Tuesday, November 11, 2008

Volume - 54 Restriction of Trade Issues

As you are well aware (from my Blogs), Independence2, LLC is a private labeled full-line architectural door hardware company supplying Contract Hardware Distribution, and therefore the commercial construction market with Door Hardware products.

Recently, we have encountered another example of an attempt on 'Restriction of Trade,' if not outright disregard for the Sherman Act and other legislature protecting businesses from such acts of trade violations, and in this case with involvement of State monies. Within the State of Ohio, Mahoning Valley, County of Trumbull is a School District known as the Girard City Schools, who are in the process of building a new high school.

After spending almost sixteen years in a manufacturing environment, hollow metal doors, and six of those years as President of the company, competing against the giants of the Industry, Ingersoll-Rand, Assa Abloy, and the like, I'm fully aware of their respective powers, control and availability of cash to fund various aspects of their business, and certainly the tens of millions of dollars spend in their 'Specification Writing' sections. I'm also fully aware that a great many architects use that service for Division 8, even with public monies, such as in school construction.

Knowing all of the above, I nevertheless was introduced to a person connected with the Girard High School project; funds provided by the State of Ohio, as well as the citizenry of Girard, Ohio. I was encouraged to call the Architect involved, to attempt to have our 'i.2 series' of architectural products included in the specification, from a financial savings position for the School System. This was an innocent enough request knowing through experience, full well, how this story would unfold; as it certainly did.

The architect listen to my telephone call, and as expected, explained that they are using an Ingersoll-Rand Spec writer to write the specification. I explained that was obviously their choice (as restrictive as it might be), but my concern was to get our i.2 series of architectural products involved with the specification. Immediately, he started quoting Ohio Law (Grade A for covering your ass) and that the Spec writer only has to use three competitors within the Division 8 section. He then gave me the IR spec writers name and phone number for me to go (into the Fox's Den) directly to him, so that he could determine if I would receive the 'right of passage' and the 'blessing from above.'

After leaving a voice mail message as to the purpose of the call, my call was returned. A request for a catalog was made to which I sent our Electronic Catalog. A week of so later, I received my rejection (surprise, surprise). I not only received a rejection, but one from the 'skill set' of a fifth grader, terse and degrading (not worth publishing, but certainly available).

A rejection I can handle, especially from someone who desires to (obviously) keep prices high, bids controlled, the selection process limited, and why not - It's State money and the voters already passed the levy (never wonder why levies take six attempts to pass). My problem is that this 'moron' decided to list out his objections that simply were not acceptable to me, or to my company; therefore, my response to this illiterates 'lob of a grenade' and therefore a 'call in for F16 cover' (and if you, as a reader, don't get that, it's only because we haven't met). Thus, my response to the Architect, as well as to the Superintendent of the Girard City Schools, the Treasurer of same, and of course, our 'Fifth Grader,'among others for simply entertainment value:

"Dear Ed,

First, let me start by saying, that I am writing you in response to Mr. Pekoc’s e-mail of October 15th, as well as, in order to seek your direct permission for the inclusion of our high quality, lower cost Architectural Door Hardware products in the bid process for the Girard High School Project, as the Architect, you individually, have the final say so in our products, inclusion or exclusion to bid process.

Second, in regards to the reply from your Ingersoll Rand Spec Writer, Tom Pekoc, his response was as expected, with reference his refusal to specify Independence2, LLC and our i.2™ Series Architectural Door Hardware products in this bid process. It is not logical to expect that an IR paid Spec Writer would allow a high quality, yet lower priced product to invade his business opportunities, when it is to his benefit to specify only high price products within the Girard High School project.

Moreover, although I can respect Tom’s job as a Spec Writer, he is paid very handsomely to do his job by I.R. thus not only eliminating lower priced competitors with equal quality products and restricting opportunities he comes in contact with to promote, indirectly by his specification, only contract hardware distributors who have the ability to resell IR - ASSA Abloy - or Stanley’s top-tier products as Schlage, Sargent or Best, thereby limiting the quantity of contract hardware distribution into the bid process. Nevertheless, I’m not writing you to fight the Sherman Anti-Trust Act or restrictions of trade issues. What I do wish to do is to ensure that you are aware of a few common industry practices and to point out that ultimately you make the final decision as to which products are included or excluded from this bid process and that by allowing Independence2, LLC’s products into this bid process you are in no way jeopardizing the quality of products or services to your clients as Independence2, LLC’s products carry the same exact industry certifications and our products meet the same standardization of quality as those of I.R., ASSA, Stanley or other brands such as Hager or Dorma.

With reference to Mr. Pekoc, Ingersoll Rand Security Technologies, specific objections, and his point by point email which was sent to the both of us, let me point out some FACTUAL information:

Although Mr. Pekoc, per OSRC requirements, does specify three (3) separate hardware manufacturers, there purposely exists only a limited amount of distribution (contract hardware distributors) that are permitted to carry and resell Schlage or Sargent products, and only a few more who are allowed to carry selected lower tier products at the same time, such as Falcon or Yale, by two of the three manufacturers listed, thus it keeps pricing levels both high and limited. IR and ASSA have spent tens of millions of dollars over several decades in order to accomplish this type of restriction in on both the levels of Specification writing, as well, as the limited distribution that restricts bidding by certain product lines; not even to mention the extra ‘discount’ points which are available only to a few select distributors, that results in “steering” and award favoritism even within their own Distributor base.

Independence2, LLC is a new company, incorporated in 2004. As far as, the “being a guinea pig”, Independence2, LLC’s products have been installed within Elementary and Secondary Public and Private Schools in Ohio, West Virginia, Pennsylvania and Florida and our list of clients include Universities and Colleges. Outside of the Educational arena, our products have been installed in multiple major Bank branches, Biomedical Research Facilities, and 5 Star Resorts, and the largest Energy Supplier in the State of Louisiana. So pardon my vehemence, but Mr. Pekco can stuff his “guinea pig” mentality, and all the associated rhetoric that comes with this restricted process.

