Dealing with the Slowdown Not long ago, contractors were happily complaining about how much work they had in the backlog. Wasn’t it only yesterday that you had to say “no” to potential customers as you searched the country for qualified employees? Are you remembering the “good old days?” Maybe it’s a little too soon to get nostalgic, but many people in the construction industry are asking themselves why they didn’t see the slowdown coming. While the bears and bulls are still arguing over the words, “downturn,” “recession,” or “correction,” for the first time in a long time, you may be thinking about “downsizing,” “rightsizing,” or “layoffs.” On the other hand, although the picture in the news looks bleak, all economics, like politics, are local. Some companies are still enjoying increasing backlogs. Whatever your current backlog, you have probably started to look for your “Plan B.” You have to ask yourself: q Is this just a temporary downturn or the long-term variety?q Do we have a layoff plan in place? q How will we determine who and where to cut? q Should we keep long-term veterans or rising stars? q Is a decision to lay off workers all bad, or will we get rid of our marginal performers? Even if you haven’t considered these contingencies in your strategic planning, this isn’t the time to throw your plans into the recycle bin. Instead, update your plans quarterly. Our economy is changing faster than ever before. It could rapidly improve or worsen. A senior management team that frequently updates its plans will have a better chance of being in sync with the economy and in position for long-term success. Continue to strategize about which markets will be strong in a down economy. Where can you best apply your core competencies? While technology markets may be down, other markets such as natural gas and power may be up. Maybe it’s time to look at public markets again. Several public markets are now utilizing design-build processes, which are a far cry from the adversarial hard-bid process popular in the 1970s and 1980s. It’s a knee-jerk reaction to cutback on marketing and business development personnel in a downturn. Instead, it might be time to work them harder, change their focus, or realign the department. In FMI’s Construction Outlook: Second Quarter 2001 Report, FMI’s economists report on the slowdown in the general economy and in many sectors of the construction industry. However, the term “slowdown’ in most cases means a slowing from the rapid rate of growth seen in recent years. For instance, the need to improve educational facilities that we are constantly hearing about in the news translated to 18% growth in 2000, or $5.8 billion. Though the growth rate is predicted to slow to 12% in 2001, that still represents an additional $4.8 billion invested in schools. Add to that a projected $1.9 billion growth in improvements to existing schools, and there is sure to be room for a company seeking new markets or continued growth in an existing market. In areas such as private office and professional businesses, the Outlook has mixed projections. Decreasing occupancy rates in the city may be offset by growth in the suburbs. It is always a good marketing strategy to pay attention to where your customers are going and try to be there when they are ready to build. Getting your company in sync with the economy means looking beyond the headline hype and digging deeper for the information you need to make informed decisions about your company’s future. Although FMI’s economists project continued growth in construction put-in-place for the next several years, the rate of growth will slow. Therefore, competition will intensify. So you need to learn the details of the economic picture that will help you outperform your competitors. Which owners will be the most active? Geographically, where are the next growth hot spots? What hot niches could you target? If your current customers are putting a hold on future building plans, are there other markets you can serve until your traditional market improves? Are there markets you overlooked in the recent construction boom? Recently, I have often heard, “We are too busy to really ask our people to standardize processes.” Use this time to improve your processes and standardize your best practices. Loose operating processes are the death knell for general contractors in a price-sensitive market. Some money spent to develop and train employees on standardizing processes will put your company in a position to thrive in adversity. As you consider such alternatives as “rightsizing,” some of your managers may have to become “doers” again, and you will need to rethink your hiring goals. But you still need to keep recruiting the best students possible. It may be that you hire fewer than you did last year, but hiring some will better position you with up-and-coming talent when the economy rebounds. It requires a little more creativity to survive a downturn. That means not doing everything you have always done the way you have always done it. It may mean involving owners and labor in your strategic planning. It may mean shaking a few cobwebs out of the system. In the end, creative contractors will find opportunities that will leave them better adapted for whatever change the next turn in the economy will bring. FMI Management Letter September 2001
SMRCA Office
Receives a Christmas Card
The SMRCA will be exhibiting at the Michigan Plant Engineering and Maintenance Show again this year. This is a two-day show, which is scheduled for March 20-21, 2002. The trade show will be held at the Novi Expo Center. The hours for the trade show will be from 9:00 AM to 3:00 PM. SMRCA to Exhibit at BOMA Trade ShowThe SMRCA will be exhibiting for the first time at the BOMA (Building Owners and Managers Association) show, which is scheduled for February 7, 2002. The show will be held at the Southfield Municipal Center. The trade show hours will be from 2:00 PM to 6:00 PM. SMRCA Staff to Investigate Health Insurance for AssociationHealth insurance costs are constantly rising, that is why the SMRCA staff is currently working on a survey to send to our membership regarding health insurance coverage for office personnel. You should be receiving this survey within the next few weeks. Upon receipt, please fill out the form and return to the SMRCA office. We will keep you updated on our progress.
