PUBLIC POLICY

Home Furnishings Tax Incentive, by John Satagaj, email@jsatlaw.com

Some of our customers in the furniture and cabinet manufacturing sectors and their customers in the retail home furnishings sector are working on a specific initiative to promote consumer confidence. WMMA urges you to support this initiative by contacting your U.S. representative.

Representative Hank Johnson (D-GA) has developed proposed legislation, the Home Improvements Revitalize the Economy Act of 2009 (HIRE Act), to provide such incentives.

The draft bill would provide a tax deduction of up to $2,000 per family ($1,000 per individual) for the purchase and/or installation of qualifying home furnishings or building products for families making up to $300,000 a year ($150,000 for individuals); provide a tax credit of up to $500 per family ($250 per individual) for the purchase and/or installation of qualifying home furnishings or building products for low income families and individuals; and provide a doubling of the applicable tax deduction or credit for the purchase and/or installation of qualifying home furnishings or building products which meet recognized environmental standards.

The bill also has a provision for a tax credit of up to $10,000 for contractors and retailers for the purchase of qualifying home furnishings or building products for resale.

The Case for Action

A coalition of associations, which includes the American Home Furnishings Alliance, the Hardwood Federation, the Kitchen Cabinet Manufacturers Association, and the National Home Furnishings Association, has made the following observations about the need for the bill:

• The HIRE Act would provide consumers and businesses tax deductions and credits to offer relief to middle and low income families for the purchase of home furnishings and building products used to improve their homes.
• During the current economic downturn, home repairs and upgrades have been dramatically curtailed. This has had a significant impact throughout the U.S economy, and in particular in the home furnishings and building products sectors. These industries have experienced steep declines in sales, job losses, and other financial hardships. The HIRE Act is a temporary, timely, and targeted effort to put money in the hands of consumers and help them improve the value of their homes by incentivizing the purchase of home furnishings. These purchases will also help to save and stimulate the manufacturers, distributors, and retailers of these products.
• The home furnishings and building products industries have lost $67 billion in economic value from 2007 to 2008; are expected to lose another $74 billion from 2008 to 2009; have lost 273,000 American jobs in 2008; and are expected to lose 299,000 jobs in 2009.

When a representative develops legislation, it is customary for the representative to circulate what is known as a “Dear Colleague” letter (which is attached here for your review), asking other representatives to co-sponsor the bill. Representative Johnson is now asking others to join him as co-sponsors of the bill.

Contact Your U.S. Representative

You can help the “channel” by contacting your representative and ask him/her to co-sponsor the bill. You can find the name of your representative by going to www.house.gov. A zip code search engine allows you to type in your zip code to find your representative. You can also send an email from that page.

Mail no longer gets through to congressional offices in a timely fashion. Calls, faxes, or emails, in that order, work best. The central congressional switchboard number is 202-225-3121. Ask to be transferred to your representative’s office. Explain that you are a constituent and ask to speak to the representative. If you cannot connect with the representative, ask to speak to a staff person with responsibility for business or tax issues. Explain that you would like to discuss the nature of your business and the need for such incentives. Tell whomever you speak to about representative Hank Johnson’s (D-GA) bill. Ask for the sale – ask your representative to co-sponsor the bill.

If you do not talk with someone with policy responsibility, at a minimum explain you are a constituent and that you would like their fax number. Send a letter on company letterhead. If you send an email, always identify yourself as a constituent and give your zip code.

Representative Johnson said in the letter to his colleagues:

The HIRE Act would re-attract many households into the market that would otherwise forgo spending in 2009 and 2010, stimulating the manufacturing market for these products, improving the flow of capital, helping low and middle-income taxpayers, and directly protecting American manufacturing, retail and contractor jobs.

Great words to read!

Please share copies of your correspondence or reports of your calls with WMMA by emailing info@wmma.org. We would appreciate information on the results of your efforts.

INTERNATIONAL BUSINESS DEVELOPMENT

ISPM 15: Wood Packaging Requirements for International Trade, by Harold Zassenhaus, Harold@zemg.us

Wood packaging material (WPM) made of unprocessed raw wood is recognized as a pathway for the introduction and spread of pests. To limit the entry and spread of quarantine pest through international trade, the International Plant Protection Convention (IPPC) in 2002 adopted the International Standards for Phytosanitary Measures Guidelines for Regulating Wood Packaging Material in International Trade, or ISPM 15. The standard was updated in April 2009.