It should be noted that Independence2, LLC is an Ohio/United States based Company.
Whereas the following are NOT:
§ Ingersoll Rand (IR) is a Hamilton, Bermuda based Company
§ ASSA Abloy is a Netherlands Company based in Stockholm, Sweden
Both IR and Assa own and operate manufacturing facilities in China, I.R. owning a Lock Manufacturer, and ASSA having just purchased Shenfei, a Chinese Door Closer Manufacturer in Shanghai. This is in addition to owning manufacturing facilities in Mexico and other off-shore, out of Country locations. The 2 LARGEST IMPORTERS of Door Hardware to the U.S. in the World are: I.R. and ASSA Abloy. Whether a Company owns an off-shore manufacturing facilities, only a percentage ownership of other off-shore manufacturing Company or simply utilizes independent inspectors involved in the manufacturing process, these are and will always be just business decisions. I could spew out numbers all day about which show just how much of the U.S. Door Hardware Market is literally and actually made in the U.S. But let’s not confuse the issue with unintelligent and short sighted remarks about “Globalization” or “Importation”.

With reference to the quality of our product’s material, Independence2, LLC’s products hold every Industry Certification as other brand manufacturers; which means that OUR PRODUCTS MEET OR EXCEEDS THE SAME QUALITY STANDARDS AS OTHER BRAND MANUFACTURERS. These standard Industry Certifications are UL, ANSI, and BHMA, simply to mention a few.

It seems to me, that whenever public monies are involved in a project (and although the majority of this project is paid by State Funding), the Voters of the District and thereby their tax money, should to be represented with a higher standard of fiduciary responsibility as to cost. Independence2, LLC through our Contract Hardware Distribution, who would not otherwise be able to bid due to the restrictive nature of this section, are fully prepared to bid this project for Division 8 fulfillment.

As far as, Mr. Pekoc’s suggestion that you refer his recommendations to Mr. Joe Jeswald, Superintendent, I will gladly include distribution copies to not only the Superintendent, but also Mr. Bello, the Treasurer, (whose fiduciary responsibility it is to act in the interest of protecting the Taxpayer’s monies within the Girard County Treasury System), as well as other interested individuals and companies.


Ronald P. Baldine
Managing Partner & Founder
Inrdependence2, LLC
623 W. Liberty St.
P.O. Box 40
Hubbard, OH 44425

Obviously, no response; also, as expected. When School districts, State Legislators, and other government/state employees finally 'get it,' it maybe too late. But, I will tell you this - the Voters Get It!

Wednesday, November 05, 2008

Volume 53 - Heaven or Hell

It's finally over, and America has spoken; given an obscure unproven State Senator, of four years ago, the Top Job. In the Land of the Free - Home of the Brave, we have elected the most Liberal Senator and mixed this choice with Control of Both Houses to the likes of Pelosi and Reid. We will find out over the next four years, if not sooner, how 'free' and 'brave' we really are.

While walking down the street one day a US senator is tragically hit by a truck and dies. His soul arrives in heaven and is met by St. Peter at the entrance. "Welcome to heaven," says St. Peter.

"Before you settle in, it seems there is a problem. We seldom see a high official around these parts, you see, so we're not sure what to do with you." "No problem, just let me in," says the man.

"Well, I'd like to, but I have orders from higher up. What we'll do is have you spend one day in hell and one in heaven. Then you can choose where to spend eternity,"says St. Peter. ''Really, I've made up my mind. I want to be in heaven,' says the senator. "I'm sorry, but we have our rules."

And with that, St. Peter escorts him to the elevator and he goes down, down, down to hell. The doors open and he finds himself in the middle of a green golf course. In the distance is a clubhouse and standing in front of it are all his friends and other politicians who had worked with him. Everyone is very happy and in evening dress. They run to greet him, shake his hand, and reminisce about the good times they had while getting rich at the expense of the people. They play a friendly game of golf and then dine on lobster, caviar and champagne.

Also present is the devil, who really is a very friendly & nice guy who has a good time dancing and telling jokes. They are having such a good time that before he realizes it, it is time to go. Everyone gives him a hearty farewell and waves while the elevator rises. The elevator goes up, up, up and the door reopens on heaven where St. Peter is waiting for him.' "Now it's time to visit heaven."

So, 24 hours pass with the senator joining a group of contented souls moving from cloud to cloud, playing the harp and singing. They have a good time and, before he realizes it, the 24 hours have gone by and St. Peter returns. "Well, then, you've spent a day in hell and another in heaven. Now choose your eternity." The senator reflects for a minute, then he answers: "Well, I would never have said it before, I mean heaven has been delightful, but I think I would be better off in hell." So St. Peter escorts him to the elevator and he goes down, down, down to hell.

Now the doors of the elevator open and he's in the middle of a barren land covered with waste and garbage. He sees all his friends, dressed in rags, picking up the trash and putting it in black bags as more trash falls from above. The devil comes over to him and puts his arm around his shoulder. "I don't understand," stammers the senator. "Yesterday I was here and there was a golf course and clubhouse, and we ate lobster and caviar, drank champagne, and danced and had a great time. Now there's just a wasteland full of garbage and my friends look miserable.What happened?" The devil looks at him, smiles and says, "Yesterday we were campaigning.. ..Today you voted."

Wednesday, October 01, 2008

Volume 52 - The Election and Foreign Policy

In volume 37 - I wrote "Watch how you vote!" Over one year ago, when all this madness (political stuff) started; and now, has finally come to the final 30 some days, the story of the ANT AND THE GRASSHOPPER is still valid (Volume 37 - read it).

In that period of time, we arrived at our first black candidate for President and our first female candidate for Vice-President, as a Republican. The war is still being fought, foreign embassies are still being attacked, the economy is almost as bad as in the days of Jimmy Carter; yes, just almost, for we haven't reached the double digit inflation or the 21% interest rates, nor do we have 440 captive prisoners, although looking at the largest bailout in history. Yet, we are still bombarded with alleged facts and figures of how all problems, from national health care to the ending of the war to a 'chicken in every pot,' can be obtained with the election of either candidate.

I believe that we will survive this latest round of economic thievery, as well as the election. My concern however is what direction we, as a nation, will take on the Global Front. How will we deal with Globalization? Trade? Radical Islam? China? Russia? Cuba? Venezuela? Oil Dependency? Illegal Immigration (yes, a global problem), and the list goes on...................