Great Lakes Regional Roofing (GLRR) Trade Show
There are five seminars scheduled for the 2002 trade show. They are listed as follows: Bursi Seminar presented by Johns Manville from 8:30—Noon; Roof Asset Management presented by NTH Consultants, Ltd. from 1:00 PM—1:45 PM; Fall Protection presented by National Ladder & Scaffold from 2:00 PM—2:45 PM; Center for the Advancement of Roofing Excellence (CARE) presented by GAF Materials Corporation from 3:00 PM—3:45 PM; Green Roofs presented by Siplast Roof Systems from 4:00 PM—4:45 PM.Booths are still available. MiRCA Associate member cost is $580.00. Non-members of the MiRCA Association are encouraged to exhibit as well. Booth cost is $630.00. New this year, advertising in the exhibitor directory is available for exhibitors at the GLRR Trade Show. $50.00 for a half page ad (4 1/4 x 5 7/16) and $100.00 for a full page ad (5 7/16 x 8 1/2).A listing of all SMRCA member contractors will be included in the exhibitor directory. After all, this trade show is a tool that is used not only to promote the exhibitors but also to promote the SMRCA member contractors as well. The exhibitor directory is handed out to all attendees of the GLRR Trade Show. Our target market for the trade show attendees are architects, building owners and managers, plant engineers, roofing contractors, amongst others. For further information please contact the SMRCA office: Phone: (586) 759-2140 Heather, Stacey and I would like to thank the other members of the GLRR Trade Show. They have volunteered endless hours of their time to help make the GLRR Trade Show a success. They are listed as follows: Sue BaumbergerJohns Manville Jason Emery LaDuke Roofing & Sheet Metal Mike Grewette Schreiber Corporation Mike Mass Koppers Industries, Inc. Larry Rowe National Ladder & Scaffold Company Steve Yontz Bradco Supply Corporation Welcome Please join us in welcoming a new employee at the SMRCA office. Her name is Stacey Wright. Stacey started working at the SMRCA office in September 2001. Stacey brings with her a wealth of knowledge. Stacey is responsible for various jobs at the office. In the short period of time that she has been with us, she has become a very important part of our “team”. Schedule of Events January 17-18, 2002—Chicago Roofing Contractors Association’s “Convention and Trade Show,” Drury Lane, Oakbrook Terrace, IL l 708/449-3340 February 6 & 7, 2002—CAM Expo 2002, Pontiac, MI l 248/972-1000 February 7, 2002—BOMA Trade Show, Southfield, MI l 248/848-3714 February 10-13, 2002—“NRCA Annual Convention and Exhibit,” San Antonio, TX l 800/323-9545 March 14, 2002—Great Lakes Regional Roofing Trade Show (GLRR), Livonia, MI. Sponsored by the Southeastern Michigan Roofing Contractors Association (SMRCA) l 586/759-2140 March 20-21, 2002—Michigan Plant Engineering and Maintenance Show, Novi, MI. (Edward Sawyer) l 800/942-9787
On behalf of Bob Drogosch, the JAC full-time instructor, and the JAC Committee members we would like to extend our sincere thanks to all individuals and/or companies who continue to support the Apprentice School. Donations for the JAC Training Center are still being accepted. The JAC Committee would like to thank all contributors that have donated money, materials or who have volunteered their valuable time to this worthwhile cause. Bob Drogosch would like to thank Mr. Claude Garrett of Christen Detroit and Mr. Dean Kepler of Johns Manville for volunteering their time and knowledge; they presented a demonstration on heat welding to the Apprentice level three and four students. Happy Birthday! Happy Belated Birthday to...Jeff Hanson JKM Roofing, Inc. November 9 George Schena Schena Roofing & Sheet Metal Co., Inc. November 13 Sue Whitty Milbrand Roofing Company December 1 And a Happy Birthday to… Dan Casey T.F. Beck Roofing Company January 7 Special Thanks We would like to thank Hertz Equipment Rental for contributing prizes to the 2001 SMRCA Golf Outing. Our apologies as they were not listed in the previous Roving Roofer as a contributor. Coming Soon Three new Spanish videos have been added to the SMRCA video library: Introduction to Safety To view any of these videos please contact the SMRCA office at (586) 759-2140. JKM Roofing ExpandsRecently, JKM Roofing opened a new branch sales office located at: 2187 Avon Industrial Drive JKM Roofing will still maintain their office in Detroit. SMRCA Office Holiday Hours Please note: The SMRCA office will be closed on Monday, December 24; Tuesday, December 25; Monday, December 31; and Tuesday, January 1.Heather, Stacey and I would like to wish you a healthy, peaceful, and joyous holiday season! Christmas Trivia and More!DID YOU