WPM covered by ISPM 15 includes dunnage but excludes wood packaging made from wood processed in such a way that it is free from pests (e.g. plywood, OSB, MDF, particleboard) or is excessively thin (less than 6 mm, including wood shavings). Preservative-treated (pressure-treated) wood;does not meet the standard, unless the wood was heat-treated and stamped HT prior to preservative treatment.

ISPM 15 was adopted by more than 150 countries at the IPPC in March 2002, with each country allowed to choose their own date for actual implementation of the standard. As of this date, the following countries have implemented ISPM 15:

Specific regulations for each country can be found on the APHIS website, http://www.fas.usda.gov/ffpd/WTO_SPS_TBT_Notifications/WPM%20Notifications/WPM_Summary_Table-09-28-05.doc

The phytosanitary measures described in ISPM 15 are not intended to provide ongoing protection from contaminating pests or other organisms.

The IPPC ISPM 15 standard prescribes two types of treatments for wood packaging materials, (a) heat treatment, and (b) fumigation with methyl bromide. These treatments must be applied to all solid wood components of the wood packaging materials, both hardwood and softwood species of wood.

U.S. Application of ISPM 15

As the National Plant Protection Organization (NPPO) of the United States, the United States Department of Agriculture, in coordination with the wood packaging material industry, has developed an export program to guarantee compliance with the import requirements of trading countries. The program insures certified treatment and marking of wood packaging material for international trade, while maintaining traceability of the packaging material. The integrity of the program is dependent upon industry’s compliance.

Heat Treated (HT) Program
The American Lumber Standard Committee (ALSC) administers the heat treatment program. Under the program wood packaging material (WPM) producers must enroll with an inspection agency accredited by the ALSC.
 
In order for WPM under the HT program to be ISPM 15 compliant, WPM may be produced by one of two methods:

• The WPM producer (including the exporter) may purchase previously ALSC accredit agency HT grade marked lumber, and cut components from the HT labeled lumber for use in construction of the WPM. The resultant WPM product is then eligible to be labeled with an ALSC Accredited Agency Quality Mark. Or,

• The WPM producer may construct WPM from lumber that is not heat treated, place the product in a heat chamber and heat treat the WPM product to achieve the minimum wood core temperature of 56 degrees C for a minimum of 30 minutes. The product then must be labeled with one of the ALSC accredited Agency Quality Marks.

The costs for accredited agency services can range and members should check and compare. Under a quick survey, for those exporting on a monthly basis the fee seems to fall between $300-$400/month. For one off inspections the fee can be around $500.  

Fumigation Program
At this time only wood fumigated with methyl bromide is permitted. The IPPC is investigating other fumigation alternatives.

The Methyl Bromide (MB) Fumigation Program is structured much the same as the Heat Treatment (HT) program. The National Wood Pallet and Container Association (NWPCA) administers the fumigation program. Inspection agencies enrolled with the NWPCA monitor the fumigation with methyl bromide and treatment marking of WPM in conformance with ISPM 15. The agency quality mark may only be applied on WPM treated by fumigators certified in the program.

In order for exporters to ensure WPM is treated and given the agency quality mark exporters may contact a fumigator registered in the program, or register with one of the accredited inspection agencies enrolled in the program or purchase WPM bearing the agency quality mark confirming treatment with Methyl Bromide. A listing of inspection agencies as well as fumigators registered in the program may be accessed from the NWPCA web site or contact the NWPCA at 703-519-6104.

The cost to have a container fumigated by an accredited agency can vary but in a quick survey ranged from $300-$450 plus the labor cost of affixing the stamps. Some agencies only have their own facility and you must freight the container there; others will come to your facility to fumigate the container just prior to loading.

Practical Application for WMMA Members

Most WMMA members are struggling to comply with ISPM 15; especially sporadic exporters located in more remote areas far from third party ALSC accredited export boxers or NWPCA fumigators. Here are a few options for consideration:

• Use processed wood or materials other than wood --- OSB, plywood, etc. with plastic or other non wood material for dunnage/securing corners. If you need wood dunnage to secure corners in your crates order it pre stamped from an accredited supplier. Note that the wood cannot be resawn.
• Purchase pre made and accredited pallets/skids. Cover the machine in anything other than unprocessed wood.
• If you cannot avoid using an accredited agency for MB or HT compliance under ISPM 15, try to hook up with other companies, etc. in your area to drive down prices from the accrediting agencies. Many are willing to provide discounts based on volume.

Sorry to state that ISPM 15 implementation by other countries will likely increase. And there is a chance that ISMP 15 like regulations could be adopted for domestic freight.

