hamstrung to create business that does not follow the suggested program made at the top. Henceforth, if sales deteriorate, management believes there must be another angle to review and a new model to create. This is nothing new. Lumber companies have always strived to find new paths or muscle into a current path to the customer.

“It has been said that Weyerhaeuser's tree production alone dwarfs its lumber production and distribution business, and it has long been discussed that the best path for Weyerhaeuser is to divest itself of all its pieces so that independently they might have an opportunity to grow. Maybe Weyerhaeuser is like Chase Bank today. Just too big!”

— Bill Parks

“I think the idea that they will sell only lumberyards direct from their mills, and not office wholesalers, has left them in a situation where they deny themselves additional customers to sell to. It was a great strategy when housing starts were 2 million, but now they are left trying to get those better margins out of customers who don’t need their wood."

— Larry Landis
Norman Lumber

“They have never been able to figure out how to do a transfer-pricing schedule that their operators at the mill and distribution levels would sign on to. They have such an ingrained individual unit profitability mentality that I wonder if they can ever get a transfer pricing system which would maximize corporate performance in place.”

— Harry Fishleigh
Mentor, Ohio

“I think the way Weyerhaeuser goes to market is the right way. However, I might be a bit prejudiced!”

— C.J. Roberts
Structural frame specialist
iLevel by Weyerhaeuser

Arlen Specter shakes up the Senate

What do 84 Lumber, PPG Industries, Wolf Organization, Lezzer Lumber and O.C. Cluss have in common? They are all based in the commonwealth of Pennsylvania, where Senator Arlen Specter crossed the aisle to the Democratic party.

As the Senate stands precariously close to a 60-40 party line split, with 60 votes needed to override a Republican Party filibuster, the move has generated considerable attention. We asked readers for their thoughts on Specter's political bombshell and its impact on the home channel? Here are some of the responses.

“I remember when Arlen Specter was a Democrat way back when. He wanted to run for Philadelphia district attorney as a Democrat in the 1960s but the powers that be didn't endorse him so he switched to the Republican ticket and got elected. So his most recent switch is just going back home.”

— Anthony J. DeCarlo
President and CEO
LMC

“I personally don’t see it having any significant impact on the industry. It may seem significant in the halls of Congress, but I don’t think it really is.

“From the information I have gathered over the week, Senator Specter’s move does not indicate a shift in political ideals; it was merely a survival move. Senator Specter is up for reelection in 2010. As his staff evaluated the political mood of the electorate in Pennsylvania they determined that even such a longtime incumbent would have little chance of reelection as long as they had an (R) after their name on the ballet. Therefore it is nothing but a jump from a losing team to a winning team for a better shot at winning reelection. It’s all about keeping your job.”

— Kent Pearson

“Not that it should be wrong to switch parties, I just think you should resign and have the Governor name a same-party person to fill the remainder of the term. Then the defector can run as whatever party they defected to. But the folks that elected Specter are getting screwed; they elected a Republican and should have one until the end of the term, then Specter can run in his new party.”

— Bill Mitchell
University Electric

“I do not believe that an elected official should be allowed to switch their party affiliation without having a special election in their state or city. This was done by Mr. Specter to save his own political career after he discovered he was behind in the primary voting. He was at best a Moderate Republican with a noticeable tilt to the left. I will not miss him in the party and am glad he is finally showing his true colors. The down side to this is of course the shift in the balance of power. This concerns me greatly. Where is the conservative movement in this country?”

— Bob Gengler
Contractor sales manager
Knecht Home Center Rapid City

“Arlen Specter provides an example of the worst characteristics of many of our politicians. He has nothing but his own interests at heart. We can only hope that he is defeated as a Democrat next year, and a Republican with a measure of integrity can replace him.”

— Buddy Klumb, CEO
Klumb Lumber
Fairhope, Ala.

“As Specter is a career politician, I question his integrity from the start. I don't believe anyone is truly service-minded if they make a career out of politics.

“As for its impact on the building industry, it depends on his motives for the change. I don't believe it will be a good thing. The Congress and Senate haven't done anything to substantially help the industry, our economy or the country for that matter.”

— Don Neff

“Sixty seats do not imply 60 votes. A number of conservative and moderate democrats are getting weary of the Obama agenda, especially as it relates to the growing deficit spending, the skyrocketing national debt and the increased tax liability for future generations.”

— Evert J. Dykhuis
Luvipol Doors

“Bring on term limits and have him pay for benefits like the rest of us.”

— Gary Kochinsky

“We can only hope that he loses reelection next year as a Democrat, and we will do whatever it takes in Central Pennsylvania to make this happen.”

