Half Full - Half Empty

Whoa! Let’s all pause and wipe our collective brow. The end of 2009 is near and I’m sure we will all bid it a fond farewell in thirty days. Let’s call it the perfect specimen for the “glass half-full – half empty” scenario or that other one about there being a “silver lining” around every dark cloud.

Nonetheless, I’ve put together two lists – 5 Good things about 2009 and 5 Bad. Here goes.


The Bad

1. Jobs and Work
Has there been a tougher year for employers and their employees? Not in very long time. No company was immune and hardly an industry in any part of the country and indeed the globe avoided the downturn. The old notion of “what goes up – must come down” played out in a big way as the entire market pulled back as the bubble deflated.

2. Washington
Business is bracing for the toughest era of anti-business government to arrive in Washington in years. Unfortunately, the “limping into Washington” on the part of Detroit and the financial sector did little to bolster the image of the private sector. But we are the ones that generate jobs and wealth. People that go to work each day know this. Without business there are not jobs. Small business is and will continue to be a factor in the economic recovery.

3. Cash
Borrowing or the lack of it was almost instantaneous, cutting off the life blood of all businesses large and small. The big boys were made flush but have sat on the money to date. The availability of money has not trickled down to small business quick enough - where it’s needed most.

4. Inventory
When the bottom falls out, businesses cut employees which everybody sees. Less obvious to the outside world is the shrinkage of inventories to reduce the level of risk suppliers normally take during good times. To the contractor, it means scarcity and challenges finding materials when we need them. Be assured that your supplier will hear about recovering first and place orders when he sees the likelihood that the inventories will turn.

5. Failures
Most certainly some have not survived. We work in an industry that hinges on a significant percentage of new development. New building boomed for twenty-plus years and we all benefited. Indeed, there was a time when business did, in fact, “walk in the door.” But when the floor falls out, there are casualties and our industry was not without them.

The Good

Ok – how about that silver lining? Let’s take a look at the fluid filling the bottom half of that glass!

1. We’re still here
Most of us have survived. It’s not been without some challenging days, but surviving puts us in the game when the good times return. Already, reports are indicating that the bottom has been reached and housing took a significant jump last month. It won’t be quick but business will return. Reduced capacity will mean lots of work for everyone still standing when things turn positive again.

2. No Card Check
There was a time when EFCA was “touch and go” but it died due to the continuous pressing by merit shop businesses in all sectors for months on end. Even the general public caught wind that behind EFCA was a trail of reduced liberties and the elimination of the secret ballot. So far - so good but as Governor Arnold once said in the movies, “I’ll be back!” IEC will not take their eye off his ball.

3. Health Care Bill limps into the Senate
Here’s another issue where the public – and in turn the politicians that heard from them - became aware that the Health Care proposals were anything but a panacea. The jury is still out on this bill but it does appear that the public option, which is that the bill will devastate private sector choice, could go by the wayside. The health care priority at the beginning of 2009 has come “off the front lines” limping back to the aid station to fight another day. But business will need to keep up the pressure.

4. Rates are low
Through all of this, rates have remained low and are at a level that will, at the very least, not encumber recovery. It should fuel a nice come back. The balancing act on rates has held so far. Another good thing has been decreased fuel demands which has stabilized the price of gas needed to fuel our trucks. It wasn’t too long ago that predictions were that $5 per gallon gasoline would become the norm.

5. The Market
Is there any doubt in the minds of free market disciples that the place to fix the market is in the market itself. Often bewildering to the public sector (and many others), the market has a way of gauging, reacting, adjusting and fueling needed market movement like no government stimulus plan can do. There are few signs as optimistic as the stock market recovering, which bases its bullish moves on what is well ahead of tomorrow’s headlines. Let’s hope it continues.

So there’s the good and bad of 2009. The New Year is bound to profile in a more positive way. The IEC is most needed during times like these. We hope your business and your families enjoy a prosperous, health and happy New Year.

Gary Dykstra
President

TODAY WE NEED IEC MORE THAN EVER

John Evorik, Don Hulsey and I just returned from the IEC National Convention in St. Louis. There were a number of solid presentations and helpful meetings with other contractors that will impact our businesses in the years to come. As you might expect, with the economy slower that normal, attendance was a bit down but the Midwest Region had good representation and was well represented. I always enjoy the event and hope you all get the opportunity to attend future conventions.

Speaking of representation, the Midwest IEC was well represented at the National Apprentice Competition by Eric Duttlinger of Hulsey Electric. Eric, who was chosen top apprentice in our Chapter last spring, placed 9th out of 28 apprentices competitors from around the country. This is a major accomplishment and congratulations go out to Eric and Don Hulsey for their four-year commitment which has resulted in such a good showing. While we’re not the largest chapter in the country and given that a number of chapters seldom enter apprentices in the national contest, doing so, places Eric among the best and his placement in the competition of IEC’s best is something of which we can be proud. Great job!

The other element of this year’s convention was the many conversations with fellow merit shop owners around the country experiencing today’s downturn. As we’ve mentioned before, times are tough throughout the entire country. It matters little what part of the country you come from or whether a contractor does business in a rural area or large metropolitan area. The economy impacts everyone. It was great to see residential housing numbers looking upbeat in the last quarter. Continued growth here will bring us increased business.

