The ABCs of a Hall of Fame
Lowe’s chairman emeritus Robert Strickland was inducted into the Home Channel Hall of Fame four years ago. As he approached the podium, he seemed as relaxed as you or I might be approaching the office microwave at lunchtime.
“I would like tonight to talk about A, B, C,” he began. And with those three first initials, he launched into a discourse that summed up the lessons learned from a career of successful retailing — or as close a summation as three words can get to a 41-year career.
He might have pulled notes out of his suit pocket, but I don’t remember it. I also don’t remember what A, B or C stood for. It might have been “Attitude, Business and Communication.” Or it might have been “Ambition, Belief and Competitors.”
It doesn’t really matter now. What continues to matter is his message, his tone and his impact. He skillfully turned those three words (whatever they were) into a celebration of togetherness — suppliers, vendors, retailers, consumers and competitors. We were all one — an industry of teammates on the cusp of giving a standing ovation to a deserving Hall of Fame inductee.
That’s the way I remember it.
In the audience and sitting at a table reserved for Lowe’s guests, Lowe’s president and COO Larry Stone was soaking it all in. “During that dinner, Mr. Strickland and his wife told stories of the early days at Lowe’s, and I was fascinated by those stories,” he told Home Channel News. “It’s just unbelievable. Wow. Wouldn’t it have been fun to work through that?”
Fast forward four years, and Stone will follow Strickland’s footsteps into the Home Channel Hall of Fame as the 2011 honoree after his own four-decade-plus career at Lowe’s. (See Stepping down: Larry Stone, p. 20.)
If Stone’s career had an “ABC” — the “A” would probably stand for “Authenticity.” He started in 1969 as a $1.60-per-hour Lowe’s associate, and hasn’t let success change him. “I’ve had a great career, but I’m still the same person,” he said.
Or the “A” might stand for “America.” Because when he looks back at his career, Stone says he’s reminded of the song from his teenage days called “Only in America” by Jay and the Americans. “It’s only in America where things like this happen,” Stone said.
There’s an outside chance “A” would stand for “Apprehension” — as it relates to taking on new jobs and new responsibilities. “To sit here and tell you I was not apprehensive about some of them would not be the truth. Sometimes you’re apprehensive. Do I have the knowledge? Do I have the skill? But I would take a job and study and ask questions and learn and read until I mastered it.”
Stone will be inducted in the Home Channel Hall of Fame during a special Golden Hammer breakfast May 11, an event held in conjunction with the National Hardware Show at the Las Vegas Convention Center.
And somebody will be taking notes.
— Ken Clark
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U.S. Lumber gets an Asian boost
Although some U.S. home builders are cautiously starting to crank out a few houses, lumber producers aren’t seeing production levels rise nearly enough to reopen their sawmills en masse. In the western states, however, wood producers have been doing a brisk business in exports to China, Japan and Korea. Asia’s hunger for logs and lumber is so great that some producers are planning to boost their output this year just to meet this demand.
A quick look at the numbers tells the story.
Exports of lumber to China and Hong Kong totaled $102.3 million in 2010, a 181% increase over 2009, according to statistics kept by the U.S. Department of Agriculture. Japan, which buys treated lumber as well as softwood from the United States, purchased $147 million in 2010, a 52% increase.
In 2009, the 12 western states that belong to the Western Wood Products Association (WWPA) posted their worst year in modern history, in terms of output. In 2010, lumber production in those same states rose by 6%.
“A big percentage of that is related to exports,” said WWPA spokesman Frank Stewart. “Manufacturers are actively pursuing [the export] market. It certainly has helped with profitability issues.”
Although exports can’t replace the business lost to the home-building slowdown — approximately half the demand for western lumber has gone away, according to Stewart — overseas demand is making a noticeable difference. For large companies like Weyerhaeuser and Plum Creek, export sales are increasing profits and providing executives with good news to deliver to shareholders. For a few smaller sawmills, overseas sales are helping them survive the housing downturn.
The varieties exported depend upon the countries and their construction styles. Last year Japan was the United States’ largest trading partner for Douglas fir, although one-third of its U.S. imports are hemp fir and hemlock.
China is a different story. For the most part, the Chinese aren’t using lumber to build houses; they’re using it for concrete forms, wood pallets and crates. So they’re looking for lower-grade lumber. And this brings us to the global competition for the Asian wood market and, of course, international politics.
Demand from China began climbing in 2007 when Russia — the largest supplier of logs to China — decided to impose a high tariff on its log exports. Russian trade officials wanted to export finished products, like lumber, instead of raw timber. But the Chinese began looking elsewhere, and they found a ready supply in North America.