KNOW… The most important single source for our modern day version of Santa Claus comes from the Christmas poem A Visit From St. Nicholas by Clement C. Moore. Written for his children in 1823. Thomas Nast, a well known and respected painter, was the very first person to paint the first definitive portrait of our present day Santa Claus in 1870. Thomas found inspiration from Clement C. Moore’s world famous poem. TIPS FOR STRESS-FREE SHOPPING Make a list of who you need to buy presents for and from which stores. Shop by mail or computer. Stock up on basic items — wrapping paper, ribbon, tape, cards, and tags. Buy gifts at stores with a 100% refund or exchange policy. Check your merchandise and sales slips before leaving the store. Save all receipts from holiday purchases in an envelope.
NRAC's November "10@10" Henshaw Speaks to U.S. Chamber Subcommittee: On October 17, DOL Assistant Secretary for OSHA, John Henshaw, spoke to the U.S. Chamber of Commerce’s Labor Relations Committee’s Occupational Safety and Health Subcommittee, chaired by NRCA’s Craig Brightup. During his talk, Henshaw discussed his priorities, including more emphasis on partnerships and education. Henshaw encouraged the group to keep in contact with him on any issues of concern. Henshaw’s Swearing in Ceremony: On October 26, NRCA’s Craig Brightup and Jennifer Criscuolo attended the swearing in ceremony for DOL Assistant Secretary for OSHA, John Henshaw. This event was well attended by many in the business community to formally welcome the new head of OSHA. Secretary Chao and Sen. Kit Bond (R-MO) praised him prior to formally swearing him in. Subcommittee Hears Testimony on OSHA Consensus Rulemaking Process: On November 2, the House Education & Workforce subcommittee on Workforce Protections, chaired by Rep. Charlie Norwood (R-GA), held a hearing on the role of third-party consensus standards organizations that provide technical information to OSHA. A witness clarified the problem when he stated, “Our greatest fear is that government agencies will continue down this dangerous path of unwittingly adopting recommendations of consensus organizations without first thoroughly examining the background of each issue.” We have seen this happen with OSHA in the past with the most recent incident being the ergonomics standard. NRCA will continue to monitor this issue. Record-keeping Update: As you should know, most of OSHA’s new record-keeping rule goes into effect January 1, 2002, except for two provisions that have been stayed by OSHA for further consideration until January 1, 2003 — hearing loss and, most importantly for the roofing industry, musculoskeletal disorders (MSDs). NRCA stated in our written comments to OSHA on September 4 and directly to Secretary Chao recently at a U.S. Chamber of Commerce event that OSHA’s reconsideration of what constitutes an MSD is tantamount to a rulemaking. We suggested that is should be subject to the Small Business Regulatory Enforcement Fairness Act (SBREFA), which, among other things, compels OSHA to set up small business panels to review the regulatory text as facilitated by the SBA’s Office of Advocacy. NRCA has already sent a letter to DOL’s Assistant Secretary for Policy and is working with the U.S. Chamber of Commerce to draft a letter to Secretary Chao that urges SBREFA be utilized in this situation. Economic Stimulus: As a member of the Tax Relief Coalition, NRCA supported the House’s $100 billion economic stimulus package to boost the economy after the Sept. 11 tragedy. President Bush has urged the Senate to move quickly with this important legislation but partisan gridlock currently prevails. The Senate floor debate on the Democratic-written $67 billion economic stimulus plan is scheduled for the week of November 12. Energy Legislation: Pressure is mounting to pass comprehensive energy legislation in the Senate. Senate republicans have promised to attach the Administration’s energy plan to every piece of legislation that comes before the Senate until