United front: it's time to speak out and champion a cause

Prosales, Nov, 2003 by Lisa Clift

Even with a reasonably good outlook for the economy mad continuing positive momentum in home building, the construction industry still faces a significant number of issues that could potentially set in motion a reversal of fortune for even the most successful LBM companies. However, challenges and unrest aren't an excuse for pessimism--they are a call for collective activism--one that many dealers now are taking seriously.

That solidarity was apparent among the executives who gathered for the NLBMDA 2003 Industry Summit in Indian Wells, Calif., October 9 through 11. Those in attendance, who represent the organization's 21 regional federated associations, did not avoid discussing the tough challenges--and the resolve to address them as a unified front was a strong call to arms from the NLBMDA and its executive committee.

From legislation to litigation, dealers and manufacturers participating in the event addressed a far-reaching docket of issues and concerns, including construction detects liability, contractual relationships, forestry activism, and shifting trade and market dynamics. They also outlined masons why construction suppliers must rally to protect the long-term viability of today's supply chain.

During his keynote speech, Bill Corbin, Weyerhaeuser's executive vice president for wood products, summed up the industry's situation succinctly by saying that the three most pressing topics that must be addressed are globalization, consolidation, and economics. "We're all part of the same value chain. We may have different challenges, but we are all faced with the same structural changes," he said, adding that these shifts now are reflecting growing global market supply" (resulting from improved production technology and more timber coming from other countries), coupled with slowing global demand.

For example, Corbin cites that production capacity has increased by 10 billion board feet since 1996, but demand during that period has increased by only 4 billion board feet. Moreover, he anticipates that the current annual North American demand of 67 billion board feet could drop to 63 billion board feet over the next couple of years. "Companies can't make any money in this environment," he said, unless they learn to work together to solve trade barriers and implement programs to improve demand for wood.

Another interesting angle came from panelist David Dittmer, president of Lanoga's Lumbermens division, who stressed the need to directly combat press criticism of the industry's forestry management practices by communicating a strategic corporate position to all employees in order to maintain a consistent, company-wide message. When addressing environmental activist groups, he advised: "Engage them because you have to deal with them. Your employees have to be informed. Write a policy. Put it out there. You can't make [all employees] experts, but you can provide information. We have to be passionate about what we do. There is strength in information."

There's also strength in numbers, and that's why dealers need to work through associations and other industry groups to help implement changes and lobby to protect the interests of U.S. construction supply companies. "If we don't have an active role on the Hill, no one else will do it for us," summed up NLBMDA's new president Shawn Conrad, who joined the organization in June. "We have to unite. We can't be a fragmented industry, and that is our goal."

I hope this is your objective, too. As the landscape continues to shift and change, there are far too many important industry affairs that will go unaddressed unless companies and individuals speak out and champion a cause.

Lisa Clift, Editor

202.736.3307

lclift@hanley-wood.com