Public Policy

Tort Reform On My Mind

By John Satagaj, WMMA Legislative Counsel, email@jsatlaw.com It is clear we will not be able to finish the job this year with respect to one of our priorities – enactment of a federal statute of repose for machinery. But, I believe we can advance the ball this fall, and must advance the ball, so that we might finish the job next year in the second session of this Congress.

We shifted gears slightly over the summer. Representative Steve Chabot (R-OH), with Representatives Henry Hyde (R-IL) and Howard Coble (R-NC) as co-sponsors, has introduced H.R. 3509 the Workplace Goods, Job Growth, and Competitiveness Act. The bill replaces H.R 1363, introduced earlier this year. H.R. 3509 would limit a manufacturer’s liability to 12 years instead of 18 years, as provided for in the earlier version. This was done to eliminate some objections based on the fact that for some states the earlier version would have actually extended liability beyond that for which state law provided. It is hard to argue with an adjustment that shortens our exposure.

The approach of the bill is to prohibit the filing of any civil action against the manufacturer or seller of a durable good for damage to property arising out of an accident involving that durable good if the accident occurred more than 12 years after the date on which the durable good was delivered to its first purchaser or lessee. No civil action may be filed against the manufacturer or seller of a durable good for damages for death or for personal injury arising out of an accident involving that durable good if the accident occurred more than 12 years after the date on which the durable good was delivered to its first purchaser or lessee and if the claimant has received or is eligible to receive worker's compensation.

The bill does not bar a civil action against a defendant who made an express warranty in writing as to the safety or life expectancy of a specific product which was longer than 12 years, except that this bill shall apply at the expiration of that warranty. The bill preempts and supersedes any state law that establishes a statute of repose to the extent such law applies to actions covered by this bill. Any action not specifically covered by this bill shall be governed by applicable state law. The term "durable good" means any product, or any component of any such product, which has a normal life expectancy of three or more years; or is of a character subject to allowance for depreciation under the Internal Revenue Code of 1986; was issued in a trade or business; held for the production of income; or sold or donated to a governmental or private entity for the production of goods, training, demonstration, or any other similar purpose.

Our goal is to secure approval this year of the new version of the bill by the House of Representatives. We think this is a "doable" goal and at the association level we have committed considerable time and resources to this endeavor. We could use your help. You need to secure the commitment of your Representative to support the bill. WMMA has an action alert available if you need it.

While I am on the subject of tort reform, I would like to mention another initiative that is related to our long-standing priority of controlling the costs of health care. Over the summer, the House passed a medical malpractice reform bill, H.R. 5, which would make changes to the health care liability system, including compensation for injured patients and other issues arising out of health care lawsuits. The measure provides for a three-year statute of limitations with certain exceptions for minors, fraud, intentional concealment, and the presence of a foreign body. It provides for a $250,000 cap on non-economic or "pain and suffering" damages. Guidelines governing the award of punitive damages provide that awards not exceed the greater of $250,000 or twice economic damages. Damages are governed by a "fair share" rule, by which damages are allocated fairly, in direct proportion to fault.

The measure reforms current law to allow defendants to introduce evidence showing the plaintiff received compensation for losses from other sources to prevent double recoveries. It provides a safe harbor from punitive damages for: (1) manufacturers of products that are FDA-approved, with exception for those who give false or incomplete information or who make illegal payments, and (2) protects pharmacists and doctors from being named in lawsuits for forum-shopping purposes. In addition, the bill authorizes courts to require periodic payment of future awards over time. The measure limits the fees attorneys can collect on a sliding scale; 40 percent of the first $50,000 awarded, 33.3 percent of the next $50,000 awarded, 25 percent of the next $500,000 awarded, and 15 percent of any award over $600,000.

As we have previously reported, despite bi-partisan interest in the last Congress, the Senate has not been able to rally around a version that can garner 60 votes. While House passage represents progress, the reality is that only a bill that can find a bi-partisan majority in the Senate will become law. If you have an interest in this measure, you ought to drop a line to your Senators and urge them to pass a medical malpractice liability bill.

This Congress has taken some important first steps, such as passing a class-action reform bill, towards restoring common sense to our civil justice system. It is now time for us to encourage them to pass bills that would make a direct difference to your business.