What I do know is that in 1787 at the Constitutional Convention someone suggested that the Constitution set a limit of 5000 men in the army. The story goes on to say that upon that suggestion, George Washington said, "If that be so, let the Constitution also say that no foreign army should ever invade our country with more than 3000 troops." Washington's pragmatism reminds me that stated policies, foreign or domestic, are inevitably tempered by the realities of politics. An example of such realities and lack of history, as printed by the NY Times, September 30, 1999, "Fannie Mae Eases Credit To Aid Mortgage Lending,".....under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and pressure from stock holders to maintain its phenomenal growth in profits."

In this coming election, we have McCain, a staunch free trader, supporting NAFTA as well as other free trade agreements; having also supported agreements with Viet Nam, truly defining free trade (considering he spent 5 years as a prisoner of war within that country). On the other hand, we have Obama who has supported some free trade, and has statements saying that the US cannot hide from globalization but must adapt to change (Whatever the hell that means). There is no question that sufficient trade reform must exist, and whether the US continues to participate in multilateral trade negotiations held under the auspices of the World Trade Organization is undoubtedly an important issue; but, the US must also be able to address economic issues as the value of the dollar, the centrality of the U.S. as a global financial center, high commodity prices, and the unaccountability of Congress.

Most meaningful however is the understanding of re-establishment of America as an international leader. This is something that hasn't been lost simply over the last Bush administration; but, something that has been in a decline since the Nixon Administration. Our inability to work within a true international community is staggering. We have picked and chosen dictators, terrorist, thugs, republics, democracies, and other forms of government with no real sense of reality.

I believe that this type of thinking has trickled down to the average citizen, who has no idea of the world outside of their respective own 'little world,' not only in a geographic sense but in a respective or moral sense of responsibility. As such, I present, from a retired Colonial friend, the latest example of our narrow-minded, thoughtless, self-centered example of ourselves, rotting from the inside out as a civilization. As George Washington counseled, leaders often must respond to the reality they are given, not the reality they wish:

"Subject: Noise Complaint at Luke AFB, AZ Date: Thu, 31 Jul 2008 11:42:33 -0400 Noise Complaint at Luke AFB, AZ. Luke AFB is west of Phoenix and is rapidly being surrounded by civilization that complains about the noise from the base and its planes, forgetting that it was there long before they were. A certain lieutenant colonel at Luke AFB deserves a big pat on the back. Apparently, an individual who lives somewhere near Luke AFB wrote theological paper complaining about a group of F-16s that disturbed his/her day at the mall. When that individual read the response from a Luke AFB officer, it must have stung quite a bit. The complaint: 'Question of the day for Luke Air Force Base: Whom do we thank for the morning air show? Last Wednesday, at 9:11 a.m,a tight formation of four F-16 jets made a low pass over Arrowhead Mall,continuing west over Bell Road at approximately 500 feet. Imagine our good fortune! Do the Tom Cruise-wannabes feel we need this wake-up call, or were they trying to impress the cashiers at Mervin's early bird special? Any response would be appreciated.'

The response: Regarding 'A wake-up call from Luke's jets' (Letters,Thursday): On June 15, at precisely 9:12 a.m., a perfectly timed four-ship fly by of F-16s from the 63rd Fighter Squadron at Luke Air Force Base flew over the grave of Capt. Jeremy Fresques.. Capt. Fresques was an Air Force officer who was previously stationed at Luke Air Force Base and was killed in Iraq on May 30, Memorial Day.At 9 a.m.on June 15, his family and friends gathered at Sunland Memorial Park in Sun City to mourn the loss of a husband, son and friend. Based on the letter writer's recount of the fly by, and because of the jet noise, I'm sure you didn't hear the 21-gun salute, the playing of taps,or my words to the widow and parents of Capt. Fresques as I gave them their son's flag on behalf of the President of the United States and all those veterans and servicemen and women who understand the sacrifices they have endured. A four-ship fly by is a display of respect the Air Force gives to those who give their lives in defense of freedom. We are professional aviators and take our jobs seriously, and on June 15 what the letter writer witnessed was four officers lining up to pay their ultimate respects. The letter writer asks, 'Whom do we thank for the morning air show? The56th Fighter Wing will make the call for you, and forward your thanks to the widow and parents of Capt. Fresques, and thank them for you, for it was in their honor that my pilots flew the most honorable formation of their lives. Only 2 defining forces have ever offered to die for you.....Jesus Christ and the American Soldier. One died for your soul, the other for your freedom. Lt. Col. Grant L. Rosensteel, Jr. USAF" ______________________________________________________________________

Friday, September 05, 2008

Volume 51 - A Potential Female Vice-President

I would never have guessed that I would be writing this piece fully admitting that the changes of me ever voting for a female for one of the two highest offices in this country were slim to none!

But up to two weeks ago that was true. The selection of Sarah Palin has now changed that scenario, for now there is actually an opportunity to vote for a true conservative that speaks and acts on what she believes no matter the response from the 'elite' press and political operatives that actually think they run this country or speak for Main-Stream America.

Go Girl!

Having stated the above, this entire 'selection process' and its abhorred reaction deserve just a few commits/questions: How is it that the 'Media' demands total accessibility to the selection process? How, in fact, does the 'Media' demand anything; isn't their job to simply report the news? Who the hell cares whether some reporter from the NY Times or Washington Post needs to put their approval on any candidate? And, how is it that theses same reporters refuse to not only have 'no limits' to their absolutely rude and ingenuous questions but also refuse to ask the 'other party,' and more so, in particular, to 'Men' the same type demeaning and sexist questions? How is it that Sarah Palin's husband's DUI of twenty years ago is relevant when Obama's 'coke' use isn't relevant? How is it that Gore's son's DUI was of no consequence but Palin's daughter's pregnancy is of major importance? How is it that Palin's degree from a non-Ivy League school is of importance because it is not an Ivy League degree? How is it that Palin's so-called inexperience is a 'monumental factor' when neither Obama nor Biden have ever 'run' anything other than their 'mouth' and have sat in Congress for up to thirty years acquiring a 14% approval rate when Governor Palin has a 83% approval rate? The questions are never ending as the 'Liberals' show their distaste and disrespect for all that is not stamped with their mark of bigotry and bias.

But more importantly, and actually more tragically is the fact that the so-called 'Glass Ceiling' is not, nor has it ever been, protected and guarded by men; but rather - and here is the tragedy - IT IS PROTECTED AND GUARDED BY WOMAN! Woman have not progressed in the workplace or in other endeavors equal to men not because of men, but because the majority of women are, unfortunately, unable to work and judge without pettiness and jealously seeping through their pores with regards to their other 'sisters.' We are seeing it today with reference to Sarah Palin, with female bashing by females. Incredible.