BUSINESS DEVELOPMENT

Sales Forecasting Tools (Members Only)

Construction Put in Place – May 2009
Economic Outlook Report – Summer 2009 (Analysis for WMMA provided by the Institute for Trend Research)
Manufacturing and Trade Inventories and Sales - April 2009
Manufacturers’ Shipments, Inventories and Orders – May 2009
New Residential Construction - May 2009
Purchasing Managers Index – June 2009
U.S. Leading Indicator - May 2009

EDUCATION & SCHOLARSHIP

Meet Joseph Elliott, a WMMA Scholarship Recipient

As a senior, I have taken many courses to this point. These include courses in the fields of solid mechanics, vibrations, dynamics, thermodynamics, and fluid mechanics. These courses provide a good knowledge base for most mechanical engineering knowledge. Most importantly, these courses develop critical thinking and problem solving skills engineers need to use in the field. I am also enrolled in an Outdoor Leadership Minor. This minor includes courses in backcountry skills, leadership and adventure education, and has helped to develop my love of the outdoors and leadership experiences that I can draw upon for any career I have in the future. This coming semester I will be taking a course in wood machining and properties of wood. I am looking forward to this course and hope it will be a good hands-on experience.

Mechanical engineering is such a broad discipline, it is impossible for one person to be an expert at everything. I plan on pursuing the rapidly growing field of renewable energy when I graduate, possibly by going to graduate school.

NEWS YOU CAN USE

Continuous Improvement Observations from a Merillat Cabinet Plant Tour: Part II

In June, members of the Manufacturing Strategies Committee WMMA’s Manufacturing Strategies Committee toured Merillat Cabinet plants in Atkins, VA. Members took away an understanding of Continuous Improvement (CI) and how the process can dramatically improve manufacturing results.

In the second of a series (read the first part) of committee member observations, Jacob Greenfield and John Schultz note what they learned.

Jacob Greenfield, James L. Taylor Manufacturing Co.

At the beginning of June, Masco BCG was kind enough to host WMMA’s Manufacturing Strategies Committee meeting and demonstrate their advancements from years of continuous improvement of their processes. Though you cannot take more than two steps into their factory without seeing 10 unique ideas, we committee members were asked to summarize our top five observations. The "Glass House" concept struck me most about their manufacturing culture.

1. Metrics - We all have great workers who care about our companies and want to do a good job. As manufacturing managers, we can forget the importance of transmitting the company and worker performance data back to the employees. Masco BCG has developed a philosophy of relaying information back to the people doing the work. They display performance metrics throughout the factory allowing the worker to know exactly how well they and the company measure up.


2. Tools - How many times have you walked up to a toolbox and spent several minutes looking through all of the drawers only to find that the tool you seek has been lost? Masco BCG has pegboards for every tool and for every machine in their factory. If a tool has been taken, you see only an outline of the missing tool like a chalk line in crime scene.


3. TPM - Total Productive Maintenance. Machinery manufactures like to hide the chains, sprockets, and gears for our machinery behind sheet metal guards. While this makes sense from the standpoint of safety, it couldn't be worse for a maintenance worker. That's why we often find guards laying on the floor after installation. Masco solves this problem with the use of clear plexiglass rather than opaque steel. To see if a chain has jumped its sprocket, just look. "Maintaining a machine should be as easy as checking the gas level of your car. A quick glance should tell you if everything is running normally."


4. Manuals - In most shops, instructions for operating and maintaining a piece of equipment are kept neatly filed in the manager's cabinet. Masco BCG goes to the other extreme. Every machine has clear operating instructions hanging next to the equipment.


5. Green - You won't find a rogue garbage can at Masco's factories in Atkins, VA. Every place for waste comes standard with three distinct bins for paper products, bottles and cans, and traditional garbage. They then audit these receptacles to make sure the employees use them properly. Not surprisingly, they have found that given easy opportunity to protect our environment, people generally do the right thing.

John Schultz, Super Thin Saws, Inc.

1. The most impressive thing for me was not the number of technologically impressive fixes for issues they had discovered, but the HUGE number of technologically unimpressive, inexpensive fixes that ANY company would be easily able to implement (for example, the piece of surveyor’s tape to show if the fan inside an electrical cabinet was actually working.) “Creativity before Capital”


2. There was an inspection booth (finish quality) with incandescent and fluorescent and natural lighting (and switches to select which you wanted, to see that the finish looked correct under ANY lighting.