the Senate leadership quits stalling. The labor unions have also called for a vote in the Senate. When the Senate does take up its version of energy legislation, NRCA’s staff will continue to promote, as it did for the House bill, a comprehensive approach as well as provisions impacting the roofing industry. Association Health Plans (AHPs): Patients’ rights legislation passed by the House and the Senate has been on a back burner since September 11, and it remains unclear whether conferees will be appointed anytime soon, if at all. However, recently there have been some discussions on the legislation between the White House and various Senate offices, primarily Senators Kennedy (D-MA) and McCain (R-MA). NRCA is working with organizations supporting AHPs, which is contained in the House bill, to once again step up our lobbying efforts. Skilled Workforce Enhancement Act: HR 877, the Skilled Workforce Enhancement Act (SWEA), now has 47 bipartisan cosponsors. This bill would allow small-business owners who train union or open-shop apprentices in a highly skilled trade, including roofing, a tax credit of $15,000 per employee per year for up to four years for qualified programs. The provisions of this bill are also included in the Small Employer Tax Relief Act of 2001 (HR 1037). NRCA is currently working to add cosponsors to this legislation.
Education Opportunities for year 2001 and beyond The Economic Growth and Tax Relief Reconciliation Act of 2001 (the “Act”) provided many new opportunities for saving for children’s education along with helping taxpayers with their own education. The following five items are a part of this Act which with the advice of qualified tax personnel, may greatly benefit taxpayers. These items include:1. Employer Provided Educational Assistance. Under prior law, an employer may deduct the cost of providing certain undergraduate education benefits to employees on a non-taxable basis if the employer has an Employer Provided Educational Assistance Program. The deductibility provision was scheduled to expire on December 31, 2001. The Act has permanently extended this benefit and also expands the program to include graduate education beginning in 2002. 2. Student Loan Interest Deduction. Taxpayers were able to deduct up to $2,500 of interest paid on qualified student loans if paid during the first 60 months when the interest payments are required. The new law repeals the 60-month limitation. The deduction is phased out once certain income limits are achieved. The Act increases the phase out ranges for both single and joint filers. 3. Higher Education Expenses. The Act now permits a new deduction for qualified higher education expenses. This deduction may be claimed even if a taxpayer does not itemize deductions. The deduction limit is $3,000 per year for calendar years 2002 — 2003. This amount increases in subsequent years and expires after 2005. 4. Education IRAs. Education IRAs have been in place for the past few years, but have not been widely used because of the $500 per child limitation. The Act has expanded the education IRA making it more beneficial by (i) increasing the contribution limit in 2002 to $2,000 per beneficiary; (ii) expanding the definition of the type of qualified education expense eligible for payment; and (iii) expanding the type of contribution accepted (corporations may now contribute to the IRAs). 5. College Saving Plans (Section 529 Plans). These Plans have been around for a few years and are state sponsored tuition programs that offer a taxpayer a tax favored way of funding qualified higher education expenses. Once amounts are transferred into an account, the earnings accumulate on a tax-deferred basis and are taxed to the beneficiary when the funds are distributed. Beginning in 2002, the programs are expanded by allowing distributions from the programs to be excluded from income if used exclusively for qualified higher education expenses. The designated beneficiary under the program is also expanded to include first cousins instead of immediate family members. Other technical changes have also been added to the program. The above are only a sampling of the many changes in the education area that have been affected by the Act. Employers should look at their employee benefit programs to determine whether it is appropriate to add