Here we have a bright, intelligent, seasoned politician, conservative, pro-life, Governor of the Great State of Alaska who has demonstrated within a two year term of Governor that reform is possible for the benefit of people without big government and YET the biggest criticism is from FEMALES, and in particular FEMALE reports of the elite media. Well ladies, here is an opportunity for the ages. The ball (or balls) is in your court. Lets see if you really want to break the 'Glass' ceiling.

Thank God for women the stature of Cindy McCain and Sarah Palin

Sunday, August 10, 2008

Volume 50 - i.2 series of Hotel Entrance Locks

Starting a full-line private labeled architectural door hardware company serving the North and South American commercial construction market is difficult enough without extending the line to include a private labeled Hotel Entrance Door Lock series to compete with the 'established giants' in the Hospitality Industry. Independence2, LLC with our i.2 series of private labeled architectural door hardware has again 'stepped up to the plate' with a full line of Hotel Entrance Door Locks.

One of the interesting things that we've found concerning Hotel Entrance Door locks, aside from it being controlled by only a few manufacturers, is that the United States market is and has been sold on an old process, the Magnetic strip card. For those of you that travel or have stayed in a Hotel room in the last 50 years, this is no surprise. What would be a surprise is if your 'room key' turned out to be an Intelligent Card (chip) or a RFID (proximity) type card. The amazing thing is that everywhere else in the world the Magnetic Card is 'old-school', with poor security and being replaced by either the IC or RFID type card. These newer type cards can store information, have a higher lever of security, and can be used throughout a property for more than simply opening a door.

The main reason that your Hotel Room Door has a lock on it is to make sure that the access control function is used only by you. Simple enough; but unfortunately not only is your room accessed by staff and security, magnetic type cards are easily duplicated; therefore, access control must be a managed process. Aside from the Hotel Industry this new technology can be taken to much higher levels of security such as with Schools or Businesses where graphics and photos plus higher degrees of biometrics can even personalize the card in this managing access process.

With regards to the Hotel industry, the smart card technology enables only approved personnel and or guest to either full or limited access to a facility, at certain times of the day or week or 'stay' during one's hotel visit. The control can also automatically terminated upon a certain length of time; can be used for not only full-time staff but also temporary employees or vendors requiring access to the facility. Even more important, in today's 'Green Environment' with folks finally understanding the importance of saving energy not only for the 'planet's' sake but for sake of the 'bottom-line.' Going 'Green' is not only a positive environmental decision, but one that truly makes 'dollars and sense.'

Energy costs in guestrooms are one of the most expensive capital expenditures a hotel can incur. With the i.2 series of Hotel Entrance Locks, we address this issue, not as an option, but as part of our product offering. All of our Hotel Room Entrance Locks come with an energy saving device. It has been stated that 65% of the time hotel guests are not in their room; so why heat, cool, or light the room when the room is unoccupied? With our Entrance Room Locks, our Smart Cards and RFID Cards turns 'on and off'' the energy within the hotel room as soon as the guests enter or depart the guestroom.

We at i.2-Independence2, LLC now have ready for the market place a full line of private labeled Hotel entrance door access devices including the standard Magnetic strip card, but also the more secure I/C smart card and the RFID card with all the associated card readers, integrated software systems, energy saving device, and even perimeter access controls for side entry with either the Smart Card or the RFID card access control systems. The hardware is exquisite with many designs and finishes along with the added security from a company that understands the needs of the customer.

We are continuing our R & D to the next level which will include higher degrees of Biometric access. For those locations and applications that require higher security, development is taking place with a retinal scan device as well as voice recognition system, understanding that, at this time, these systems are in the much higher price bracket as well as requiring more personal information from the user. Along with this technology is the combination hardware/software systems that will use a RFID proximity card and a video recognition system. This system involves calling up a profile in a video system and a facial recognition test comparing prepared data to a live image. This control/video system and in particular the facial recognition aspect is still an evolving technology but one that is rapidly advancing.

The i.2 series of architectural door hardware - Where Architectural Door Hardware meets Value and Design meets Imagination

Wednesday, July 09, 2008

Volume 49 - China: collaboration or confrontation

It has been almost two years since my first trip to China, where I spent three weeks visiting manufacturing sites, talking with perspective manufacturing partners, covering a variety of subjects ranging from quality and inspection processes, pricing, lead-times, specifications, etc. for our private labeled architectural door hardware company and the i.2 series of product, along with attempting to start a business relationships in a very short amount of time in multiple locations. These locations covered Beijing, Guangzhou, Zhongshan, Dongguan, Shanghai, Suzhou, Taipei and Hong Kong. As difficult a travel schedule as I had ever arranged, aside from all the business introductions and discussions, the attempt to assimilate a culture 5,000 years old with unheard of economic impact just over the past 20 years, was equally as difficult.

As I've stated in previous blog writings, Volume 28-29-and 30 of The 2am Talk Radio Show blog series, I didn't witness an emerging market, I witnessed a country that already has emerged. I witnessed a nation that has been undergoing a huge commercial and creative upheaval, entering the world market. I witnessed a country emerged in a spirit of entrepreneurship that reminded me of what the United States was before we paid workers to sit on their 'butts' without working. I witnessed a 'pay as you go society'; if you couldn't pay, you worked until you were able to (purchase).

I witnessed construction cranes that worked seven days a week, in the creation of breathtakingly spectacular skylines that rival New York, Chicago, Miami and Los Angeles. Construction involving high rise office buildings, apartments, airports, hospitals, malls, and Hotels. The creation of jobs for millions of people that earn them a spending power they have never known and are eager to exercise.

I also witnessed terrible air pollution, driving conditions that makes the '10' and '405' in Southern California look like sensible highways. I also saw many small motorcycles, occasionally with three people on one vehicle. President Bush is absolutely correct by stating earlier this week at the G8 summit that without China and India making resolutions to help with the environmental impact, it won't make much of a difference what the G8 determines without those two industrial nations. But I also saw people working in factories that smiled when you made eye contact, no dirt floors, no armed guards, and none of the 'TV' conditioned 'Chinese factory.'

