The Cutting Edge™ - March 2004

13^th Annual Woodworking Industry Conference

Attendance Growing at the WIC!

Eager to make your appointments for the Woodworking Industry Conference (WIC) Contact Table Program? Click on http://www.wmma.org/pdf/Adv_Reg_List.pdf to view a complete list of registered delegates, as of March 19th.

Begin calling your industry partners and schedule appointments to meet with them during the WIC, which is April 21st – 24th in Tucson, Arizona. Don’t see a valued customer or dealer listed? Contact them and encourage them to participate in this valuable forum.

Use the 2004 WIC Registration List to:

•  Schedule contact table appointments while it is still early.
•  Know who will be on the golf course so you can schedule some quality time.
•  Make dinner arrangements for Thursday and Friday nights – plan to dine with  respected partners or build new relationships.

If you have yet to register, do not miss this annual opportunity to make long lasting business connections with your industry peers.

•  A limited number of rooms are still available at the $185 room rate at the Hilton El Conquistador Golf & Tennis Resort, the luxury resort property in southern Arizona hosting the Conference.
•  You only need to be away from the office FOUR DAYS to reap the benefits of this Conference – four days of networking and education that will positively impact your business.
•  Delegates want to make the most out of their investment – the more industry players in the mix, the better for everyone.
  
  Register today! http://www.wmma.org/events/wic.cfm.

Public Policy

Déjà Vu All Over Again
By John Satagaj, WMMA® Legislative Counsel, (email@jsatlaw.com)

It took us quite a while to dig ourselves out of the federal deficit hole we found ourselves in during the mid to late 1980's. We were only able to breathe the rare, purified air of surplus budgeting for a short while. Now we find ourselves back in the valley of deficit spending.

The President has delivered to Congress his proposed budget for fiscal year 2005. While there are hundreds of pages of initiatives, the initial attention has been focused on two items: the fact that it is not a balanced budget and it calls for the permanent extension of various tax cuts.

The budget proposes a 3.9-percent increase in overall discretionary spending for 2005. This includes a 7.1-percent increase in spending authority for defense, 9.7 percent for homeland security, and 0.5 percent—or below the rate of inflation—outside these areas. The budget includes a deficit of $364 billion in 2005, but this projection does not include expected but undetermined additional costs arising from ongoing military operations in Iraq, extending beyond 2004. The President has pledged to cut the size of the annual deficit in half within five years, down from $521 billion this year to less than $300 billion in 2009.

As we predicted, the Medicare prescription drug subsidy law is already making its mark on the budget, and not in a good way. The ink is hardly dry on the new Medicare law, and the budget concedes what we had been predicting well before passage of the bill – the $400 billion price tag on the legislation was obsolete the day it was proposed. The President's budget pegs the new projected cost at $539 billion.

The President's proposal includes making permanent the tax cuts enacted in 2001 and 2003, which is essential for promoting economic growth and higher levels of income in the future. The other proposals, also intended to strengthen the American economy, affect a wide range of areas including encouraging saving, investing in health care, providing incentives for charitable giving, strengthening education, encouraging telecommuting, increasing housing opportunities, protecting the environment, and increasing energy production and promoting energy conservation, as well as simplifying the tax laws. Additionally, included are proposals to strengthen the employer-based pension system, close loopholes and improve tax compliance, improve tax administration, as well as proposals related to highway reauthorization and proposals to extend expiring tax provisions. In fiscal year 2005, to extend and/or make permanent some of the 2001 and 2003 tax cuts would total just under $12 billion. The real debate, however, regarding the tax cuts, is the long-term impact. Those same cuts would have a total projected revenue lost of just over $1 trillion over ten years. Advocates, including the President, argue that the economic prosperity associated with the cuts will ultimate reduce the deficit. The opponents argue that making the cuts permanent saddles the government with a long-term revenue constraint when there are many other needs, from health care to education, which are going unaddressed.

One of my favorite fiscal watchdog groups, the Concord Coalition, didn't mince words on the subject. “The Administration’s goal of cutting the deficit in half by 2009 is better than having no deficit reduction goal at all, but it ignores the full magnitude of the fiscal challenges we face. Even if the policies in this budget succeed in halving the deficit by 2009, deficits will shoot up again after that due to rising entitlement costs and the permanent extension of expiring tax cuts. This fiscally irresponsible combination produces an exploding cigar effect timed to go off just when the baby boomers begin to receive Social Security and Medicare at the end of the decade. Given the known demographic challenges, and the fiscal hole we’re now in, a longer outlook and a more ambitious deficit reduction goal ? preferably getting back to a balanced budget ? would be far better,” said Concord Coalition Executive Director Robert L. Bixby.

