Business Briefing

The Good Ride Will End
By Art Raymond, A.G. Raymond & Company, Inc., araymond@raymondnet.com

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It is going to happen. Maybe not this year, but at some point in the future, the housing boom will end. With it will go the engine of growth for the U.S. economy. Nearly 40% of all jobs created in the last two years are attributable to housing. Higher home prices have supported strong consumer spending through cash-out refinancing. Over the past four years, this combination of consumer spending and residential construction has accounted for 90% of GDP growth.

What has driven this so-called housing bubble?

• Low interest rates and loose mortgage underwriting standards have enabled more buyers to qualify for mortgages.
• High price appreciation and beneficial treatment of profit from the sale of a home have shifted investment demand from stocks and bonds.
• Deductibility of mortgage interest has lowered the total cost of ownership.

Home ownership is part of the American dream. A home is the largest asset most of us own, and that asset has been remarkably free of price declines. The average price of a house in the US has not fallen since the Great Depression.

But beware these danger signs:

• 25% of all home buyers in 2004 made no down payment.
• 23% of all houses were bought in 2004 for investment with another 13% purchased as second homes – these investors are more likely to sell than owner-occupiers.
• Sales of new and existing homes have set records for four straight years.
• Prices have appreciated since 2000 at three times the annual average over the prior 32 years.
• The ratio of home prices to rents is 35% above the 1975-2000 average. Rental yields therefore have fallen below current mortgage rates making it difficult for landlords to make money.
• Home prices are rising much faster than other prices. Wages and salaries simply are not keeping up.

Like dot.com stocks in the last equity market boom, real estate values must revert to their mean rate of growth. Tightening liquidity from higher interest rates, or an economic bump from higher oil prices, or the impact of bad weather, could disqualify first-time home buyers. Investors whose rental incomes do not cover costs will lose patience and sell. To achieve market equilibrium, falling demand will necessitate falling supply.

The remodeling boom will also subside. As reported earlier in Business Briefing, spending on projects to up fit existing homes has reached record levels in recent years. Many wood products are used in these projects. Among the top ten list, new kitchens, siding replacement, decks, window replacement, and attic bedrooms all need wood resources. The average kitchen remodel costs $15,273 with a large percentage going for new cabinets.

Bottom Line: It is not a question of if the housing boom ends, it is when. If your company has prospered from the recent housing boom, it is time to think about what happens when fewer cabinets, wood floors, windows, and doors are needed. Like a good Boy Scout, a manager should always plan for future possibilities, like it or not.

Where Goes China?

While you are contemplating your future, do not forget China. As everyone in the wood industry knows – as China goes, so goes our world.

According to the Financial Times China’s future and its’ place in the world economy will unfold in one of four scenarios:

• Global Economic Partner – In this scenario, China builds a thriving middle class with huge demands for consumer goods, high tech gear, entertainment, and the like. If so, China not only continues as an exporter, but also becomes a sizable market for U.S. made goods and services – Dell computers, GM cars, Kraft foods, and Proctor & Gamble personal products. Many see recent history in China as confirming this scenario.

• Global Economic Predator – What if China becomes a protected market continuing to export but buying little in the way of value-added imports? This model was the driver for success in South Korea during the 90’s. Labor costs and exchange rates were controlled while domestic demand was satisfied by domestic production. Experts see this scenario being tempered by inevitable labor unrest as workers demand better incomes and currency devaluations in China’s markets causing their exports to become too expensive.

But with China’s size, its predator approach over 10 to 20 years would disrupt the economies of the U.S. and other developed countries. Markets for Western goods would not evolve. Chinese producers would move up-market and expand competition in Western markets. Huge domestic markets would enable scale efficiencies and drive costs even lower. China would probably ignore intellectual property rights, trade secrets, and patents. Masses of well-trained engineers and scientists would provide home-grown innovation.

If confronted by this scenario, U.S. companies must (a) share only the intellectual property that it can protect or afford to lose, (b) realize Chinese demand for their products are reduced, (c) consider what U.S. industries can be saved and invest appropriately, and (d) understand that Chinese opportunities are based on management expertise.