I've even written that economic prosperity/doctrines is more important than a democratic form of government; and that economics, and economic doctrines/principles determine the level of living standards, the degree of educational process, the laws of a land, and the future existence of people, rather than a form of government or politics. Is it not true that democracies have a life span of less than 300 years? As you can already tell from everything that I've written thus far today, and in the past regarding Emerging nations as China (Asia), and Economies in general, as well as subjects as Globalization, I'm not always well accepted by even close friends of mine. Therefore, the point of this Blog: Starting this evening on the Discovery Channel there is a four-series starting at 10 p.m. EST hosted by Ted Koppel that "shows changes in China."

The advertisements regarding this series state:

"What's going on in China will make a big difference in the U.S."

"We're going to be competitive with these people, and whether that competition is resolved by collaboration or confrontation is really the big question for the next 20 years."

"More Buicks were sold in China last year than in the U.S., and Ford increased its sales in China last year by 30 percent."

"The mistake that some people make, I think, is that they assume capitalism is a political doctrine," Koppel said. "It's not. It's an economic theory. You can have a totally capitalistic society, which China is rapidly becoming, and still not be one step closer to democracy."

Hopefully, this 4-part series does both our countries justice as to Fact, not Fiction.

Tuesday, June 03, 2008

Volume 48 - A Great Story

Memorial Day has been over for a few days, but as a tribute to all the men and women who have served with honor, in protection of our 'taken for granted freedom.'

It happens every Friday evening, almost without fail, when the sun resembles a giant orange ball and is starting to dip into the blue ocean. Old Ed comes strolling along the beach to his favorite pier. Clutched in his bony hand is a bucket of shrimp. Ed walks out to the end of the pier, where it seems he almost has the world to himself.

The glow of the sun is a golden bronze now. Everybody's gone, except for a few joggers on the beach. Standing out on the end of the pier, Ed is alone with his thoughts....and his bucket of shrimp. Before long, however, he is no longer alone. Up in the sky a thousand white dots come screeching and squawking, winging their way toward that lanky frame standing there on the end of the pier. Soon, dozens of seagulls have enveloped him, their wings fluttering and flapping wildly. Ed stands there tossing shrimp to the hungry birds. As he does, if you listen closely, you can hear him say with a smile, "Thank you. Thank you."

In a few short minutes the bucket is empty. But Ed doesn't leave. He stands there lost in thought, as though transported to another time and place. Invariably, one of the gulls lands on his sea-bleached, weather-beaten hat - an old military hat he's been wearing for years. When he finally turns around and begins to walk back toward the beach, a few of the birds hop along the pier with him until he gets to the stairs, and then they, too, fly away and old Ed quietly makes his way down to the end of the beach and on home.

If you were sitting there on the pier with your fishing line in the water, Ed might seem like"a funny old duck," as my dad used to say. Or, "a guy that's a sandwich shy of a picnic," as my kids might say. To onlookers, he's just another old codger, lost in his own weird world, feeding the seagulls with a bucket full of shrimp. To the onlooker, rituals can look either very strange or very empty. They can seem altogether unimportant ....maybe even a lot of nonsense. Old folks often do strange things, at least in the eyes of Boomers and Busters. Most of them would probably write Old Ed off, down there in Florida. That's too bad. They'd do well to know him better.

His full name: Eddie Rickenbacker. He was a famous hero back in World War II. On one of his flying missions across the Pacific, he and his seven-member crew went down. Miraculously, all of the men survived, crawled out of their plane, and climbed into a life raft. Captain Rickenbacker and his crew floated for days on the rough waters of the Pacific. They fought the sun. They fought sharks. Most of all, they fought hunger. By the eighth day their rations ran out. No food. No water. They were hundreds of miles from land and no one knew where they were. They needed a miracle. That afternoon they had a simple devotional service and prayed for a miracle. They tried to nap. Eddie leaned back and pulled his military cap over his nose. Time dragged. All he could hear was the slap of the waves against the raft. Suddenly, Eddie felt something land on the top of his cap. It was a seagull! Old Ed would later describe how he sat perfectly still, planning his next move. With a flash of his hand and a squawk from the gull, he managed to grab it and wring its neck. He tore the feathers off, and he and his starving crew made a meal - a very slight meal for eight men - of it. Then they used the intestines for bait. With it, they caught fish, which gave them food and more bait......and the cycle continued. With that simple survival technique, they were able to endure the rigors of the sea until they were found and rescued. (after 24 days at sea...)

Eddie Rickenbacker lived many years beyond that ordeal, but he never forgot the sacrifice of that first life saving seagull. And he never stopped saying, "Thank you." That's why almost every Friday night he would walk to the end of the pier with a bucket full of shrimp and a heart full of gratitude.

(Max Lucado, In The Eye of the Storm, pp.221,225-226) PS: Eddie was also an Ace in WW I and started Eastern Airlines back in the 30's.

Wednesday, May 07, 2008

Volume 47 - Manufacturing losses - USA today article

Early in March, a friend of mine sent me an article that appeared in USA TODAY titled: Manufacturing losses weigh heavily on Ohio, By David J. Lynch

Having grown up, been educated, lived and worked in Ohio for my entire life this shouldn't have been a total surprise to see an article on such a subject, unless of course you happen to have been the President/CEO of that company during the years of 1996-2001.

"After more than 60 years in business, their employer, Amweld Building Products, announced in October that it was closing two local plants and shipping the work to Monterrey, Mexico. Some workers got the news when armed security guards swarmed the assembly line and ordered them away from their machines."

Pathetic! If anyone believes for one second that these plants, those workers, due to their wage scale had anything to do with moving this plant to Mexico, or that they were such a threat as to have armed guns "swarm" to the factory floor, 'Santa' and the 'Easter Bunny' will continue to live in mystical belief.

The article goes on to say "Ohio's Mahoning Valley once was emblematic of industrial America, thickly populated with auto and steel plants, employing men whose strong backs and high school diplomas were their chief credentials." What does that exactly mean? Every give a thought to that statement; I happen to believe that it is, at best, condescending and at worse an absolute insult. "strong backs and high school diplomas," is that supposed to mean that other parts of this country or the world are more suited for good paying jobs, or is it supposed to mean a handicap of some sort?