This being both a presidential and congressional election year, I do not have any hope that anything will be done to hold spending in check. In fact, if I had to put down a bet right now, I would bet Congress will not even finish its budget work for this fiscal year before the November elections. I am already expecting a lame duck session to clean up the loose ends – again.

International Business Development

U.S. Export and Import Trade Statistics
By Harold Zassenhaus, WMMA® Export Director, (zemg@erols.com)

The following is a summary of major trends of U.S. import and exports for 2003. Statistics are reported for all woodworking equipment and its three component parts: machines, cutting tools and, accessories and parts.

(WMMA® members: to view detailed tables on U.S. imports and exports of machinery, cutting tools and parts and accessories, click here /www.wmma.org/members/inter_bus.cfm). You will need your user name and password. If you don’t have one or forgot it, contact WMMA® Headquarters at 215-564-3484 or email wmma@fernley.com).

Harold Zassenhaus is available to provide U.S. export and import data on specific product categories. For more information, contact him at (301) 652 0693; fax (301) 986 1389 or e-mail: zemg@erols.com

Canada continues to consume about 44% of our exports. However, for the first time since we have been monitoring trade statistics, exports of cutting tools exceeded sales of machinery. About 42% of what we sell is made up of cutting tools, while machinery now accounts for about 38%, and parts and accessories the remaining 20%.

2003 was a particularly bad year for Mexico, as exports to our second largest consumer plummeted, mostly due to a decline in machinery sales of 32% or $4 million.

Exports to South America also declined. However, the 15% drop was principally due to a return to a normal of exports to Chile, from its $8 million spike in 2002.

Exports to Australia and New Zealand increased dramatically in 2003. Combined exports totaled over $15.7 million, and shipments of woodworking machinery and cutting tools each increased by over 40%.

Sales to Western Europe remained about the same. Drops in shipments to Germany, Italy and France were made up by sales to the United Kingdom, Belgium, Netherlands, Portugal and Ireland.

Woodworking equipment imports, for the third straight year, increased by about 9%. And for the past several years, imports from East Asia outpaced imports as a whole. In 2003 they increased by slightly over 10% with Taiwan and China accounting for 45%, or $602 million. Again, imports from China grew at a faster rate than any of the ten top suppliers --- in 2003 it was by 46%. Over 90% of Chinese imports were of smaller machinery used by hobbyists or in light commercial trade.

Purchases from Western Europe increased 8% in 2003, despite a falling dollar in the last two quarters. There were some indications that the quantity of machinery coming from Western Europe slacked off in the 4th quarter, perhaps as importers reacted to the softening dollar by making fewer purchases in the last quarter and/or increasing purchase in the previous quarters in anticipation of a falling dollar. On a dollar basis, imports from Italy and Germany each rose by more than the average, and more than offset the 28% decrease in imports from the UK.

Imports from South America, made up almost exclusively from Brazilian woodworking equipment, increased to over $11 million, a 144% increase over 2002. Cutting tools accounted for $8.5 million or 76% of the total, growing by 375%.

Popular WMMA®/AWFS®
Foreign Buyer Program Gears up for IWF

AWFS® and WMMA® once again will be awarding up to 24 foreign representatives and users of woodworking equipment and/or furnishings supplies $1,500 each to visit IWF August 26-29, 2004 in Atlanta to meet with member firms. A joint screening committee will select the most qualified nominees from a pool of candidates submitted by AWFS® and WMMA® members.

We Need You! Nominate a favorite dealer who is looking for U.S. lines or a buyer with a short list that not only includes your equipment but possibly that of your colleagues. Strengthen your relationship by increasing face time and giving him the funds to see you. Help your colleagues by exposing them to strong and qualified dealers and buyers.
Each member company can nominate up to three representatives handling their lines in other countries or potential buyers interested in your equipment. (You do not need to be an IWF exhibitor to participate.) Click here for a nomination form.

“This is a really great program for Central and South American countries because USA companies can sell technology and new products to Latin Countries. It is great for us (Mexicans) to show Americans that we are serious trading partners. Of course we help each other.” - Gabriel Moreno

Plenty of Chances to Meet with Top Notch Foreign Dealers and Buyers!

