What will the stimulus package do for your business?

The House passed an $819 billion stimulus package, 244-188, Jan. 28. The stimulus is expected to create as many as 3 million to 4 million new jobs nationwide, according to a Jan. 29 bnd.com article. Construction workers, contractors and union officials across the country are hoping that the money set aside in the bill for building roads, bridges, schools and more will create jobs, according to a Jan. 30 article in The Washington Post.

The plan comes at a time when the percentage of the workforce receiving unemployment has reached a 25-year high, according to a Jan. 29 AP article in The New York Times. The construction industry has suffered its worst job losses in more than two decades, with 900,000 workers across the country unemployed, according to the Associated General Contractors of America, Arlington. And it could get worse. The trade group lobbied the Obama administration and Congress with 10,000 letters from its members, and expects most of its 33,000 member companies to lay off more workers, according to The Post article.

The stimulus plan, which sets aside about $150 billion for construction projects, would create or save more than 660,000 construction jobs, according to the AGC, of which about 13,300 could be in the D.C. region, according to The Post article.

The package is expected to give $638 million to the District, $1.23 billion to Maryland and $1.65 billion to Virginia for construction-related projects, according to the Post article. Illinois would get $1.8 billion for infrastructure, according to the bnd.com article.

Parts of the country have already started to see an uptick in construction. Other parts--such as Las Vegas, which experienced a major construction bust in the $3 billion Cosmopolitan Resort and Casino, the Crown Las Vegas, the Pinnacle Las Vegas, the Plaza Las Vegas and more--could follow suit.

What is your take on the effect of the stimulus package on “shovel-ready projects”? How will it influence your business and how soon?

By Sahely Mukerji, news editor/managing editor, Glass Magazine

Is small really beautiful?

If your company serves the residential market, you’ve no doubt witnessed the growing trend in building environmentally sustainable houses. It’s a movement that might never slow down.

The recent confluence of events--the housing/mortgage/foreclosure crisis, energy spikes, increased environmental awareness, the Obama administration with a stripe for ‘going green’--is simply accelerating a nationwide trend that had already begun to gain steam in several regions around the country.

A recent construction study by the National Association of Home Builders estimates that by 2010 as many as 10 percent of all housing starts in the U.S. will include some eco-friendly features. I’m not sure if that’s encouraging, especially when “some eco-friendly features” is an awfully vague term. Sprinkler timers, waterless toilets and attic vents are eco-friendly features, after all.

A key challenge, of course, is “designing green” affordably. Ironically, the size of the average American house has grown 140 percent since 1950, from 1,000 square feet to 2,400 square feet.

New houses in the U.S. are still dramatically larger than those in other developed countries. In fact, new construction starts is a key barometer of economic growth. When new construction falls, the markets react negatively. It’s ingrained in our thinking ... an American “virtue.” After all, bigger is better, right?

And yet there is no widely reported barometer of environmental sustainability. And even if there was, would fluctuations in the metrics move markets? Hmm ... an interesting notion.

Gas guzzlers and factories get the lion’s share of the blame for our environmental problems; but according to the “Architecture 2030 Study” constructing and operating commercial and residential buildings is responsible for almost half of the country's energy usage, with residential buildings comprising 21 percent.

Compare that to the transportation segment’s 27 percent and you see that residential home energy costs are more significant than most people realize. In the future, design will be essential to any solution. Some architects believe the focus should be on retrofitting existing buildings, rather than razing them and building anew. That, of course, would be a blow to new construction.

Perhaps it’s time we adopt a “new” mantra: Small is beautiful. At least that is the way a certain in-flight magazine author would have us think. Sarah Susank has just published her bestselling book: The Not So Big House: A Blueprint for the Way We Really Think. The book stresses quality over quantity.

And a ‘MarketWatch’ article further confirms the degree of this movement. The headline reads: “New homes get smaller. Say Goodbye to McMansions, Americans are buying ‘right-sized’ homes.” The topic de jour at the International Builders Show this past week.

But it requires us to look forward in a big way. Small is Beautiful: Economics As If People Mattered, a collection of essays by British economist E.F. Schumacher, resonates loud and clear. Sustainability may well become a new status symbol.

Check out the prefab Cellophane House on display at New York's Museum of Art: Could this be a vanguard of what’s to come? Note the solar panels: Now there may be a large opportunity worthy of exploiting.

We at the NGA are taking heed. We’ll soon announce a blue-chip executive industry discussion on the solar panel market at GlassBuild America on Oct. 1, 2009. Stay tuned for details on this must-attend event.

Remember: Small may be beautiful! That is, if the expected market shift does occur and your company is prepared to exploit the trend.

—David Walker, Vice President of Association Services, National Glass Association

Warning: Fake shipping company scam

In August, we launched a Scam Alert page on GlassMagazine.com to alert readers of fraudulent ordering schemes, including scams using fake shipping companies. Since posting the warning page, I have received numerous e-mails and calls from small business owners and managers in and out of the industry who have been affected. The same scams that have plagued the glass industry have hit vinyl dealers, print shops and even ice cream truck suppliers. Many owners caught the scam in time. Others were not so lucky.

I don’t want to belabor the point—I have blogged and reported on these scams previously--but the best way, and seemingly the only way, to beat a scam is to stop it before it happens. Know their tactics. Know the red flags.