I invite all of you to attend our annual Christmas party on December 11th. Special invitations are being sent to all members. It’s a great way to thank your employees for their efforts this year. We have some new entertainment planned that will allow those attending to win prizes and enjoy socializing with games and contests following dinner. The party will again be held at Andorra’s Restaurant in Schereville. Look for your invitation in the mail.

Gary Dykstra
President

DON'T KNOW THAT ANSWER

Last weekend I watched my routine number of Sunday morning interview shows to see if any new spin might be filtering in from Washington. Sure enough, there was Tim Geithner, boy genius of the financial world admitting that the federal deficit is getting too high but that the priorities now are economic growth and job recovery. Mr. Geithner, that’s always been the priority. His commentary reminded me one more time how little the financial world gets about real business.

Host David Gregory, who by the way doesn’t do too bad of a job bringing the spinners back to his questions, asked the one question that I’ve not heard a politician answer yet. “When will be see jobs come back?” Geithner’s response? “We don’t know that answer for sure.”

Really? Of course not. Bankers, Lawyers, Wall Street types and certainly Politicians don’t know the answer to that question because they don’t know what you know. They don’t make a payroll and pay for it based on customer sales. Private businesses that produce products, provide services and otherwise sell to customers are the people that understand jobs. The others do not.

When work is slow, you all shortened hours. Some of you had to let people go. Others shared workers to keep everyone working. You deal with real jobs and real work day after day. To a business owner, jobs are intuitive because you know the connection between work, revenue, expenses and jobs. Jobs you produce. Jobs you provide your employees. Jobs your create for those not working.

JOBS! Down to the minute. Down to the hour. Down to the truck. Down to the crew.
This is the part that politicians don’t get. They never participate in this decision. They look at statistics. You look at the faces of your employees when things get slow.

How do jobs look? You’re the business owners that know.

Bankers have to ask YOU to find out this answer. Accountants have to ask YOU to find out this answer. Lawyers have to ask YOU to find out these answers. Politicians generally don’t ask.

Next time you see a genius on the news show telling you how the economy is doing, ask your self the question, “What does this guy do for a living?” If he’s a lawyer, banker, politician or a talk show host, consider the source. You can tell them more about the real economy than they can tell you.

You just don’t get on network TV news shows.


Kevin McNulty
Execuive Director

EXPERTS

Experts identify three personalities of every independent business owner. These insights can help every electrical contractor how to be effective every hour of every day. Being aware of these three personalities help you stay in tuned with what motivates your decisions every day.

The entrepreneur, the manager, and the technician are the three types of personalities within each business owner and can each type can be willful, short-sighted or power-mad and may need a firm hand to shape them into a team!

The entrepreneur
The entrepreneur is the person who has the vision and sees the opportunity. He focuses on the future rather than the present, and disregards the past totally. His main problem immediately becomes how to get other people to do what he sees as possible. He is creative and energizing, and eventually leaves everyone behind.

The manager
The manager is the person who likes things orderly and predictable. He prefers the past to the future (or even the present). This is the person who establishes rules and policies and procedures, and he and the entrepreneur are automatically in conflict. He sets up an organization and wants it to stay the same, while the entrepreneur is always saying "What if?”.

The technician
The third person is the technician, the person who actually has the skills to do the work. He stays only in the present, doing what needs to be done, one step at a time. He is not interested in lofty visions or being "micromanaged." He sees managers as control freaks and entrepreneurs as irresponsible dreamers. Technicians are pragmatic, resistant to change, and just want to be left alone to get the work done. If it ain't broke, don't fix it.

Kevin McNulty
Executive Director

THE INSIDE STORY

Think of the independent contractors in our region that are not members of the IEC. Simply stated, there are things that we know because we are IEC members that they do not. Even the most experienced contractor needs to know more than what he experiences in his own business.

Think of the time they spend looking for information. What are the opportunities that we hear about that they never do because they have fewer opportunities to talk to other contractors? A quick glance at our National Convention agenda demonstrates how much is occurring in our industry today may never hear about. Finally, I wonder how much time and rework might occur the next time they work in Indiana because they missed one of our most informative meetings of the year?

The Indiana Code has been revised and has been in affect for all permits since August 26th. By attending our special meeting on Thursday October 15th at 6:00 pm, you’ll have the new information you’ll need on Indiana code. You won’t send time and money reworking while your non-member competitor will. If we believe strongly in the value of merit shop ownership, we want these non-members with us. More membership means more resources and increased value for all members of Midwest IEC.

IEC members get the inside story. That’s a clear value to membership with IEC.

I think it goes without saying, that contractors in our area value and respect the work of John Evorik both as a contractor and inspector. John will review all new changes (both good and bad) in the Indiana code at the special October meeting. As normal, we will serve pizza and John expects to take two hours to review the changes. Your board is continuing to focus on value added topics at our meeting that will help all contractor members. We thank John for taking the time to review the latest code information for all members.