WMMA® and AWFS® are arranging a number of opportunities for you to meet the selected recipients:

•  Months before they get here, we will have their profiles on the two Association websites so you can know who they are, where they come from, what lines they carry (or what products are on their short list), and how to get in touch with them.
•  Dealer Day. After a brief welcome and orientation, the delegates will be allowed on the floor to meet with you. Contact them beforehand to make sure they carve out the time to see you.
•  During IWF the foreign buyers will be touring the exhibit halls and using the International Visitors Lounge (located by the registration area) as a home away from home. Again, great opportunities to meet with them at your booth or in the lounge where translators are available and there is a more relaxed atmosphere. If you want to track down one or more of the buyers during show hours, come by the lounge and our assistants will help you hook up.
•  Reception. One night (to be determined) AWFS® and WMMA® will host a reception just as the exhibit hall closes during which each delegate will be recognized. All member exhibitors are invited --- once more an opportunity to meet these “high potential” people.

" Mikron is definitely in a better position because of this program.”
- Lynn Arbuthnot, Mikron Woodworking

“[We] established a new dealer in Mexico City and made contacts with other potential dealers.” - Tom Orlando, CTD Machines

Don’t delay! A joint committee will be reviewing nominations based on the date received. Awards will be made in two stages: the first on April 21st and the second in late May or early June. We want to be sure to give the foreign buyers and members plenty of time to exchange information and arrange their schedules.

If you have questions contact:
Harold Zassenhaus, WMMA® Export Director at tel: 301 652 0693; fax: 301 986 1389, Email: zemg@erols.com.

Foreign Buyer Program – An Asset to our Company

By Michael Cartwright, Morris Wood Tool, (michael@morriswoodtool.com)
Downloadable version

Dear Fellow WMMA® Member:

On behalf of the WMMA®, we wish to remind you of an outstanding member benefit opportunity. It requires no investment on your part, other than the expense of attending the upcoming IWF, yet it could pay dividends to your company for years to come.

Of the many valuable services offered by WMMA®’s international business development initiative, our company has derived particular benefit from its participation in the Foreign Buyer Program. Thanks to the generous travel sponsorships awarded to our client nominees, we were able to solidify productive new distributorships in two countries. One of these became a top customer within a few months of our first face-to-face meeting, at AWFS®. The other has stimulated Latin American sales in a way not seen since our company’s involvement in the construction of the Panama Canal!

For us, the Foreign Buyer Program has been a great discovery. Having taken full advantage of what it can offer, we encourage any company interested in expanding its market globally to do the same. Please consider your foreign customers, new or established, as potential candidates. Nominations for this year’s awardees, to be hosted in conjunction with IWF, in August, are being accepted now. For further information, contact WMMA® Export Director, Harold Zassenhaus, at (301) 652-0693 or zemg@erols.com.

Thank you for your consideration of this estimable program.

Sincerely,

Michael G. Cartwright Richard L. Goan
President General Manager

Cost Cutting Solutions for WMMA® Members

WMMA® Shares the Results of Employee Benefits Survey

This important survey conducted in January 2004 marks the beginning of an exciting new offering for WMMA® members. The wheels are in motion to provide an entire package of cost-cutting solutions for your company. View the results! See how your company compares. Member username and password required.

Industry Information

Quarterly Economic Trend Report Now Available for Q1 2004

Accurately forecasting the future of your business is critical to maximizing your bottom line performance. In an effort to give members a competitive advantage, WMMA® has partnered with the Institute for Trend Reasearch (ITR) to provide you with the tools to stay at least one-half business cycle ahead in your business planning process. This glimpse into the future will enable you to appropriately plan for the ups and downs in the marketplace. See http://www.wmma.org/members/efreports.cfm for more details.

Association News

New WMMA® Committees Meet, Envision, and Strategize

On February 10th, new and old WMMA® Committees met to plan their programs, their vision, their mission, and their role within the Association. Take a look at the new direction of our Committees, and contact Headquarters or the Committee Chair to get involved.

BUSINESS DEVELOPMENT COMMITTEE

Purpose: To provide identified management tools and information to member companies which allow them to better develop their businesses. The Business Development Committee looks at the profit and cost sides of business; provides guidance to members in finding new sources of revenue; and supplies members with programs enabling increased efficiency and profitability.

Programs:
1. Competitive Business Models
Programs will educate members on the alternative business models being used by a variety of manufacturing corporations and the benefits and draw backs of these models. Additional programs will expose members to business planning tools they can use to grow or expand their business. i.e.

• Market Segmentation
• Strategic Planning
• Corporate Strategies
• International Strategies
• Systems Marketing
• Line Leveraging
• Joint Venture

2. Industry Information
Programs will provide members with pertinent industry statistics and professionally developed Economic Forecasts and reports. Key programs include the free WMMA® quarterly Industry Economic Forecasts and a low cost way for members to purchase their own customized analysis using the unique characteristics of their business.

If you are interested in participating, please contact WMMA® Headquarters, or Chairperson Tom Anderson at t.anderson@safetyspeedcut.com.