International Business Development

U.S. Restrictions on Imported Wood Packaging Material Takes Effect
September 16, 2005

U.S. Customs and Border Protection (CBP) will begin enforcement of the United States Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS) import regulation for wood packaging material (WPM). The rule requires WPM, such as pallets, crates, boxes, and dunnage used to support or brace cargo, to be treated and marked. In cases of noncompliance, the WPM will be subject to immediate export along with the accompanying cargo.

The approved treatments for wood packaging material are 1) heat treatment to a minimum wood core temperature of 56ºC for a minimum of 30 minutes or 2) fumigation with methyl bromide. To certify treatment, the WPM must be marked according to the standard set by the International Plant Protection Convention (IPPC). Paper certificates of treatment will no longer be required or accepted.

Through a bilateral agreement between the U.S. and Canada, WPM made entirely from Canadian origin wood is exempt from the treatment and marking requirements. In addition to the United States, the Mexican Secretariat of the Environment and Natural Resources (SEMARNAT) announced the regulation to be in effect in Mexico also on September 16th and 120 other countries have also agreed to the IPPC standard, which is designed to reduce health risks associated with pest infestation from wood packaging materials. Implementation dates vary around other parts of the world. For more information, visit the Customs and Border Protection website at http://www.cbp.gov .

US Import and Export Trade Statistics

By Harold Zassenhaus, WMMA Export Director, hzassenhaus@fernley.com The following is a summary of major trends of US exports and imports for the January – June 2005 period. 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 US imports and exports of machinery, cutting tools and parts and accessories, by country click here http://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 US export and import data on specific product categories. For more information, contact him at (215) 564 3484; fax (215) 963 9785 or email:hzassenhaus@fernley.com)

Total Woodworking Equipment Market

Imports of woodworking equipment (machinery, cutting tools and parts and accessories) increased 11% over the first six months of 2005 compared to the same period in 2004. Imports reached $811 million. Imports from Taiwan and China accounted for 42% of the total with imports from China growing more slowly than in prior periods (up 13%) and those from Taiwan continuing to decrease (by 14%). As mentioned in previous export and import trade reports, by the end of the year China will likely be the largest supplier nation of woodworking equipment.

Imports from leading European suppliers, Germany and Italy, continued the first quarter trend of increasing at healthy rates (35% and 19%, respectively).

Exports continued the first quarter trend of slowing down, increasing at less than 3% to $155 million. Canada continues to purchase over 40% of our exports. Mexico, Germany, Australia and Belgium rounded out the top five markets in the six-month period.

Machinery Trade

Imports of machinery totaled $443 million, a 3% increase over the same period in 2004. Imports from both Taiwan and China continued to decline dramatically (15% and 10%, respectively) while imports from our other major suppliers like Germany, Italy, Canada, Austria, Japan and Finland increased.

Exports increased by only 5%. Nonetheless, shipments to our 1 st and 2 nd largest markets, Canada and Mexico, showed healthy increases. Exports to Australia (our 3 rd) continued to suffer but shipments to Germany and Russia found life.

Cutting Tools

Cutting tool imports continued to increase by double digits, rising 21% over 2004 to $248 million. Shipments from China increased 39% to $47 million. As mentioned in the last report, imports of veneer knives from the Czech Republic topped $19 million for the period. Finally, for unknown reasons, Germany dramatically increased shipments by 27% to $33 million.

Exports dropped marginally for the period to $47 million. Canada still accounts for over 50% of shipments.

Parts & Accessories

Exports remained steady at $22 million with shipments to Canada accounting for 67% of the total or $15 million. Exports to Mexico showed some life, growing by 116% to $1 million.

Imports continued the 2004 trend of recording double digit growth as they rose 20% to $120 million. Imports from China continued to outpace all other major suppliers increasing 154% to $25 million. Imports from Germany, our 2nd largest supplier, rose 26% to $18 million while imports from Israel, always a major supplier, rose to $14 million.

AWFS®/ WMMA® 2005 International Buyer Program Results

Thirteen international dealers and buyers in the woodworking equipment and furnishings industries attended The AWFS® Fair 2005 as guests of the Association of Woodworking & Furnishings Suppliers® (AWFS®) and the Wood Machinery Manufacturers of America® ( WMMA®).