The fact of this particular matter is that whether these skilled factory workers, even if they all had college degrees, had nothing to do with this plant closing. The closing of these two Amweld plants had nothing to do with NAFTA. The closing of these plants (and the Johnson Rubber plant) are so far removed from the presidential elections as to be comedic the way the political parties are chasing such a story. The closing of these plants happened because of past and present ownership who caused the downfall of that particular company through greed and absolutely poor decision making processes over the past six years; decisions that adversely effected both the employees and the customer base.

The truth as stated by in the article, "These are not the first comforting election-year promises these men have heard," nor others in the Mahoning Valley during election years, "for experience has taught them to be skeptics." As one of the workers, Craig Plant stated, referring to the politicians, "It's just a smokescreen for we're pretty much not going to do anything." Yet we have candidates making the following statement to "renegotiate NAFTA's terms with Mexico and Canada, add tough labor and environmental requirements to any new accords and re-orient trade policy from the needs of Wall Street's moneyed elite to the protection of hard-hit workers."

I'll again state that the moving of Amweld to Mexico had absolutely nothing to do with anything as reported; and, I take it a stand further, and state that if the other plant closings, mentioned in that article, were investigated the closings would have occurred because of greed, theft, money laundering, poor management, fraudulent accounting practices, inventory fraud, and many other reasons other than what the politicians have stated and puppeted by the media.

The worker's understand why this happened, and when it started down this disastrous trail. As stated, and correctly so, the company "....had outsize ambitions befitting the age of globalization, saying it aimed to become 'the Pepsi-cola of steel doors', the workers say." The company claims that it had been unable to extend existing factory leases; but failed to say that the previously ousted owner, still owns the property. The company then blamed rising costs for energy, health care and workers' compensation for the elimination of jobs, yet from 1996-2001 it was a 'money machine' turning gross profit margins unheard of in the Steel fabrication industry. This idea of plant closings, loss of manufacturing jobs, and all the other 'bullshit' that goes on through politicians and the media is simply 'off base'; the devil is in the detail of such moves, and not in trade agreements, nor wages of other countries, nor in the wage rates of good jobs here in the Mahoning Valley, and certainly not on the backs of those 'high school diploma workers,' who are simply the very best in the industry, and certainly will always have my total respect. It was my privilege to have been the president of that company, because of the men and women that worked the factory floors.

As stated by Bob Ulrich, past Union President, "it's just sad;"but, let us, at least, get to the truth.

Monday, April 21, 2008

Volume 46 - Hotelier's dollars lost, never seen

Here is a dirty little secret about Hotelier's dollars lost but never seen; it's hidden in Division 8 of the Master Construction Division of the Construction contract. Within Division 8, the realm of Architectural Doors, Frames and Door Hardware, making up 2-3% of the entire project; ask any Hotel owner from the smallest of properties, a 22 room Super 8, to the giants of Intercontinental or MGM, what they pay for door hardware, or even more specifically a Grade 1 type door closer or a Grade 1 exit device, and your answer, 100% of the time, will simply be "I don't know."

This cost, as stated, only makes up 2-3% of the project, and... "we are simply to busy with the large portions, electrical - mechanical - concrete portion, of this project," so it gets buried in some sub-contracting section. Pathetic!

Not only should $5,000, $25,000 or $50,000 be of importance, regardless of one's size, it is irresponsible not to be more involved into a project, simply not accepting some architect's 'twenty year old' specification, written by a spec writing representing a specific manufacturer. Remember the Fox in the Hen house story? The Architect is an employee of the owner-builder-developer; the check is still written by 'ownership'.

It is easy to say that in today's society, with an economy that is in a recession, a volatile stock market, $110 barrels of oil, bread (seemingly) at 30% daily price increases, etc. etc. etc. that one should be watching every 'Penny' spent, either at home or on the job. Isn't running a business not only about 'Sales' but also about 'Cost?' Isn't it the responsibility of ownership, or ownership's representatives, to 'always' watch 'cost'; good market or poor? Learn to know what real costs are and where they exist; pennies and dimes add up to serious money that sometimes are never seen.

Monday, March 17, 2008

Volume 45 - Locksmithing - Just a service industry?

In September of 2001, I wrote an article that was published by the Doors and Hardware Magazine entitled "Can Independent Entrepreneurs Survive Industry Consolidation?" In this article I spoke about the fragmentation of the Hollow Metal Door Industry and the various types of integration that was taking place and would take place over the next decade. I also illustrated the importance of the Contract Hardware Distributor in this Industry and in the supply chain attempting to show that regardless of what happens with consolidation, a well organized and operated distributorship would always be a profitable company.

In the Magazine, Locksmith Ledger, December '07 issue, a very similar article was written, "In a World of Merger Madness" stating that no matter what happens within an industry, individual businesses should keep their eye focused on their businesses always looking towards improvement within the Industry."

Interestingly, I wrote an article not accepted by the Locksmith Ledger stating those similar sentiments regarding the business of Locksmithing. The following is that article that asks a very serious question: Locksmithing - Just a service industry?

As a business entity, the Locksmith Industry is being pushed further and further toward the 'service provider of 'install only' direction versus the 'selling of products for revenue' direction. As an owner of this type business one should be asking the following questions: 'How is this present supply chain adversely effecting my business?' and What are my options in attempting to control my own destiny and profits?' Understanding the 'Supply Chain' and the implementation of its consequences, as well as individual segments equates to volumes of information and debate. This article is simply meant to stimulate thinking on possible solutions to combating the problem of limiting revenue streams.

It is common knowledge that the Locksmith Industry must compete with the 'Big Box Houses' and preferred distribution, where a great many hardware manufacturers sell direct not only at pricing advantages but also availability advantages, since most locksmiths have to purchase through pre-ordained distributors or wholesalers, thus limiting their 'selling revenue stream.' This predetermined supply chain is an obvious goal of the Manufacturing Industry to limit distribution, yet increase sales and profits of their products. Obviously, this means the 'Big Box Houses' or other types of large distribution that can purchase large quantities of product, as this is really the only criteria by the manufacturers of products, work at a huge advantage.

This selection theory further states that certain manufacturers, in fact, intend upon even further limitation of product in their future plans, regardless of Anti-Trust legislation. Disruption of the supply chain, or specific modeling of this supply chain, although an interesting issue, is really of little importance to a respected industry like 'Locksmithing,' being further pushed into a service arena by the large manufacturers of door hardware products with specific intent. No matter how respected and vital one might think this Industry is to both the new construction as well as the aftermarket construction industry, combating this trend is the subject matter and vital concern of ownership.