A number of us will be traveling to the National Convention in a few weeks. There’s still time to sign-up by going to the IEC web site. Remember, St. Louis is not that far. If you can’t go the entire time, perhaps one day is possible. There’s a lot to gain. I hope to see many of you there.

Finally, our condolences go out to Chapter Exec Kevin McNulty and his family who unexpectedly lost their four month old grand daughter last month.

Gary Dykstra
President

The long days of summer have come to a close and fall is upon us. Through 2009 we’ve tracked the condition of our marketplace here and now seem to have come through the roughest period. All data from housing, manufacturing, lending and Wall Street show a turn upward. It’s a small upward tick but it seems clear that most economic factors have found their bottom. Fall is a good time to be optimistic.

Like your business, the chapter is also gearing up for the last four months of the year. A special Midwest IEC open house is planned for Thursday, September 17 from 6 to 7:30. The purpose of the meeting is to invite all merit shop owners in our region to come see what we have to offer. Chapter Exec Kevin McNulty has been reaching out to our list of prospects, specials emails will remind all members and non-members AND WE NEED your assistance.

If you know a contractor that is not a member of IEC please let us know. It’s possible they are already on our list. But next chance you get, jot down a list of companies that come to mind and give Kevin a call with the name(s). He’ll take it from there. We also have a standard invitation that goes to each prospect and one that can be formatted from you. We will send them the letter and ask you to also call with a reminder of our meeting on the 17th. The Board of Directors will be calling a list of assigned names, as well. So if you know one or two prospects, give us a call and invitations will go out.

Our October membership meeting will feature a speaker on “Green” electrical. What is it? Well, there is a lot of new technology coming to the marketplace that presents electrical contractors new opportunities for work. It’s not a fad but a growing sector. In many parts of the country, electrical contractors have failed to get involved in this work and electrical work is being done by carpenters, engineers and crane companies. Everyone in the IEC should become familiar with the opportunities in this sector. Mark your calendar for October 15!

The Annual Convention in St. Louis is upon us. The dates are October 21-24, 2009. There will be some strong presentations designed to help contractors find new opportunities, increase your service offerings and increase margins through operational efficiency. It’s a drivable distance and a great opportunity to attend our national convention close to home.

One final note, I have been serving as chairman of the national membership committee over this past year and there are some new IEC chapters being created in areas of the country where merit shop owners seek the support and networking of a solid local chapter. Even in tough years like this one, contractors are seeking to form chapters to provide support services to their companies. It’s a demonstration of the importance of IEC programs and services. It is also a hopeful sign that we’ve come off the mat and, as has happened many times before, our industry will be strong again soon.

Gary Dykstra, President - Midwest IEC

TEMPERATURE DROPS – SOME BUSINESS RISES

I heard a TV commentator describe the graphic shape of our economic situation as a V-W shaped recovery.” The theory is that some segments of the economy bounce right back while others experience something different.

The V’s

The V part of the VW economy includes dynamic growth companies and large exporters. Apple is enjoying a V recovery. Salesforce.com just reported a big, booming V quarter on Friday. Mobile broadband is an entire industry that will enjoy sustained V growth. Low-tax states like Texas, Tennessee and North Dakota are experiencing V recoveries.

The w’s

America’s W economy includes all those companies, industries, states, cities and personal careers where deteriorating value propositions were masked in good times. It always happens that way. Recessions unmask bad business models. Today’s W economy: newspapers, McMansion builders, inefficient manufacturers, high-tax state and local governments, and workers unable to adapt, relearn and relocate.

Warren Buffett described it as a “tide economy” where the tide goes out and everyone sees who’s “swimming naked.” That’s a funny one – but it does describe a lot of what has gone on this year. You know, the surest sign that we have too much economic time on our hands is when I read three different graphic descriptions of the economy in one edition of the Wall Street Journal.

Well, business owners have known that a long recovering was in the offing for some time. They started planning and taking action back in 2008. What I see in our area of the country is business has been reducing costs – labor, capital investment and inventory. In contracting – inventory is not a cost we take on in a dramatic way. Hopefully your capital equipment was in a healthy state at the start of the recession. Labor. That is our big cost. Contractors look labor cost in the eye every day.

The so called “job recovering” (which is what economic development is really all about - anyway) will be slow. Depending on where an industry falls on the “V-W” graphic, jobs in certain industries will “come back” at varying speeds. "Jobs coming back" is more of an on-off thing for many industries. In contracting, we adjust all the time. When’s the last time you heard a story about manufacturing sharing labor. Never. It’s not in the DNA of their business. It IS in ours.

I know one thing for certain. Our industry ALWAYS adjusts for labor and we’ve done it in some extraordinary ways this year. Adjusting labor in 2009 has been a matter of degree not novelty. IEC members who work together have been able to hedge unilateral adjustments in labor by working with each other. Adjusting for labor needs is one of our strengths – though none of us like it. Electrical contractor jobs will “come back” one job, one week at a time and the come back will often mean going from 25 hours to 40 hours per week. Consider how other IEC owners can help you bridge the labor gaps from slow to busy. We’re experienced at this and it is our strength whether we are a “V” or a “W.”