INTERNATIONAL BUSINESS DEVELOPMENT COMMITTEE

Purpose:
To provide programs and assistance to WMMA® members, promoting expansion of their business models to include opportunities beyond U.S. borders.

Programs:

• Organizing and assisting participation in foreign market trade shows
• Bringing foreign dealers and buyers to IWF and AWFS shows
• Providing information on foreign markets, dealers, translation services, customs
• regulations and exporting procedures
• Support / reform public policies that will benefit membership
• Provide personalized information and assistance through the services of Harold Zassenhaus
• Participation in the Export Trade Certificate allowing members to work together on foreign projects which might normally be hindered by the bounds of Anti-Trust guidelines.

Future projects will also include providing a comprehensive reference manual covering the export process and the investigation of outsourcing and alternative partnerships with foreign companies.

This Committee is at full capacity at the moment, but for more information please contact Chairperson Tim Brown at tbrown@mereen-johnson.com.

MANUFACTURING STRATEGIES COMMITTEE

Purpose:
To present educational opportunities to member companies in existing and emerging manufacturing techniques.

Programs:
We plan to explore such topics as Lean manufacturing, E-technology, Kaizan and Six-Sigma. We also plan to provide information and guidance for common sourcing of components from both domestic suppliers and sources outside the US.

If you are interested participating, please contact WMMA® Headquarters or Chairperson Jim Arvin at jima@duboisequipment.com.

MEMBERSHIP SERVICES COMMITTEE

Mission Statement:
To strengthen WMMA® membership participation, retention and recruitment by developing, implementing and supporting new and existing membership benefits.

Programs:
The Committee makes suggestions, observations, and recommendations about membership benefits and activities to the Board of Directors. It promotes existing membership benefits directly to the membership, and promotes our members products to the woodworking marketplace through advertising.

If you are interested participating, please contact WMMA® Headquarters or Chairperson Ed Fiantaca at ed@accurate-technology.com.

PUBLIC POLICY COMMITTEE

Purpose:
To give direction to WMMA® Legislative Counsel in representing the Associations' position on legislative and regulatory matters affecting the industry, as well as keeping members informed of developments that will impact their businesses.

Programs:
Our Committee is working hard to increase the awareness of our elected officials of the issues our industry is facing. The goal is to keep member companies strongly supported in the U.S., and to keep America working.

The Committee visits Washington DC each year to be briefed on the issues, and then goes to the Hill to meet Senators and Representatives in person. We go there knowing that we are representing over 200 woodworking manufacturing companies across the U.S., including you! This year, we invited all members to go to The Hill and had enormous success. Each member who visited with their officials had a story to share of great promise.

Your efforts within your own community and company can help to save American jobs and to keep America growing. We welcome your interest in the Association’s strong pro-manufacturing initiative, and your presence on our dynamic Committee.

If you are interested in participating, please contact WMMA® Headquarters, or Chairperson Mark Chappell at info@dodds.com.

RESEARCH AND ENGINEERING COMMITTEE

Purpose:
To educate and assist members with issues related to 1) existing and new standards, 2) product liability risk management, and 3) safety and health aspects of emerging engineering technologies.

Programs:
The Committee continues in the oversight of the ANSI 01.1 Standard. This general standard has been revised and submitted to ANSI for review and publication. Sub-committees of the ASC O1 group are developing several machine specific standards.

We are supporting development of the Wood Products Industry Skill Standards.

We are working jointly with the International Business Development Committee to bring together existing and new reference material for use by members when exporting machinery. This Export Guide will be available at the WMMA® website.

The Committee will coordinate educational workshops for our members on topics such as ergonomic considerations in machine design.

We will update material on a regular basis that our committee has developed in the past, including the User Manual Guideline and the Safety Sign & Label Guide.

If you are interested in participating, please contact WMMA® Headquarters, or Chairperson Kathy Wettschurack at kathy@tylermachinery.com.

WMMA® Members In the News

WMMA® Vice President/President of Carter Products Makes NAM News

Peter Perez proves that when you feel passionately enough about something, the right people start to listen. This Michigan-based business leader and WMMA® Officer is making a difference in his state and beyond for the future of U.S. manufacturing.

Appearing the week of March 15th as the lead story on the National Association of Manufacturers’ (NAM) website, www.nam.org, is Mr. Perez’ success story in making meaningful contact with his elected officials in Washington DC. To read the entire story, click here
http://gm-namlive.syscomservices.com/s_nam/doc1.asp?CID=375&DID=230482

If you or someone from your WMMA® member company has appeared in the news lately, whether local or national, please forward the piece with some background information to jconey@fernley.com. WMMA® looks forward to promoting the good press you and your member company are receiving.

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