The Locksmith Industry however has many options today that didn't exist even a few years ago. The Global Supply Chain today offers availability of product, along with fair market pricing to compete with anyone. This 'Open Supply Chain Market' is far better than that of a controlled and limited chain, thus opening up choices and options the basis of all business growth. With Globalization, one has a choice, the same as a Fortune 500 Company, to participate according to your business plan, and not according to someone else's business model.

Remodeling of this current Supply Chain should be of great interest to the Locksmith Industry, if one is to combat this squeeze to simply become a 'service type provider.' It is of vital importance to this industry to understand your 'value added' service within the commercial, as well as the residential, construction market; this must include new construction as well as the aftermarket construction segment. The time is now to formulate a business model that involves access to different revenue streams, rather than simply attempting to find a 'middle-ground' or compromise situation due to the restraint of trade and pricing issues. Being timid about your business is simply not acceptable. It is time for this industry to realize that for the first time in history, the Locksmith Industry is not captive to large corporate door hardware Industry dictates. There is no longer such a thing as 'business as usual,' unless you choose to remain a single revenue stream business. Single revenue stream business plans, regardless of how the business was pushed into that corner do not make fiscal sense. Industry shifts, mergers and acquisitions only emphasize the importance of this business model readjustment.

With regards to the question of "What are my options in attempting to control my own destiny and profits?" It is really all about how one 'frames' the problem. The ability to properly frame an issue or problem will go far in the ability of those who choose to tackle an obstacle, in avoiding the typical pitfalls that limit one's ability to reach a solution; such as Locksmiths being forced into being a service company, due to some anonymous corporate boardroom's model and goal of limiting distribution of product for control of a supply chain. The Locksmith Industry has to seriously think about its future and survival, beyond a service company, and to act by investing thought into a vision that includes multiple revenue streams.

Thus, we arrive at 'basic business 101', which states the ability to purchase at attractive pricing is directly proportionate to ones revenue possibilities tied directly into one's cost structure. The ability to purchase products at a fair price directly from the 'source' is simply necessary to sell product as another revenue stream, complimenting the service side of the business. This entails the ability to purchase a quality product with superior guarantees/warranties that meet or even exceed those offered only to 'preferred customers.' This also means being treated as a business partner with the source manufacturer, something which is now offered within the 'Global Economy Model' versus the 'Standard Operating Model.'

From the purchase side of this equation to the Sales side, simply states: there are only three ways to increase sales:

(1.) Increase the customer base

(2.) Increase the amount of goods or units that your present customer now purchases

(3.) Increase prices

Anyone that has been in business for any successful length of time realizes that increasing prices has become more difficult, mainly due to the restricted supply chain thoroughly analyzed previously. This option, however, becomes more feasible for the Locksmith when purchasing 'direct' enters the equation. One can actually continue to sell at present price points, while increasing and having a positive impact on the bottom line by being more prudent on the purchasing side of the formula. This ability to purchase direct also provides you assistance to more easily defend your regional 'turf' or regain your historical client base needed for your businesses future growth. One can then choose to concentrate on expanding out to new markets, new customers, or possibly utilizing 'add-on' benefit extras in order to build out from your established core expertise. However, until this step is made, your Locksmith operation will be forced to compete at the lowest levels of the Supply Chain 'playing field' other than the service side.

If you are willing to work on a continuous improvement of your service capabilities, process, product offerings, cost reduction programs and monitoring, added to your ability to communicate your company's unique value package, then your customers will inherently be able to differentiate why you are better than the rest of the growing options and competition that exists with the marketplace. This will allow you to establish a new or larger customer base, such as more 'negotiated' work, or even 'bid' work depending upon your organizational structure or your own personal future growth goals for your business.

In order to accomplish better pricing, with warranties/guarantees equal to the 'big boys', one has to find a reliable source of product with pricing that adds to one's bottom line; as stated, a strategy established to sell to new customers, as well as more product offerings to one's present customer base. Possibly a source that can introduce your business to potential sources of revenue as was recently accomplished at the construction of a new student center at I.U.P.U.I., Indiana University-Purdue University Indianapolis; the University of North Carolina (UNC) Genetic Center in Raleigh, North Carolina; the Pontchartrain Convention Center, Metairie, Louisiana; or the Stowe Mountain Lodge, Stowe, Vermont where introductions were made not only to Locksmiths and the Contract Door Hardware Distributors, but also Millwork Finishers, all by a Source Manufacturer that understands the value brought to the market place by the Locksmith Contract Door Hardware Industry.

When was the last time one of your Manufacturers/Suppliers brought business to your doorstep? When was the last time you evaluated the model on which your company was established?

Sunday, February 24, 2008

Volume 44 - Congress and Major League Baseball

What the hell is Congress doing investigating whether Roger Clemens is telling the truth or if a known drug dealing ex-cop, Brian McNamee, has now decided to become a truthful witness? This TV media show, also known as a Congressional hearing, reminded me of a scene in the Godfather, where a Congressional committee was hearing testimony from a known racketeer, with the same results!

This circus media show involving Congress and a 'known celebrity' started before Martha Stewart, but it now seems 'standard operating procedure' not to solve a crime but to find someone who has lied to a federal investigator. Defined by Webster, a "lie is an assertion of something known or believed by the speaker to be untrue with intent to deceive." Talk about having the 'Fox in the Hen' house; why don't we just add a couple 'used car salesmen' to the committee, convene daily during the 'Soaps' or maybe Jerry Springer's Show, sell advertising and at least make it a profitable venture!

If Congress had any balls (no baseball pun intended), they could 'clean up' baseball in less than it would take to play 'one inning.' Simply, tell the owners to solve the (drug) problem or they (Congress) would repel the Anti-Trust favoritism shown to Major League Baseball, with a time limit of one year. After delivering this message, Congress could go back doing whatever other nonsense they do; for it is probably too much to ask for proper legislation concerning issues as Immigration, Health Care, Social Security, Taxes, Education, etc. let alone solving the problems of the FDA, FAA and Homeland Security; unfortunately, it just has become to easy to blame the President.