• Slow-Growing Global Participant – This outcome occurs if bringing their huge population into the world marketplace is more complex that Chinese officials anticipate. This scenario results if access to critical resources and raw materials is limited, an infectious disease pandemic breaks out, or a combination of corruption and environmental decline occurs. In short, this result requires the loss of control by the Chinese government.

• Frustrated, Unstable Outsider – This outcome develops if the integration of the Chinese population into the world economy moves slower than expected. In this case, the Chinese government may enforce desperate measures to maintain control ala North Korea albeit much bigger. Such developments in the world’s most populous country must be taken seriously. Usually such unrest brings adventures abroad, in this case perhaps a move to annex Taiwan. Recent proclamations that China will employ nuclear weapons if the U.S. interferes with its interest in Taiwan are worrying.

Experts claim that China can avoid such unrest by dumping some of its massive holding of U.S. dollars. That move would, of course, disrupt our economy via a substantial decline in the dollar.

If events in China affect your company, you should prepare. First, list the happenings outlined above that impact your business. Then, consider the risk or probability that such events will occur. Finally, prepare a plan for the higher risk events.

What do you think will happen in China?

Katrina’s Impact On The Forest

On September 20th, the U.S. Forest Service estimated that Katrina damaged 19 billion board feet of timber in Mississippi and Alabama. Forty percent of that total is hardwoods. Slightly damaged trees take years to die. A study of past storm damage in South Carolina show that nearly one third of the forest was injured. Based on that information, the Forest Service estimate may understate the loss by 50%.

Salvage operations will recover some of the damaged footage. However, the recovery rate of hardwoods in the South Carolina study was only 18% of the blown-down trees. Softwood timber recovery ran 70% in South Carolina. Remember that sizable softwood stocks are on actively-managed timberland versus the smaller private holdings where hardwoods are found.

Note, too, that fallen softwood loses value faster than hardwoods. For that reason, salvage operations will focus first on recovering valuable Yellow Pine logs. This timing may result in shortages of hardwood logs at sawmills. Since much of the Southern forests are Red Oak, this situation may bring higher prices to that depressed species.

Stay tuned as this situation evolves.

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Economic Factoid

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Sector Report

Kitchen Cabinets

Cabinet sales rose 11.1% in August vs. the same month in 2004 according to the KCMA’s Trend of Business Survey. For the first eight months of 2005, sales were up 14.0%.

• Medallion Cabinetry announced the development of a new plant in Culver, IN. The 275,000 square feet plant is expected to employ 330 people and utilize state-of-the-industry technology for manufacture of semi-custom cabinets.

Home Furniture

Furniture Markets

The long-awaited Las Vegas Furniture Market opened its doors for its inaugural show in early August. The event reportedly drew 62,000 visitors which compares to about 70,000 at the rival High Point Market. Las Vegas operates in 2.8 million square feet versus 12 million square feet in High Point. Vegas officials project construction of additional space to match High Point’s total.

Interestingly, attendance at High Point’s September Pre-Market fell significantly. Buyers attending this informal event preview and comment on new product introductions set for the regular October Market. Some cited market fatigue given the timing of pre-market, the new Las Vegas Market, and the Tupelo, MS, show. Many exhibitors, who now import much of their product, no longer have time to tweak their designs in time for the formal market. As a result, large furniture makers such as Lexington Home, Flexsteel, and Klaussner plan to discontinue High Point pre-market. Many others remain non-committal.

With the Las Vegas Market and its many attractions now in the mix, a shake-out in the furniture market calendar and sites is no doubt in the offing. At the end of the day, the buyers will drive this rationalization.

Costs Higher For Foreign Producers

Chinese factories are reporting concern about the higher cost of petroleum products and some raw materials. Managers are bemoaning rises in utilities, finishing materials, metal, and transport. In addition, the costs of Asian woods such as rubberwood have risen by 45% over the last year. This situation bodes well for U.S. hardwood suppliers whose prices have remained relatively stable during that period. One major producer indicated that their use of U.S. lumber would increase by 50%.

Higher utility costs will most likely be accompanied by more frequent brownouts that force factories to cease production. With delivery reliability an increasingly important factor to U.S. buyers, production disruptions will translate into higher inventories.