— David M. Lezzer, VP
Lezzer Lumber

“At 60-40, the Democrats can push the Employee Free Choice Act, which allows a union to get in without a secret ballot. That is disastrous for almost everyone who employs over 10 people. It is also a disaster for the vendors who supply the home center industry causing costs to spike and risking potential work stoppages.”

— Terry W. Abels
Chelsea Building Products

Pennsylvania hardware store shutters after 99 years

Sad to read about a store closing after 99 years but cannot accept the excuse. “Anyone” can compete with a big-box store. That does not mean it is easy. It means it can be done.

- Nick

Dream Ace winner comments on liquidation 

The failure of the Dream Ace store is no surprise to me. The comment about the cost of the lease on the building was unrealistic for the store. I also am curious how much experience the man had in the hardware and building materials industry. There is also a concern about a person from Oregon moving to another location such as Houston. If we look at the economic downturn and see the number of closings, that was also a large factor as well. Older established businesses have been forced to close, and newer businesses are getting hit hard as well. Years ago, when Lowe's went to Connecticut with the first store, the company had poor market research on the product selections in New England compared to the other regions, and several assortments had to be redeveloped in a new store rather quickly to meet demand, some even before grand opening. The supply problems became evident, and sales hurt because of the mounting problems. Lastly, the lack of sufficient training of new employees caused the store to do much worse than expected. Still, the store suffered but eventually helped the company opening the next two stores before the problems were actually fixed.

- Richard

Don't kill sales

Every market and every economy present unique challenges. The things listed below will hurt sales, and profit in any economy, or market. Their effect however will be magnified in a down economy or an economy in recession.

1. Frequently change the management in the store, district, region or company. Changing management in one particular store is more dramatic than in larger organizations, but the effects are the same. The employees are left with no sense of direction, focus or security. This means that even the best employees become less effective, stocking takes longer, floor maintenance deteriorates and customer focus ceases to exist, leading to lower sales. Additionally, every time management changes, a certain percentage of employees leave. Frequent changes increase that percentage of employee departure. Fewer trained employees means lower customer service levels meaning even more lost sales.

2. Add new programs without removing or replacing old programs. The effect of this is to take employee’s focus OFF OF THE CUSTOMER by creating more tasks for them to do. In theory, programs are [meant] to make customer service and sales better, however, by simply adding new programs on top of old, employees have more things taking attention away from talking to, understanding and helping the customer. If a new program is needed it is because an old program is failing or ineffective. Therefore, eliminate the old at the time you institute the new.

3. Reduce maintenance of store equipment and or fixtures. When employees and customers see deteriorating conditions within the store the rumors of the store closing are given a false credibility. Employees start jumping ship thinking their jobs will be gone soon anyway. Customers start demanding deeper and deeper discounts. Sales may not be dropping fast, but profits go away.

4. Reduce the number of employees or the number of hours employees are allowed to work. While labor is the second largest expense in retail, cutting it beyond a certain level is counterproductive. The employees left are still required to do the same amount of fixed tasks such as cleaning, filing reports, building displays. Meaning again less focus on customers and lower sales.

5. Reduce the dollar value and or percentage of raises for employees. If a company is experiencing economic difficulty, rest assured employees are feeling it as well. Reducing wage increases will force employees to obtain second jobs at best, to leave entirely at worst. As stated above, this can have a devastating effect on customer service and sales.

I have been in retail management at the store level for over 20 years. I’ve worked in a variety of retail channels and with customers ranging from upper-middle class to extreme poverty. I’ve seen companies that were struggling take the above actions in failed attempts to save themselves. I have also witnessed companies that were doing well resort to those same actions when the economy hit rough spots. With the current recession, I’m seeing the above actions taken to the extreme by retailers who have good balance sheets. Companies who as recently as 1.5 fiscal years ago were considered leaders and good investment vehicles are now making the same mistakes as companies who failed while doing the same “cost saving measures.”

- Michael N. Jesperson

Housing rescue and positive thinking 

Similar to many others that you have heard from, I am loath to bail out bad business choices. And I do believe that is what occurred in the run up of our housing industry. Many got caught up in the "greed factor" and made choices based upon unstable premises. So, let them deal with their issues.

But I do think the issue is much more complex than what was stated above, and taking the "castor oil" path may lead to much more serious illnesses. We have a crisis of confidence across the board with the housing industry, mortgage lenders and the financial markets in general. And not to tailor some type of remedial program may lead to further collapse, which is not a good thing for any of us, whatever industry we happen to be in.