Baseball is 'Entertainment' as is all major sport. At the rate we're going, next week's program scheduling might even have the New England Patriots, and the adventures of 'Spygate.' I read that there are even scheduled hearings on thoroughbred race horses and the use of steroids! If 'entertainment' is the focus of Congress, I can't wait for the Music Industry to talk about their HDH and steroid use; or maybe even their coke, H, or meth use; look out Soaps!

The NFL, MLB, NBA, NASCAR, PGA, NHL, etc. is Entertainment. If anyone is still naive enough to think that these people, professional athletes, are anything other than entertainers, god forbid the concept of 'heroes', who should be controlled by their respective leagues and owners, then Santa and the Easter Bunny are well secured in mythological history.

Thursday, January 31, 2008

Volume 43 - Antitrust Laws

The following is a summary of the Antitrust Laws' relevant provisions as I see them pertain to the Commercial Door Hardware Industry, and in particular Division 8 of the Master Format Specification System. It becomes very evident that many people walk a 'slippery slope' within the commercial construction industry and the manufacturers that supply product through distribution to this industry.

The first statement of United States antitrust law was embodied in the Sherman Act, which was enacted in 1890. The Sherman Act has two major provisions:

1. Agreements between two or more persons to restrain trade or commerce are illegal. The Sherman Act's first section prohibits unlawful agreements or conspiracies between two or more entities to restrain trade. These agreements do not need to be in writing. In fact, most are not. Although the terms "restraint of trade" are not defined in the statute, over the years, courts have considered many types of restrictions between competitors and have ruled that certain restrictions or limitations on free enterprise clearly violate this section. Nonetheless, three elements must be established to prove a violaation of Section 1: (1) the existence of a contract, combination or conspiracy among two or more separate entities that (2) unreasonably restrains trade and (3) affects interstate commerce.

2. Monopolizing trade or commerce is illegal. The Sherman Act's second section involves monopolization. This section is violated by the action of a single entity - it does not require an agreement. To violate this section, two elements must be present: (1) a corporation must possess monopoly power in the relevant market; and (2) a corporation must have willfully acquired or maintained such power by imporper or illegal means. These elements are not defined in the law and, therefore, are complex. There is no market percentage threshold that automatically creates an illegal monopoly. Traditionally, the courts have said that a company is a monopoly if it possessess the power to control prices or to exclude competition from a market.

The Sherman Act was supplemented in 1914 by the Clayton Act, and in 1936 by the Robinson-Patman Act. These two acts contain some basis prohibitions as:

1. A seller may not discriminate in price between purchasers when the effect may be substantially to lessen competition.

2. A corporation may not sell a product upon the condition that the purchaser will not use or purchase the product of a competitor when the effect may be substantially to lessen competition.

The Federal Trade Commission Act originally enacted in 1914 supplements the Sherman and Clayton Acts by broadly prohibiting unfair or dcptive activities.

Along with the Federal Trade Comission Act there also exists many State Antitrust Laws with over 48 states having such legislation. Such as in Ohio with the Valentine Act which specifically prohibits combinations or agreements to: (a) restrict price, (b) restrict production, (c) boycott customers, and (d) allocate markets. In addition, some state have price discrimination statutes that are similar to the Robinson-Patman Act and cover purely intrastate price differentials.

With respect to dealing with 'customers' or 'suppliers', resale price maintenance, certain boycotts, and tying arrangements are per se violations of the Sherman Act. Other areas regarding customer or supplier dealings in which antitrust problems may arise include the following: (1) Arrangements with Distributors - "Distributors" are those customers that purchase products for resale and who take title to the goods, bear all resale credit risks, and are independent entities. A manufacturer, acting alone, can select any company or person it wishes as its distributor or agent. It is also often permissible for a manufacturer to appoint a distributor as its "exclusive" distributor in a specified geographical area.

Although reasonable restrictions on territories and custromers is permissible, it is still unlawful for a manufacturer or seller by agreement, threats, pressure, persuasion, or coercion to restrict, limit, or require a distributor to use certain prices, terms or conditions upon reselling the manufacturer's products. It is also unlawful to require distributors to handle your products to the exclusion of similar products made by competitors when the effect may be a substantial lessening of competition or tendency toward monopoly. Under this test, the total number of distributors thus restricted and their size, considered in relation to the total number of similar distributors so restricted, is the key to determining legality or illegality. It takes only a very low ratio of restricted distributors to make exclusive dealing unlawful.

(2) Price discrimination - The heart of the Robinson-Patman Act which makes it unlawful for a seller to discriminate in price between the purchasers of commodities of like grade and quality where the affect may be substantially lessened competition with the seller himself, or with the favored purchaser or with customers of the favored purchasers. Price discrimination is any difference in price, no matter how small, between customers. When products are sold at substantially different prices to competing distributors for resale, a probable injury to competition between the purchasers may be presumed. The statute also prohibits "indirect" discriminations in price. Such "indirect" discrimination could occur when differing terms or condiditons of sale result in a lower price to certain buyers. For example, rebates, credit, allowances, or services provided as incidental to the original sale to some buyers that are not provided to other competing buyers would be "indirect" discrimination.

The Robinson-Patman Act also forbids a buyer from knowingly inducing or receiving discriminatory prices or services. If the seller grants an unlawful discriminatory price or performs a service not made proportionally available to competing buyers, the buyer who receives such favored treatment may also violate the law. Thus, if a buyer knows that it buys in approximately the same quantities and by the same methods as its competitors and knows that it has received substantially lower prices than its competitors, the buyer will be presumed to have violated the law. Even if the buyer purchases in larger quantities, or by different methods than its competitors, if it know that the discounts it receives are clearly greater that the seller's probable cost savings, the buyer may be held liable for receiving discriminatory prices.

This section of the Robinson-Patman Act further states with regard to discrimination between customers that it is unlawful for a seller to furnish one customer with services or facilities in connection with the processing, handling, or sale of its products, unless such services or facilities are made available on porportionaltely equal terms to the seller's competing customers. Furthermore, a manufacturer who engages in "dual distribution," by selling to wholesales and also to direct-buying dealers, must take steps to insure that services, facilities, or allowances furnished to direct-buying retailers are also made available to distributors/wholesalers who compete with direct-buying retailers.

A summation of Antitrust Laws, old laws on the books and enforceable - possibly some Federal and State attorney general employees should busy themselves to present practices within the commercial construction arena, with particular attention toward those 'playing' in Division 8.