Higher oil means higher shipping costs. On October 1, an emergency bunker adjustment factor will add $45-50 to the cost of a 40-foot container. This addition comes on the top of the $150 surcharge that occurred in July. Fuel surcharges for inland container transport have also risen by $40-140.

At the company level, results remain mixed…

• Canadian producer Dorel Industries will close its Ameriwood ready-to-assemble plant in Wright City, MO. About 300 workers will be idled. Management acknowledged that its recent growth was attributable to Dorel Asia, its import division. This closure also confirms the maturation of the RTA industry, which was one of the few bright spots in domestic furniture manufacturing over the last 15 years.

• Casegoods producer Hooker Furniture is closing its Pleasant Garden, NC, plant. The 300,000 square foot plant employs 280 people, 16% of the company’s workforce. Products will be shifted to their Martinsville and Roanoke, VA, operations.

• Ethan Allen reported positive sales trends in its 1Q2006 with incoming orders outpacing last year. Analysts noted that this report is not indicative of residential furniture demand across the industry.

The company also announced the conversion of its Dublin, VA, plant to a regional distribution center. The 570,000 square foott manufacturing plant, which was acquired from Pulaski Furniture in 2000, will house distribution operations currently located at its Old Fort, NC, plant. About 250 of the plant’s 325 jobs will be lost. Ethan Allen now has eleven plants, five making casegoods, five making upholstery, and one assembling accessories. Combined these operations use about 3.5 million square feet.

• Furniture Brands International announced the consolidation of two upholstery plants in High Point, NC. These plants were operated by the HDM division that includes Henredon, Drexel Heritage, and Maitland Smith.

• Bassett Furniture reported a 5.3% gain in its 3Q2005 sales with operating profits jumping 67.2%. Leading the improved performance was a 12% rise in shipments to its’ Bassett Furniture Direct retail stores. Through its first three quarters sales rose 4.7%, and gross margin increased to 28%. Bassett now operates 127 BFD stores which account for over two-thirds of its total shipments.

The company also announced the closure of its 540,000 square foot Mt. Airy, NC, casegoods plant. About 300 employees will be affected. BFI’s plant in Bassett, VA, will assume manufacture of the Mt. Airy products. Management estimates that the closure will save $4-5 million annually in labor and overhead costs.

• Lexington Home Brands of Lexington, NC, is closing its Plant 2. This shutdown will leave the company with only two plants and will idle 360 workers.

• La-Z-Boy announced the closing of its only Canadian upholstery plant, a 400,000 square foot facility in Waterloo, Ontario. The shutdown will result in the loss of 413 jobs. Products will be shifted to plants in Neosho, MO, and Dayton, TN.

A tornado spawned by Hurricane Rita damaged the company’s Newton, MS, plant. This operation employs 200 workers and produces wood parts for upholstered furniture. No injuries were reported. Management is assessing the damage and possible repair plans.

Office Furniture

BIFMA reported that August orders increased by 16% and shipments grew 7% versus the same month in 2004. Analysts indicate that this performance shows the industry remains in the recovery mode. On a trailing twelve-month basis, orders grew 9.4% to about $9.7 billion. Likewise, shipments jumped by just over 10%. At $9.66 billion, annual shipments are now about 14% higher than the market bottom of $8.47 billion in November 2003. As orders have outpaced shipments, industry backlog has grown. Analysts commented that the industry’s prospects are underpinned by solid commercial construction activity (see below), improving employment, and declining office vacancy rates.

Producer level reports are also positive…

• Steelcase reported an 8% increase in its 2Q2006 sales year over year. Gross margin, benefiting from the higher volume, expanded to 31.6%, up from 30.2% last year. Operating profit rose to 5%. Analysts are predicting continued strong sales growth in the 3Q.

• Herman Miller announced that 1Q2006 sales grew by 20.6% year over year. Orders increased by 28.9%. Gross margin rose to 32.9%. Accompanied by a decline in SG&A expenses, operation profit jumped 9.1%.

Wood Flooring

July 2005 shipments of strip flooring fell 4.8% from June but rose by 5.5% over July 2004. For the first seven months of 2005, shipments are down 1%.