Canada has particularly benefited. The huge amount of wood damaged by the pine beetle in British Columbia is adequate for China’s purposes, and the price is good, too. Shipments to China and Japan last year from British Columbia were valued at $687 million and $647 million, respectively. “Our export volumes pale in comparison to the Canadians,” said Stewart of the WWPA.
One Canadian government estimate predicts $1 billion in B.C. wood exports to China in 2011. Trade officials, still stinging over the U.S. lumber tariffs, have boasted that China could replace the United States as the No. 1 destination for lumber from British Columbia within three years.
But there are two great unknowns that could have a profound influence on the Asian wood markets. One is a lowering of the Russian tariffs, and the other is the March 11 earthquake in Japan.
“There’s talk that the tax will drop to 12.5% from 25%,” said Craig Larsen, president of the Softwood Export Council. Much of it has to do with China’s proposed entry into the World Trade Organization, he explained.
As for Japan — where Larsen happened to be when the March 11 earthquake struck — there are short-term opportunities for wood product suppliers. Japan’s two biggest suppliers of plywood, located in Sendai, were wiped out by the tsunami. Although U.S. producers do not make plywood to Japanese specifications, that could change.
The Japanese government has already put out contracts for 10,000 small housing units, according to Larsen, and many of these will be stick framed. But U.S. producers will have to compete for the business with the Canadians, who can supply SPF from eastern British Columbia, a preferred softwood lumber for Japanese framers.
“In the short term, there will be a slowdown,” Larsen said. The Japanese will not embark on replacing the 400,000 homes it lost until it studies the best way to do it and where these houses should go, a process that should take at least six months, he said.
Paul Jannke of Forest Economic Advisors (FEA), a wood products forecasting and consultancy firm, agrees. Jannke estimates that it will take at least six months for the rebuilding effort to begin. Construction won’t start in earnest until 2012.
Some homes will never be rebuilt. “Think about [Hurricane] Katrina,” Jannke cautioned. “A lot of those people just moved away.”
Jannke points out that the Japanese prefer post-and-beam style homes over stick framing, although many are switching to engineered wood products such as LVL posts.
There’s also a product migration on the Chinese side. “The [export] ratio is definitely toward the higher grade lumber,” Jannke said.
Reports from some of the industry’s largest producers bear this out. Speaking at an analyst conference on Feb. 24, Weyerhaeuser CEO Dan Fulton said: “In order to satisfy the increasing demand from China, the Chinese are buying higher quality logs and, accordingly, they’re paying higher prices.” Although Japan has traditionally dominated Weyerhaeuser’s export business, representing 80% in 2010 compared with 14% for China, revenues from exports to China rose more than 300% in 2010.
Over at Plum Creek Timber, western sawmills have increased production in response to offshore demand, particularly from China. In its fourth-quarter financial report on Jan. 31, 2011, the company said it expects to export 7% of its Oregon saw logs to China, compared with only nominal volumes in the fourth quarter.
Although the western wood market is still volatile — Russia could drop its tariffs and Japan’s economy was dealt a crippling blow — Jannke of the FEA points out that there’s another thriving export market within our borders: Southern Yellow Pine.
“Although it’s very small right now, the Chinese are going to the Southern producers, particularly for treated wood,” Jannke said.
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Réno-Dépôt: Project guides plus electric car parking
The newest Réno-Dépôt store, the 17th in the RONA division, opened just outside Montreal in Vaudreuil-Dorion, Quebec, last month. The 102,000-sq.-ft. home center catering to contractors and DIYers is an example of Réno-Dépôt’s new-concept format.
Here’s what makes it a new-concept store:
• The company expects the building to be LEED-certified. But more interesting is the energy-responsible parking — spaces near the entrance are reserved for electric cars.
• The central aisle of the store is lined with stores-within-stores — flooring, doors and windows, kitchens and paint. Positioned first relative to the entrance is the storage boutique, described as “an emerging priority for consumers” and carrying items for the garage, kitchen, basement and closets.
• A centrally located “Project Space” — part pro desk, part genius bar — is staffed with “Project Guides” described as experienced advisers to discuss renovation projects. It’s also the place for customers to organize installation services, obtain financing and manage their project.
“This store is one of a new generation for Réno-Dépôt,” said Mario St.-Louis, RONA’s VP retail for Quebec, who described the shopping environment as “enjoyable, customer-friendly and efficient.”
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