The 13 buyers came from eight countries: Australia, Chile, Colombia, Ecuador, Guatemala, Mexico, Panama and Venezuela. The two Associations hosted a tour of members’ booths and a reception on the eve of The AWFS® Fair to stimulate business between the invited guests and members. The international buyer group also had daily access to the AWFS® Fair International Business Center where they met with members.

2005 International Buyer recipients and their sponsors

The objective of the joint association effort, now in its 6th year, is to introduce Association members to qualified, aggressive international distribu tors and buyers, while recognizing the importance that the international dealers play in the marketing of USA products. The 13 companies selected were nominated by at least one AWFS® or WMMA member and final selections were determined by a joint committee. The recipients were chosen on their reputation and either their intention to add more American lines to their supplier base or their interest in buying equipment in the next 12 months, preferably from the USA suppliers. A spreadsheet of recipient data was announced to members in late May and posted on each association website. The spreadsheet not only contained contact information but also included: the lines carried (or specific project information), years in business, number of employees (service and sales) as well as objectives in attending the Fair. Members can still view the spreadsheet by going to http://www.wmma.org/members/secureDocument.cfm?docID=291 on the WMMA website.

The buyers had positive comments about both the program and The AWFS® Fair. About 90% stated they learned of new products that would be of use to them and the same percentage stated they have begun negotiations. All responding to the survey felt they met or exceeded their objectives and expect to attend IWF 2006 and would like to return to The AWFS® Fair in 2007.

The WMMA also surveyed its membership. Unfortunately, the response rate was very low (only 10 responses) and there seems to be a disconnect between the benefits of the program and members actually taking advantage of it. While all stated they felt the program was worthwhile, the overwhelming majority did not make contact with the buyers in advance of the fair despite repeated email notices and website postings beginning two months prior to the fair. Obviously, this is a source of frustration to WMMA’s International Business Development Committee and it will continue fine tuning the program so that more members take advantage of it ---- both in terms of identifying worthy recipients as well as taking advantage of the leads.

The Associations will be calling for nominees for the 2006 program in the beginning of next year.

For further information about the International Buyer Program, or to share your comments, contact Harold Zassenhaus, Export Direc tor, WMMA tel.: (301) 652-0693; email: hzassenhaus@fernley.com.

WMMA Offers Free Workshop on Ex-Im Bank’s Export Insurance Programs

WHAT: Workshop on Ex-Im Bank’s Export Insurance Programs - Your key to short-term financing for your customers

WHERE: WMMA Headquarters, The office of Fernley & Fernley, 100 North 20 th Street, Philadelphia, PA 19103

WHEN: Wednesday, October 12, 2005; 1:00 PM - 4:00 PM

COST: Free. WMMA will even pick up travel and related costs to and from Philadelphia.

SPEAKER: The speaker will be Sharyn H. Koenig, Senior Business Development Officer, Ex-Im Bank

WHO SHOULD ATTEND: CEO’s, Presidents, CFO’s, Marketing and International Marketing and Sales Managers

WHY:The mission of the Export-Import Bank of the United States (Ex-Im Bank) is to support the financing of U.S. goods and services, turning export opportunities into transactions. As an independent U.S. government agency, Ex-Im Bank assumes credit and country risk that the private sector is unable or unwilling to accept. Their products fill financing gaps, allowing U.S. exporters to break into new markets and increase their export sales. No letters of credit are required; plus you have the ability to discount the account receivable with your bank and get immediate payment.

One of the most important products for the smaller U.S. exporter seeking short term (up to 1 year) accounts receivable financing is their family of Export Credit Insurance Policies. This workshop is designed to:

• Expose members to these valuable tools: Multi-Buyer, Single-Buyer and Small Business Export Credit Insurance Policies
• Demonstrate how to use insurance as a marketing tool and as a financing aid
• Identify the benefits and requirements of each type of policy
• Explain each policy’s coverage and the costs to you and your customer
• Ease the application process to keep it short

The workshop will include case studies. Bring your questions, concerns and needs, and learn how export credit insurance may become an integral part of your international marketing package.