Non-Residential Construction

The pace of activity in this important sector is looking up. Spending for office construction, flat over the last 16 months, is projected to rise by 30% over the period through 2006. Construction of manufacturing plants jumped 25% in the last half of 2004 and has remained at that level through the first half of 2005. With factory capacity utilization now over 80%, experts project spending on new plants to increase another 20% by the end of 2006. Three industries have accounted for most of this spending: electronics, transportation equipment, and food/beverage.

Public Policy

Katrina and Rita
By John Satagaj, WMMA Legislative Counsel, email@jsatlaw.com

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First, it is important to acknowledge that the industry members who were directly affected by Katrina and Rita are on our minds and in our hearts. Some of the things we report on in Washington seem so insignificant when compared to the more immediate challenges ahead for our colleagues and their families. Katrina and Rita will have a significant impact on the short-term agenda in Washington. Direct relief assistance legislation has been and will be the first order of business. We do expect subsequent rounds of direct and indirect assistance. At this point, it is difficult to predict what those of us not directly affected by Katrina and Rita can expect.

Consideration of an estate tax repeal bill by the Senate has been postponed indefinitely. The obvious reason was that it seemed inappropriate to discuss tax relief of this nature before Congress addressed the immediate needs of those affected by Katrina. It may not have been all bad to have the day of reckoning postponed. We saw no evidence, as we have been reporting for some time now, that there were 60 votes for repeal. Arguably, this gives us time to regroup. In reality, we would be surprised if the Senate returns this year to the subject of estate taxes. There are some serious divisions, even in the Republican Party, about whether to repeal the tax, lower the rate, or increase the exemption. In addition, the expenditures on Katrina and Rita will cause some to question whether this is the time to reduce federal revenues.

There could be several tax relief bills this year. Congress has the “right” to consider the tax reconciliation bill. You will recall this is the legislation the Senate can approve by a simple majority. They can do this because they passed a budget resolution earlier this year that earmarked $70 billion in net tax relief. We had thought a further extension of the temporary increase in the direct expensing allowance, a further extension of the temporary cuts in capital gains and dividends taxes, and a further extension of the temporary relief from the personal Alternative Minimum Tax were the primary candidates for inclusion in the tax reconciliation bill. You may recall the budget reconciliation process does limit Congress to a five-year window, so we did not expect estate tax repeal to be included.

The plan was to have tax reconciliation follow spending reconciliation, and realistically, the earliest we could expect a tax reconciliation bill is early November. Congress may decide that long-term tax relief for Katrina- (and Rita-) related rebuilding is more appropriate than, for example, extension of the temporary cuts in the capital gains and dividends rates. For that matter, there is some talk of foregoing consideration of the spending reconciliation bill, which would have made cuts in entitlement programs such as Medicaid.

EMPLOYEE LEAVE DONATIONS

The Department of the Treasury and the Internal Revenue Service have announced special relief intended to support leave-based donation programs to aid victims who have suffered from the extraordinary destruction caused by Hurricane Katrina. Under these programs, employees can donate their vacation, sick, or personal leave in exchange for employer cash payments made to qualified tax-exempt organizations providing relief for the victims of Hurricane Katrina.

Under Notice 2005-68, employees can forgo leave in exchange for employer cash payments, made before January 1, 2007, directly to qualified tax-exempt organizations providing relief for Hurricane Katrina victims. While employees will not be entitled to a charitable deduction, employees will not have to include the donated leave in their income. (This also means there are no W-2 reporting requirements.) Employers will be permitted to deduct the amount of the cash payment as a regular business deduction, rather than under the more limited business charitable deduction rules.

MILEAGE DEDUCTION INCREASE

The Internal Revenue Service has approved an increase to the optional standard mileage rates for the final four months of 2005. The rate increased to 48.5 cents a mile for all business miles driven starting on September 1 and will continue until December 31, 2005. This is an increase of 8 cents from the 40.5 cent rate in effect for the first eight months of 2005. The new four-month rate for computing deductible medical or moving expenses will be 22 cents a mile, up from 15 cents for the first eight months of 2005.

FIRST KATRINA TAX RELIEF BILL

The first Katrina tax relief bill is now law. While most of the provisions are specifically for use by individuals and businesses in the affected area, some are to encourage help from outside the affected areas.