3. The gauges (pressure gauges, ammeters, etc) had clear tape-lines to show the proper range. EASY!


4. At many of the work stations there were extensive displays of the various most common types of defects. They just took some rejects and cut them to convenient size and mounted them here.


5. Many machine parts had been replaced with acrylic pieces so the operator was constantly looking inside the machine in key places that he needed to be aware of.


6. They rotated jobs fairly often to minimize ergonomic issues.


7. EVERYTHING had grease fittings added in convenient places outside the guarding so that operators could lube the machines quickly and conveniently without removing guards (or taking any other unnecessary steps).

Getting Your Products into India - Understanding Indian Customs

WMMA encourages members to attend this webinar presented by the U.S. Commercial Service. WMMA’s International Business Development Committee has identified India as one of the best target markets for U.S. woodworking equipment and is active in the market through the American Center for Wood Processing.

Date: August 4, 2009
Time: 10:00 am EDT
Learn more/register:https://emenuapps.ita.doc.gov/ePublic/newWebinarRegistration.jsp?SmartCode=9Q9Q

U.S. exports to India have doubled over the last three years as India continues to be a vibrant growing market despite the economic downturn. However, clearing India’s customs process remains one of the main challenges to entering the Indian market. Learn how to successfully navigate Indian customs directly from the experts at the U.S. Commercial Service and freight forwarding companies specialized in customs clearance in India. Any company currently exporting or looking to expand sales into India would benefit from this webinar.

New Requirement for U.S. Exporters of Machines to the EU

As of December 29, 2009 when the new Machine Safety Directive (2006/42/EC) becomes mandatory, U.S. exporters of machines will need to identify a person established in the European Union who is authorized to keep the manufacturer’s technical file or have quick access to it. This person’s name must appear on the declaration of conformity along with the name and address of the manufacturer.

Point 2 of Annex II of the new Machine Directive outlines this new requirement: “name and address of the person authorized to compile the technical file, who must be established in the Community.”

The person could be no more than a letterbox, a point of contact for the authorities in case there are questions about conformity of the machine or about accidents. The person based in Europe could be the importer/distributor, a lawyer, an authorized representative, or any other person. The manufacturer remains responsible for compiling the technical file. The technical file does not have to be physically in the EU but should be rapidly accessible in case of need.

This requirement is an example of the beefed up surveillance and enforcement the EU is putting into effect to back up the CE mark program.

The following are names of people who can serve as a European representative or who can provide a European representative to fulfill this requirement:

• Obelis, Belgium (http://www.obelis.net/)
• QNet, the Netherlands ( www.ce-mark.com)
• Laidler Associates, United Kingdom ( http://www.laidler.co.uk/)
• SDA Technical Services, United Kingdom (www.sda-ltd.co.uk)
• Consultants Europe, the Netherlands (www.ce-marking.nl)
• Eurolink, United Kingdom (http://www.eurolink-europe.co.uk/cemarking.cfm)

(Note: This list is just a small sample of consulting firms that can provide this service.  The list does not represent an endorsement by the U.S. Department of Commerce but is just to provide companies with some immediate contacts to meet this European Union rule).

For more information, contact Bob Straetz (Office of Europe, Main Commerce Building, Washington, DC) at 202-482-4496 or Sylvia Mohr (U.S. Mission to the European Union, Brussels) at 011-322-508-2675.

ASSOCIATION NEWS

Members Attending AWFS

Tough challenges are met by tough companies. Click on the gloves to see a list of WMMA members at AWFS®VEGAS, July 15 - 18. Visit WMMA at Booth #5327!

Economic Forecast Webinar with Alan Beaulieu

Register now for the WMMA Economic Forecast Update. This is a free and exclusive webinar, a benefit of WMMA membership.

Is the End in Sight? An Economic Forecast by Alan Beaulieu

(Wednesday, July 22, 2009 at 1:00 PM EDT, 12:00 PM CDT, 11:00 AM MDT, 10:00 AM PDT)

The stock market rebound has been touted as the “beginning of the end.” While it does not yet meet the ITR® criteria of a leading indicator signal for a recovery, economist Alan Beaulieu is starting to see leading indicator signals confirming a 2010 recovery. Meanwhile, be prepared for continued volatility in the market through at least the summer and a tough 2009 all around. Alan Beaulieu will discuss what the latest economic data is revealing and tailor his forecast for the woodworking industry. This webinar will allow time for a lively interchange of questions and answers.

Fall 2009 – An Economic Forecast by Alan Beaulieu

Mark your calendar now for Monday, October 5, 2009 at 11:00 AM Eastern.