Thus, we need sober thinkers to quickly develop both short-term and long-term solutions. Let's ensure that these solutions are bipartisan and do not become empty political rhetoric and promise. At the end of the day none of us are better off with foreclosure and empty domiciles. There must be a better way. It seems absolutely ludicrous to me to foreclose with no chance of a future sale and the resultant push of a family to the street and the negative impact felt in property value in the locale. Rather, let's work out a process to shore up the homeowner even if it becomes a "rent to re-own" solution that tries to make win-win situations out of this debacle. It will take serious thought with real answers, but it can be done.

Remember, that we are Americans and we are positive thinkers. Together we can and must forge positive answers.

- Dan McDevitt, Home Depot manager

Click here  to read the full story.

Eco-labeling should be sensible 

I'm of the opinion that the Pro dealers 'rallying behind the Eco-Label concept' are finally on to something sensible in what can only be called the mania of green building, particularly as it pertains to softwood lumber use. The LEED standard, for example, could not be more ridiculous when it specifies only FSC-certified lumber when there is practically zero FSC certified softwood lumber produced in the South. My contention is that the softwood forests of the United States are, as a whole, sustainable forests (with the exception of the screwed up National Forests, thanks to the environmentalists). This is certainly true statistically as well as intuitively. No one holding an investment in timberland is going to cut themselves out of business. That the FSC folks are not behind this is no surprise. FSC certification has been an environmentalist-driven enterprise from the very beginning, and the SFI, initiated by the AF with its large timberland owner members, has just been trying to play catch-up. I've been a small timberland owner in the South (185 acres) for 60 years and have more standing timber now than when I started. That's sustainable to me, and I don't need 'certification' to prove it. Good luck to the dealers in trying to bring some common sense into this mess.

- Buddy Klumb, CEO, Klumb Lumber Company, Point Clear, Ala. 

Click here to read the full story.

Be wary of Housing Rescue Act 

My opinion is that any society that is free to succeed, but is not free to fail, is not free at all.  This act spells socialism with a capital S.  The people who are footing the bill for this bailout had no say-so in the matter so it really boils down to illegal government confiscation of private wealth.

- Wesley Davis,  Builders FirstSource 

Click here  to read the full story.

Ace LBM strategy a complicated affair 

I spent 11+ years working at Ace in the LBM department. I started as a building materials trader in corporate, and ended up overseeing the forest products team from a regional office when I chose to leave after the Ace/BMA debacle. I think I have a good level of understanding of what's happened over the years. The reason I write now is there were so many good people involved when Ace had the department rolling forward with great strides up to the 'merger' w/BMA. Kent's comments, as usual, are right on. Ace has gutted the department so it's currently ineffective in it's ability to service these tremendous LBM retailers. Which is sad to them and the many of current and past employees that worked so hard for these lumber dealers over the years to see them succeed. The reality of it was Ace had to cater to the strength of it's base, the hardware guys. The LBM guys were a minority, and they knew it. They didn't like it, but when it came down to brass tacks, Ace was going to have the best interests of its core at the front of the line. The feeling/message the LBM staff had was do whatever you need to keep these guys pacified/feeling like corporate cares more than they really do, so we can sell them the hardlines (Nails/power Tools/Water Heaters/Ace Paint) we need to keep our wholesale sales up. But, for gosh sakes don't take any risks on large block buys. What happened as the sales grew to well over $600 million remains a mystery to many folks. The staff and many retailers felt Ace would be the acquirer, and not the acquiree. The 'merger' turned out to be the nail in the coffin vs. the next step upwards. The mixing of the cultures (Co-op Wholesale) proved to be like mixing oil and water and the whole thing deteriorated. You could not get people trained over many years to serve all dealers, at little to nil margins (to cover expenses) into a culture of serving only customers where it made cents ... er ... sense. The downward spiral was set in place and never recovered. When the 'merger' split up in 2002 or so, Ace corporate had the opportunity to gear it back up, and had people, retailers and suppliers ready to jump back in. however, they chose not do so, and had set out to carefully crawl back into the wholes ale markets where it complimented their warehouse programs and had no risk. Not exactly what the lumberyards needed. So, in closing, I can see how the Ace LBM customer feels abandoned, and how the many folks involved feel let down or sad, by this downward spiral. However, it makes sense to Ace corporate. The period from 1989 up to August 1999 was a fantastic ride and many of those involved will always cherish it and wonder why it had to stop – Ace was The Place to be for LBM back then!

- John Neubauer, former Ace LBM corporate manager and Ace employee from 1989-2005 

Click here  to read the story.