The new law creates a special tax deduction for individuals who provide rent-free housing to dislocated persons for at least 60 days. The deduction is $500 for each dislocated person housed in the individual’s principal residence (up to a maximum of $2,000). The deduction can be claimed in either 2005 or 2006, but cannot be claimed in both years with respect to the same person.

Under current law, individuals may deduct charitable donations up to 50 percent of their adjusted gross income. Deductions for charitable donations are further limited by the phase-out of itemized deductions. Under the new law, cash donations to charities are exempt from the 50-percent income limitation and the phase-out of itemized deductions if the donations are made before January 2006. Under current law, corporations may deduct charitable donations up to 10 percent of their taxable income. The new law waives the 10-percent income limitation for cash donations related to Hurricane Katrina if the donations are made before January 2006.

Under current law, employers are allowed to claim the Work Opportunity Tax Credit (WOTC) if they hire individuals from certain target groups who are considered to face barriers to employment. The credit generally equals 40 percent of the first $6,000 of wages paid to the employee in the first year (i.e., the maximum credit is $2,400). The proposal temporarily creates a new target group, under the WOTC, called Hurricane Katrina employees. The target group is comprised of individuals who, prior to the hurricane, lived in an area that is now eligible for individual and public assistance under the Stafford Act. Employers located in an area that is eligible for such assistance may claim the WOTC with respect to Hurricane Katrina employees hired over the next two years. Employers located outside of this area may claim the WOTC with respect to Hurricane Katrina employees hired through the end of the 2005 calendar year.

Manufacturing Strategies

The MEP Network - http://www.mep.nist.gov

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MEP stands for the Manufacturing Extension Partnership. MEP is a nationwide network of not-for-profit centers in nearly 350 locations nationwide, whose sole purpose is to provide small and medium sized manufacturers with the help they need to succeed. It is a resource you should get to know. Some members have already worked with their local MEP to reduce waste, enhance plant floor layout, increase throughput and adopt new manufacturing technolofgies.

You may be more familiar with your local MEP center many times located on the campuses of Universities, Community Colleges, etc. Examples include the Illinois Manufacturing Extension Center (IMEC), the North Carolina Manufacturing Extension Partnership, the Michigan Manufacturing Technology Center or California Manufacturing Technology Consulting.

The centers, serving all 50 States and Puerto Rico, are linked together through the Department of Commerce's National Institute of Standards and Technology. Centers are funded by federal, state, local and private resources to serve manufacturers. That makes it possible for even the smallest firms to tap into the expertise of knowledgeable manufacturing and business specialists all over the United States. These specialists are people who have had experience on manufacturing floors and in plant operations.

Each center works directly with area manufacturers to provide expertise and services tailored to their most critical needs, which range from process improvements and worker training to business practices and applications of information technology. Solutions are offered through a combination of direct assistance from center staff and outside consultants. Centers often help small firms overcome barriers in locating and obtaining private-sector resources.

Since its inception the MEP has assisted over 149,000 firms. MEP was appropriated $109 million for the fiscal year 2005 operating year.

MEP Center Locations
Below is a map of MEP center locations.  Click here to view a text list of centers by state. Visit http://www.mep.nist.gov/ or call their toll-free number 1-800-MEP 4 MFG (1-800-637-4634) and your call will be automatically routed to the MEP center that serves your region.

Products & Services

Lean: A Lean Enterprise produces more with existing resources by eliminating non-value added activities.

Strategic Management: Strategic Management - planning and executing business strategies through people, processes and technology - is a powerful competitive weapon that too few executives use to their advantage

Quality: Quality Systems encompasses everything from product design to distribution of finished products.

Growth Planning: Growth planning focuses the company on what it needs to do to expand profitably, based on innovations in product, process, service and/or business model.

Environmental: For over a decade, MEP consultants have helped companies avoid wasting materials and energy.

Human Resources/Organizational Development: MEP recognizes the impact that people, culture, and skills have on the competitive abilities of small and medium-sized manufacturers.

Adoption of Emerging Technologies to include Environmentally Friendly Manufacturing (WEEE and RoHS Directives) and Radio Frequency Identification (RFID)

Spotlight on Member Benefits

Editor’s Note:  This is a new section of The Cutting Edge.  It will highlight various benefits available to the WMMA membership.  This first issue will focus on Business Cost Containment Solutions for Association Members, specifically an e-Healthcare Insurance Solution.