According to my scam sources (a.k.a., business owners that have been scammed or nearly scammed), this is how the fake shipping company scam usually works:

• A customer contacts a shop via relay operator or e-mail to order a large quantity of product; in the glass industry, it’s usually 1/8-inch or ¼-inch annealed glass. (Red flags: The email exchanges are often littered with misspellings and poor grammar, and often come from a Gmail, Yahoo or similar free e-mail account.)
  


• The customer wants to pay for the product with a credit card and wants to ship the order a large distance, sometimes the end destination is across the country, sometimes it’s on another continent. The purchasing credit card is usually stolen. (Red flags: Scammers usually place an order for products they could easily get from a local shop, and the credit card billing address doesn't match the shipping address.)
  


• The customer says they want to use their preferred shipping company to transport the product. The customer asks the business to pay the delivery company directly and says they will send a check or money order the business to repay the delivery costs. (Red flag: Business owners have reported scammers request to use the shipping companies AGC Delivery International, Ox Direct Shippers or Cargo Trust Shipping Freight Co.)



• After the business has paid the delivery company, the scammer’s check or money order won’t go through, leaving the business without the thousands of dollars of delivery costs and with wasted product.

“We almost got taken. We had a order for approximately $12,000.00 to be shipped to Ghana. $6000.00 of that was shipping to be paid to via money gram to Agc Delivery International,” one business owner told me in a recent email. "I did not start checking things out until the three cards they gave me were declined. I typed the delivery company and your site popped up.”

Visit the Scam Alert page to see the latest postings from other business owners.

If you are contacted by a scammer, tell your peers and tell us. We’ll anonymously post your scam stories, fraud identification tips and any other advice you have on our Scam Alert page to help warn other business owners. Leave a comment on this blog, or e-mail me directly.


—Katy Devlin, commercial glass & metals editor, retail glass co-editor, Glass Magazine

The opinions expressed here and in reader comments are those of the individual authors and do not necessarily reflect those of the National Glass Association, Glass Magazine editors, or other glassblog contributors.

A little pick-me-up

I don’t know about you all, but amidst the seemingly unending grim economic news, I occasionally need a pick-me-up, which is why I appreciate the positive comments we’ve received from industry members regarding the year ahead.

While most agree 2009 will be difficult across all segments of the glass industry, it will not be without its opportunities, says Guy Selinske, president, American Glass & Mirror, Prior Lake, Minn. “There is one bright spot [in the retail glass market],” he wrote in an e-mail. “Because people are staying in their houses, we’re seeing an increased amount of remodeling. People are looking around at their houses and saying, ‘This is the room that needs work.’ Sometimes it’s a kitchen, sometimes a master bath and even some additions.”

Of course, the economic picture varies significantly depending on your geographic location. While the New York Building Congress predicted continued strength in all building sectors in the state in 2009, for example, Arizona’s future is decidedly less positive. Click here for a complete listing of 2009 state and regional forecasts.

Still, everyone has the opportunity to grow their customer base, even in hard times, says Paul Heinauer, president of Glasspro, Mt. Pleasant, S.C. “We are constantly talking about bringing value to our customers and striving to over-deliver,” he said in an interview. “I’m hoping that if we can do that—because our customers are also looking hard at value—we can grow our business … We must give customers reasons to choose [our company]. We have to be conscious of our reputation and what customers’ expectations are. We’ve got to bring value, and if we can do this, we can maybe actually grow our business. It’s not an easy road, but I feel that it’s an opportunity.”

In response to Sahely Mukerji's blog last week, another subscriber said they believed “we can learn and improve from every situation if we choose. This is a good time to learn some new things or to reflect on the things you learned in 1982, 1990, or 2001. Believe me, times are no worse now than then.”

What do you think? Is the forecast as bleak as it seems, or is there opportunity for growth in 2009?

—By Jenni Chase, Editor, Glass Magazine

What's your big plan this new year?

Salute glass folks, and welcome to the new year! Looks like we've started the year on a good note. The Dow was back up above 9000 on Jan. 2, its best close in two months. GM, Alcoa, Boeing and Citi were ahead among the 30 blue-chip stocks of the Dow average, raising it 2.94 percent, or 258.30 points, to 9034.69, according to an article in The Washington Post. Only one component, JPMorgan Chase, finished lower, down 18 cents to $31.35.

The S&P's 500 index rose 3.16 percent, or 28.55 points, to 931.80, while Nasdaq composite climbed 3.5 percent, or 55.18 points, to 1632.21, according to The Post article.

Last year, the Dow declined 33 percent, its biggest drop since 1931, and the S&P was down almost 39 percent, its worst since 1937. The Nasdaq was down more than 40 percent for the year.

In Big Three news, on Jan. 1, Chrysler was still waiting for its federal handout, while GM had gotten its first $4 billion in loans, according to an article in The Wall Street Journal. The loans come from the $700 billion bank rescue plan, approved by Congress in September. GM is spending approximately $33 million a day, based on spending $1 billion per month during the third quarter. That daily amount is likely lower for the fourth quarter as GM has reduced spending on operations, sponsorships, utilities and even office supplies, according to an article in the Chicago Tribune.

To this positive news, add the new president-elect's rescue plan that intends to create up to 3 million new jobs, provide tax relief to middle-class families and help governors cover the soaring costs of education and Medicaid ... not a bad way to start the new year.

How will you contribute to make this year better? What is your resolution to improve your business and your professional community? Is there a particular problem that the industry needs to tackle more effectively to make this a better year?

By Sahely Mukerji, news editor/managing editor, Glass Magazine