Postcards from the Show
As a result of too much good material and not enough space, here is a collection of semi-random notes from the International Builders’ Show in Orlando, Fla.
• Question: Does anybody really pay $99 a day for Internet connection — the asking price at the convention center?
• I told my cab driver what I was doing in Orlando.
“That’s funny,” he said.
“Because I must have taken a dozen people to and from the Builders’ Show, and I haven’t met an actual builder yet.”
There are two kinds of work, I explained to the driver, paraphrasing philosopher/mathematician Bertrand Russell. The first is moving and building heavy objects at or near the surface of the earth. The second is telling other people to do so. The first is hard work. The second is much more pleasant. (Now that’s a tip.)
• The builders I spoke to in Orlando had a near unanimous response to the stock question: “How’s business?” By far the most common was: “We’re doing well.” The emphasis was always on “we’re,” with the insinuation that competitors couldn’t claim the same. The worst report I heard was, “We’re doing OK.”
I explained the findings of my unscientific survey to a builder from Pittsburgh who promptly shredded my experiment as biased and flawed. “All the builders here in Orlando are doing well,” he said. “The ones who aren’t, well they’re back home trying to figure out how to stay in business.”
But maybe there’s another interpretation. The builder who recognizes the value of the kind of networking and education available at events like the International Builders’ Show are the kinds of builders who are going to be in good shape.
Just a thought.
• Credit to NAHB chief economist David Crowe for doing something extraordinary and refreshing. Before delivering his forecast for 2011, he revealed to the audience his forecast for 2010, which was off by a long shot (but closer to reality, he pointed out, than other forecasts). Bravo! Disclosure of past forecasting accuracy (or inaccuracy) is too often neglected. This should be standard operating procedure for all economists standing at a podium and talking about the future.
• Best description of pent-up demand, social trends and residential construction: “It’s only so long that a 30-year-old can live in his mom’s basement,” said NAHB’s Crowe.
• Overheard in the pressroom: “Does America need another manufacturer of faux stone products?” Remembered from Economics 101: “The American market will answer that question.”
There is always room for an innovator. Even in a crowded market, if a company can provide a value proposition to its customers, then it’s in.
• With his prediction for a 20% increase in housing starts, Frank Nothaft, chief economist at Freddie Mac, put the stat in perspective. If a typical builder built 25 houses during the market peak, this same builder produced only five houses in 2010, following form. A 20% increase in 2011 would mean this same builder would increase production to just six houses this year.
• I’ll take it.
— Ken Clark
Banning the bulb
The following letter is a response to the article “California says goodbye to 100-watt bulb.”
“I am a strong believer in efficient markets. If the technology were such that the efficiency of the alternative were better than the incandescent at an appropriate price then the markets would transition accordingly. However, as evidenced in the market, the current alternative lighting in existence does not meet the expectations of the masses and, therefore, the alternative is relying on government regulations to sustain itself. I am opposed to this kind of interference; nonetheless, I will sell the bulbs if mandated.”
— Jeffrey Gamss
Greenhill Industrial Supply
Healthcare reform: Repeal by the roots?
As politicians revisited last year’s healthcare reform plan, HCN solicited viewpoints on the wisdom of repealing the reform altogether. Here are two responses:
“In my view the cost of health care must be addressed, but to pass a monster healthcare bill with more than 2,000 pages that almost no one read before they voted to pass it was ludicrous at best and stupid at worst. All the regulations that were woven into the bill will impact every section of our economy. The last time I checked we don’t have citizens dying in the streets because they couldn’t get emergency health care, so the sense of urgency was hard to understand.
“The politicians need to identify the problems and then come up with the solutions and fine-tune the best healthcare system in the world — not destroy it. If they want to address the spiraling costs, they need to pass tort reform to do away with defensive medicine and the frivolous lawsuits, which costs hundreds of millions a year. They need to go after fraud and abuse to recover taxpayer money that shouldn’t have been paid out to begin with, and make it understood fraud and corruption will no longer be tolerated. Our country is on the verge of bankruptcy, and to pass huge spending bills is irresponsible.”
— Bill Bates
R.P. Johnson & Son, Inc.
“Any attempt to repeal health care is short-sighted, anti-people and anti-business. What we need to do is move beyond this first step and quickly move to a single payer system. This will reduce overall costs to both individuals and businesses, while extending quality health care to all. Let’s stop listening only to the spin doctors and start analyzing the situation and data available.”
— Bruce Millar
Are housing forecasts overly optimistic?
HCN asked readers if a 20% increase in residential construction was a reasonable forecast for 2011. Here are some responses:
“Our forecast is for approximately a 2% drop in housing starts nationally. We believe, however, that Texas may hold up a little better — not much, but a little. We are overall predicting a 5% sales gain, but some of that is inflation.
“I am deep down an optimistic person, but the reality of the late 1980s and early 1990s speaks loudly to me. And in those days we had far less foreclosures than today.”
— Byron Potter
Vice chairman and CEO
Dallas Wholesale Builders Supply, Inc.
Return policy reform?
From an exchange that appeared in HCN.com’s Readers Respond section regarding customer return policies.
“Marvin’s has a very customer-friendly return policy. If you buy something from us, you have the ability to return/exchange, repair or return/refund as long as you have a Marvin’s receipt. Right now, we do not have strict timelines established around returns (i.e., 30 days, 90 days, etc). We do require vendors to support our return policy as their customer, the same way we support our customers. We stand behind what we sell, and expect our suppliers to do the same. … When we find issues of abuse, we address it accordingly, but for us, return abuse is the exception, not the rule. So we do not feel that crafting our return policies around the exception is a sound business practice, and it definitely would not make it easy for our customers.”
— Craig Cowart
Marvin’s Home Centers
“I totally agree with [Craig Cowart, president of Marvin’s] in keeping the focus on building customer loyalty through a customer-friendly return policy. …
“As a vendor to ‘big-box’ stores, my concern is directed toward those few consumers who abuse the ‘system.’ Store personnel appreciate that policies are quickly set aside by upper management, even when abuse is clear or a return/refund is not warranted. … Good enough, we all understand that it is in the retailers’ best interest to honor an unwarranted return. It’s sales over time, not today, that build the business.
“All we need is for that same retailer to treat its vendors with the same care as they do their customer. We all need each other. If a retailer makes the decision to honor an unwarranted or unreasonable return/refund request, they should do so at their expense, not their vendor’s.”
— Barry Bader
Bonsal American hires sustainability leader
Charlotte, N.C.-based Bonsal American named Meredith Ware as the company’s director of sustainability. Ware, a LEED Accredited Professional, will lead the company’s sustainability initiatives and report to President David Maske.
“Efficiency is green,” Ware said. “At Bonsal American I am focusing efficiency through environmentally driven product and process innovation. This reinforces our commitment to provide our customers with the best environmental building products delivered through efficient manufacturing, sustainable raw material selection and waste minimization.”
Previously, Ware was sustainability director for Serious Materials Inc., a developer and manufacturer of sustainable green building materials in California’s Silicon Valley. While at Serious Materials, Ware re-engineered and wrote patents on various building materials manufactured with 90 percent less energy.
Most recently Ware was the COO of Clean Concrete Technologies, Inc. in San Francisco.
“Meredith is charged with helping us design and manufacture sustainability principles into our full complement of Sakrete, ProSpec, AmeriMix, and GemSeal branded products,” Maske said.
Ware will also work collaboratively with other product and process sustainability initiatives underway across other divisions of Oldcastle, the parent company of Bonsal American.