As most members are aware, your WMMA Management Team, in conjunction with CommonWealth Professional Group (CPG), has been working on various Business Cost Containment challenges from health insurance costs, as a top priority, to other Property and Casualty coverages, such as Workers’ Compensation. The next few issues of The Cutting Edge will to feature some “solutions” in these areas for your review. Please try them and see if they help reduce the costs within your business. The E-Health platform is an attempt to assist members across the country, but we suspect that doctor networks and pricing could still be a challenge in certain regions.

Introducing An E-HealthInsurance Solution To WMMA Members
By Tim Foy, Common Wealth Professional Group, tfoy@cpgins.com

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There is no national healthcare solution, as healthcare tends to be regional in nature. However, please try the online quote system referenced below and take advantage of the comparisons offered. CPG considers this a “testing phase” and would like your feedback.

 This e-platform has up to 140 insurance companies and claims to deliver quote options of five plans with multiple companies. There are toll-free numbers available for a client anywhere in the nation to speak directly with a licensed agent. Keep in mind there is NO CHARGE if the member uses the toll-free numbers on the website for eHealthInsurance representatives.

If some members are concerned with obtaining an “independent consulting” view, Timothy Larkin, of CPG, is available upon a paid basis to review your current healthcare program. compared to the various quotes. This personal, independent review option is available by faxing (610.370.2779) the proposals to Tim Larkin, who will review these proposals at the rate of $20.00 for every 15 minutes of time needed.

To access this website, please click onto CPG’s website at www.cpgins.com and look for “Applications” (bottom left tool bar) and click “WMMA.”  Next, click on the eHealthInsurance link, where you enter your zip code and begin.

eHealthInsurance
Save on health insurance by comparing health plan benefits and prices from leading carriers nationwide. Coverage available for businesses, sole proprietors and individuals -- offering instant quotes, best prices and personalized service.

Compare Health Plans Online With eHealthInsurance
Save on health insurance by comparing health plan benefits and prices from leading carriers nationwide. Coverage available for businesses, sole proprietors and individuals -- offering instant quotes, best prices and personalized service.

eHealthInsurance is a national health insurance agency specializing in helping WMMA members purchase and save on health insurance.

With the experience of having insured more than 300,000 businesses and individuals nationwide, eHealthInsurance represents and offers instant quotes for the broadest selection of carriers, including Blue Cross, Blue Shield, Aetna, United, Anthem, Humana and Golden Rule.

As reported by Suze Orman, "eHealthInsurance offers the largest individual and small-business health plan selection across more states than any other online or offline source." (O Magazine, August 2003)
 
Additionally, the personalized service and online tools that eHealthInsurance provides members makes finding and buying the right health plan easier than ever. According to Kiplinger, "The best part of eHealthInsurance's site is the 'compare benefits' button, which automatically creates a table showing how each policy's features stack up against the other policies' features."

Need assistance? eHealthInsurance's Customer Care is staffed with knowledgeable representatives and licensed insurance professionals that are available to provide assistance before, during and after your purchase.

Member News

Komo Opens a Technology Center in China

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Komo is expanding its reach further in China with the opening of its NEW Technology Center in Nanjing, China in association with PMC China.

The official opening was held on September 21st, 2005 with the General Manager of PMC China, Lewis Young, President of Komo Machine, Charles Zajaczkowski, Executive Vice President of Komo Machine, Jeff Erickson and Distinguished Government Officials. The opening ceremony was filled with speeches and a ribbon cutting ceremony followed by a traditional fireworks display.

Following the opening ceremonies, an open house was held for invited guests and dignitaries. Komo Machine has a Solution Series 510 Traveling Gantry machine located in the facility for training and demonstrations. With a full training and service center, Komo continues its tradition of offering the highest quality machines and superior customer service.

Komo employs a full time sales contact at the center, Mary Ma, who will handle all of China. Kaizer International will continue to be a dealer for Komo Machine in the Aerospace Divsion for all of China and Locus, a new dealer, will be working with Komo in the Guangdong, Guangxi, and Fujian Provinces with wood, plastic, composites and stone applications. Komo is pleased to have them on board.

