Candidates address the home channel
In the next four years we could theoretically have the addition of a green building lender — Connie Mae — or the total elimination of the Internal Revenue Service. Those ideas belong to Hillary Clinton and Mike Huckabee, respectively.
The latter issue, eliminating the IRS, has been predicated on the idea of instituting a national sales tax — in Huckabee’s plan, 30 cents on the dollar for consumer purchases. Of course, retail groups have bristled at the idea of a national sales tax as being unnecessarily burdensome on business owners.
“We’re certainly not in favor of a national sales tax, but we’d certainly be in favor of something that leveled out sales tax inequalities between the states,” explained Drew Alexander, chairman of the International Council of Shopping Centers, at a legislative roundtable held last year.
Some of the changes proposed by candidates are less sweeping but worth noting. The subprime mortgage market meltdown has led to a variety of proposals, on topics from how to help borrowers avoid foreclosure through an expanded NeighborWorks program (Mitt Romney) or setting tougher laws for mortgage fraud through the STOP FRAUD Act (Barack Obama).
The National Association of Realtors is just one group closely watching the candidates’ subprime stances.
“With the foreclosure rate increasing rapidly, there’s a lot that we’re watching,” said Mary Trupo, a regulatory and legislative issues spokeswoman for the NAR. “We would like to see something aimed at helping the people that are already trapped. It’s a real hands-on, grass roots kind of issue, because it affects the community and it affects the economy overall.”
According to data from Irvine, Calif.-based real estate research firm RealtyTrac, 2007 was a tough year for many more homeowners than 2006. The number of homes in some state of foreclosure was 79 percent higher in 2007 than in 2006, and the number of foreclosure filings — about 2.2 million nationwide — was 75 percent higher year-over-year.
“We do believe that there needs to be better regulation and oversight in the [mortgage] industry,” Trupo added.
The longstanding issue of how best to deal with the estate tax on inheritance has been particularly relevant for businesses like family owned lumberyards and hardware stores. Predictably, support or disdain of the estate tax falls along party lines — McCain, Romney and Huckabee have expressed a desire to eliminate the estate tax. Obama and Clinton have explicitly supported preserving it in some form, with the potential for reforms to protect small businesses.
Affecting small and large businesses alike, the issue of how to regulate “green” building practices will undoubtedly be a central issue for pro dealers, builders and eventually all retailers of environmentally friendly home products. The candidates have widely varying views on the issue, from creating a set of federal regulations on green issues to, as Huckabee has suggested, letting “the free market sort out consumer preferences.” Health care issues also rank high on the candidates’ business plans.
Whirlpool up in the fourth quarter
Still seeing the benefits of its 2006 acquisition of Maytag, Whirlpool reported higher fourth-quarter earnings of $187 million, up 71.6 percent from $109 million last year. Sales for the quarter were $5.33 billion, up 7.7 percent from $4.95 billion last year.
For the full year, net earnings rose 47.8 percent to $640 million from $433 million in the previous year. Sales for 2007 were $19.4 billion, up 7.2 percent from $18.1 billion last year.
Whirlpool announced intentions last week to close plants in Tennessee and Mexico, affecting about 1,250 workers. The company said it would eliminate 500 jobs from a plant in La Vergne, Tenn., and a further 750 jobs at a plant in Reynosa, Mexico. Production of built-in refrigerators made in Tennessee will move to the company’s Fort Smith, Ark., plant, which plans to add about 275 jobs by December, the company said.
Jeff Fettig, chairman and CEO of Whirlpool, credited international strength for offsetting a weaker domestic climate.
“Our performance in this environment highlights the strength of our global brands and the geographic diversity of our global operating platform,” Fettig said.
Whirlpool’s North American sales fell by just under 1 percent to $3 billion, while sales in its Latin American segment grew 30 percent to $1 billion. European segment sales rose 12 percent to $1.1 billion, and Whirlpool Asia sales grew 26 percent to $155 million.
ProBuild completes purchase of HD Supply lumberyards
ProBuild Holdings has announced the completion of its purchase of HD Supply’s LBM assets, a collection of 39 lumberyards, seven truss plants, 10 engineered wood production facilities and a construction services division, all located in Florida and Georgia.
Terms of the sale, first reported by Home Channel News late in November, were not disclosed. The purchase follows other acquisitions in the Florida and Georgia markets by the Denver-base ProBuild, now the nation’s largest distributor of building materials to professional customers. In a prepared statement, CEO Paul Hylbert said the company will continue to pursue an aggressive strategy in the Southeast, which he described as a “long-term, high-growth housing market.” ProBuild now operates more than 520 locations in 40 states.
The remainder of HD Supply is still owned by three private equity groups, who bought the entire division from Home Depot on Aug. 23 for $8.5 billion. The LBM side of the business, now spun off to ProBuild, was built upon three major acquisitions: Williams Bros. Lumber outside Atlanta; Cox Lumber in St. Petersburg, Fla.; and Forest Products Building Materials in Sarasota, Fla.