one or more of these benefits for their workforce. Unemployment Insurance Newsn President Bush has signed into law the Economic Growth and Tax Relief Reconciliation Act of 2001. It reduces the voluntary withholding rate on unemployment benefits from 15 percent to 10 percent. Since 1997 states have been required to withhold federal income tax from payments of unemployment benefits when the individual so elects. The amount of federal income tax withheld from benefits stood at 15 percent since that time.n The new Economic Growth and Tax Relief Reconciliation Act adds graduate school education to the exclusion of employer-provided educational assistance from the Federal Unemployment Tax Act definition of wages. Employer-paid education expenses are excludable from the gross income and wages of an employee if provided under an educational assistance plan. The exclusion previously did not apply to graduate courses starting after June 30, 1996 or to undergraduate courses starting after December 31, 2001. The Act extends the exclusion to graduate courses and, effective December 31, 2001, makes the exclusion permanent for both undergraduate and graduate courses.n The UA will hold a public hearing on eight proposed administrative rules changes intended to give employers more flexibility in dealing with tax matters, establish new reporting requirements for businesses with large layoffs, and modify the conditions for which a claimant can receive a waiver of seeking work.Excerpts supplied by State of Michigan Unemployment Agency. The Monitor Unemployment Insurance News.
Upcoming Seminars RIEI Seminars The RIEI provides educational seminars that include cities from coast to coast. RIEI addresses a wide variety of seminar topics which are of interest to roofing contractors, consultants, specifiers, plant engineers, and anyone else with a professional interest in roofing design, construction and maintenance. Architectural and Low-slope Metal Roofing Systems January 15 - 16 Washington, D.C. Learn the benefits and deficiencies of metal roof systems. Know the differences between various metal roof systems. Learn the step-by-step installation process and what mistakes to look for during application. Understand how metal roofing may be a viable re-roofing option. Roofing Technology January 22 - 24 Washington, D.C. This is a necessary course for anyone who has roofing responsibilities. Discover the advantages and disadvantages of commercial low-slope systems, including new or changing products or application techniques. Learn to evaluate different systems to determine which best meets your roofing needs. For further information feel free to visit the RIEI website at: www.nrca.net/riei/seminars CAMTEC SeminarsConstruction (Emergency) First Responder January 10, 17 & 24, 2002Bidding Strategies for Profit January 31, 2002 Blueprint Reading III/Advanced February 5 - March 26, 2002 Contact CAMTEC to Register: (248) 972-1133 Fax: (248) 972-1135 University of Michigan Business School Finance for the Nonfinancial Manager February 4 - 8, 2002 Ann Arbor, MI Obtain a firm grasp of financial basics. Gain a thorough understanding of financial statements and ratios and how to use them. Understand key financial terms. Be able to determine the time value of money and risk. Finance for Strategic Decision Making April 15 - 19, 2002 Ann Arbor, MI Link strategic decisions to shareholder value. Understand the role of finance in corporate strategy. Identify key value drivers and financial risks. For more information contact: Cathy Webb, Assistant Director (734) 763-4439 or Register online now at: www.execed.bus.umich.edu Other Seminars Highly Effective Collection Techniques for Accounts Receivable December 17 - 18 Lansing, MI Essential training for collection supervisors, accounts receivable professionals, credit and financial managers, and anyone else who wants to reduce the expense, time and frustration involved in collecting overdue accounts. Register online at: www.natsem.com or call (800) 258-7246How to Build Powerful PowerPoint Presentations January 28,
2002 January 29, 2002 January 30, 2002 February 25, 2002 February 26, 2002 February 27, 2002 February 28, 2002 To register: Call toll free (800) 867-4340 On-line at www.compumaster.net or Fax (913) 432-4930 |
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