Demonstrations were run on the Solution machine including Nested Based MDF doors and a nested melamine cabinet demonstration. Applications Technician Steven Mehr also showed the Solution machining aluminum and plastic parts demonstrating the versatility of the machine. Opening the eyes of the onlookers, the Solution impressed with its speed and accuracy.

Komo's NEW Technology Center in China

In association with Komo Machine, Planit Solution's Don Bigelow gave a software demonstration of their new Cabinet Builder software and Paul Roza from Benz Aggregates gave an explanation of the advantage and versatility that aggregates can provide to the machining process.

The Open House proved to be a success. With much interest and excitement, Komo and PMC China look forward to establishing Komo as the premiere CNC Machine Center in China

For more information, contact:
Jeff Erickson, Director of Sales and Marketing
Komo Machine, Inc.
Phone: 320-252-9887
jerickson@komo.com
www.komo.com

WMMA Welcomes Recent New Members

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WMMA welcomes the addition of two new members, Evans Machinery of Glendale, AZ, and Marathon Spray of Torrance, CA.  We also welcome new associate member Wood Industry, a publication of W.I. Media, Inc.

Association News

WMMA-Sponsored Seminar at the TSI Midwest Expo, November 4th: Encourage your Customers to Attend

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Your customers will benefit from attending the WMMA-sponsored seminar, The Role of Tooling in Improving Production, during the TSI Midwest Expo in Grand Rapids, MI, on Friday, November 4th. Please share the details of this seminar with them!

Three WMMA members will present, along with end users, on:

• Cost-effectiveness
• Factors affecting performance,
• Overall benefits of using Thin Kerf saws, insert tooling, and OC tooling.

Topics that will be covered in detail include:

• How to optimize machine performance
• How to find the right feed and speed for your application and machine
• Improving cut quality, consistency and increasing tool life through proper collet and chuck maintenance

End users will give their first hand experiences on using quality U.S. machines to meet their production needs. Plan now to attend!

11:00 AM to 12:15 PM
DeVos Place – Grand Rapids, MI

Reaping the Benefits of WMMA’s Scholarship Program
By Josh Lepinski, WMMA Scholarship Recipient & Student

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My name is Josh Lepinski and I just finished my second summer of interning for Great Lakes Carbide Tool in Peshtigo, WI. I am currently finishing my fourth and final year of obtaining a Mechanical Engineering Bachelor’s degree at Michigan Technological University in Houghton, MI. Through WMMA’s assistance and my employment at GLCT, I have been able to gain first hand experience with the exciting, yet demanding, woodworking industry. This experience has created in me a new level of knowledge and respect for the woodworking and machinery industry that I would never have thought possible.

Great Lakes Carbide provided a fast paced, friendly, and high-tech environment in which to further develop my skills as an engineer and as an employee. Last summer, I was placed with the design team and then advanced to shop training. There I experienced everything from turning stock steel to assembling the finished tool. This summer, GLCT immediately placed me side-by-side with the Product Technician to further develop the new tooling line. Here, I often manufactured the parts themselves in order to develop a more consistent and efficient process. Great Lakes Carbide showed faith in me and tried to learn as much from me as I was learning from them. In fact, they sent three of me on an all day business trip in order to advance the new tooling line.

GLCT offered me a full-time position before the summer was even over. I gladly accepted. The title will be Mechanical Engineer, first of its kind at Great Lakes Carbide. Being the first M.E. at GLCT, a do-all and hands-on approach will be needed, fitting right in with my strengths. Thank you again, WMMA, for this great opportunity. With my new career starting in the spring, I hope to donate as much to the woodworking industry as the WMMA has assisted in my success of building a positive future.

15th Annual Woodworking Industry Conference

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The 15th Annual Woodworking Industry Conference will be held May 3-6, 2006 and is the premier forum for education and networking.  Attending the WIC '06 at the Wailea Marriott Resort, Maui, HI, is the right choice for your business.

The 2006 Woodworking Industry Conference is just months away!  Mark your calendar and begin planning now!

To learn more about the WIC '06, visit http://www.wmma.org/events/wic.cf