Purchase terms are a major stumbling block for many of our members. Too often we let deals slip through our fingers because we cannot extend terms to the client or are unwilling to do so because of the risks and unknowns. The Ex-Im Bank’s family of credit insurance programs is designed to give you the flexibility of offering extended purchase terms to your buyer without tying up his or your credit lines or using cumbersome and costly letters of credit. Additionally, as US Government insured policies, they can also provide you with the option of discounting the instrument through your bank for immediate payment.

The WMMA considers this workshop so important to your company that it is underwriting your total out of pocket costs to attend --- travel, hotels, meals and registration. If you are serious about expanding your marketing territory, you cannot afford to let this opportunity pass you by.

To sign up, send an email with your commitment to attend to:

Karen Boyle
WMMA
kboyle@fernley.com

ANSI O1.1 – 2004 Standard

Reduce Your Product Liability Exposure – Incorporate the New ANSI Standard into Your Business Now

WHAT: Workshop for WMMA members to learn the implications of the new ANSI Standard and how to incorporate the Standard into your workplace

WHERE: WMMA Headquarters, The office of Fernley & Fernley, Philadelphia, PA

WHEN: Wednesday, October 12, 2005; 1:00 PM to 4:00 PM

COST: Free. WMMA will even pick up travel and related costs to and from Philadelphia.

PRESENTER: Mike Gililland, P.E., C.S.P., Chair ASC O1.1 Committee, and Vice President, Engineering Systems, Inc.

WHO SHOULD ATTEND: Safety and Regulations Managers at WMMA member companies, Key Contacts, and any other interested parties.

As the Secretariat of the ASC O1.1 Committee, WMMA strongly encourages all members to read, understand, and incorporate the ANSI O1.1-2004 Standard into your business.

Attend this workshop and …

• Take the guesswork out of the liability equation – The New Standard significantly expands the responsibilities and obligations for the builder, distributor, rebuilder, user, and customer versus what was previously articulated.
• Gain educational materials and training tools for staff, customers and users - WMMA members, as the machine builder, have a responsibility to provide educational materials and training to your customers and users so you can better protect your customers and yourself.
• Receive a complimentary, hard bound copy of the current Standard.
• Review the NFPA 79-2002 requirements for interlock of guards – a value to the majority of WMMA members.

WMMA considers this workshop so important to your company that it is underwriting your total out of pocket costs to attend --- travel, hotels, meals and registration.

To sign up, send an email with your commitment to attend by October 3 rd to:

Jean Coney
WMMA
jconey@fernley.com

 

Member News

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

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. 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

WMMA Member Komo Machine Inc. Announces Promotions

Komo is pleased to announce key leadership changes, which will enhance their strong management team.

Jeff Erickson has been named Executive Vice President of Komo Machine, Inc. After joining Komo in 1985, Jeff has had a successful career in a variety of experiences that have prepared him for this new leadership role. Most recently, Komo has opened a new sales location in China through his efforts to expand their market opportunities. Jeff will be reporting to Charles Zajaczkowski, President.

Frank Rubino has accepted the new role as Vice President of Applications and Software Engineering with Komo Machine, Inc. reporting to Charles Zajaczkowski, President. Frank’s extensive background and education in CNC technology, CAD/CAM software and robotics lead to the creation of CIM-Tech, pioneering router software.

Best of luck to Jeff and Frank on your new positions!

Association News

Farewell to WMMA from Jean Coney

In February of 2002, I joined the WMMA family, and as they say, the rest is history. I have had the pleasure of meeting a great many of the WMMA members, their spouses, and in some cases, even their children and parents.

Now, I am on the verge of starting my own family – my first child due in late October. I will not be returning to WMMA after my maternity leave, and my last official day with the Association is October 7th. I want to take this time to bid farewell, and to thank the friends I have made through WMMA for their good will over the years. It has been a great experience, and I will take the memories with me as I start the next phase of my life.

You are being left in excellent hands. WMMA is pleased to welcome Molly Pappas as the new Director of Committees and Editor of The Cutting Edge. Molly, upon completion of her Bachelors from the College of New Jersey in 2001, pursued a career in the non-profit field, where she worked for the past four years. Molly’s background in communications and non-profit administration will help WMMA proactively expand its existing services and address the changing needs WMMA. She has been a quick learner and is looking forward to working with you and our staff, while learning more about what she can do to make our association more outstanding than it already is.

Thanks for the memories!