Monthly Archives: October 2008

The Silent Debate

“And now,” says the moderator, shuffling a few papers, “it’s time to discuss foreign trade and corporate taxation in depth. We’re sure that both Sen. McCain and Sen. Obama have plenty to say in this vital area, and the first question tonight is ….”
Miss that bit of this year’s U.S. presidential debates? Don’t worry – everyone did.

Trade deficits and how much the government will wring out of businesses rank somewhere back in the lukewarm-simmer area of hot-button election issues. Politicos will tell you that a crowd won’t go into a frenzy about tariff rates or excise taxes.

Except, maybe, with the stone trade. With the overwhelming majority of material, machinery and tools for the industry coming into this country from elsewhere, the direction of foreign trade remains a very big deal. And with both candidates proposing a satchel full of government programs, business will likely pay most of the freight.

These discussions aren’t even at the forefront of this year’s candidate platforms (or plans or contracts or covenants or whatever sounds less political). Since nobody else seems to care, I took an afternoon to hunt through a number of documents and studies.

If you want to read the most about trade, Obama/Biden is the hot ticket. But, as you can guess, there’s a lot more of the politic than the practical.

The largest planks on trade with Obama deal with job outsourcing to foreign countries. Those companies that send jobs overseas shouldn’t get tax breaks (or deductions, to be precise). Companies backing the idea of keeping jobs here should get public contracts and tax credits (and I’ll get to that a bit later). Programs to retrain workers facing job dislocation should be expanded to service industries.

Fair trade in the Obama book, essentially, also opens up foreign markets to support U.S. workers. There’s a stated opposition to the Central American Free Trade Agreement, and the North American Free Trade Agreement should be renegotiated “so it works for American workers.”

All interesting points, but they also show little affect on the stone trade. Perhaps the only section of the Obama platform that may have an impact is a stated goal to use trade agreements “to spread good labor and environmental standards throughout the world.”

The McCain/Palin plank, by comparison, is succinct, but it’s not easy to nail down. Instead of any stated goals, it’s more of a handshake with the concept of the world economy.

For McCain, globalization is the way of the future with 95 percent of the world’s consumers outside our borders, and “we need to be at the table when the rules for access to those markets are written.

“To do so,” the statement continues, “the U.S. should engage in multilateral, regional and bilateral efforts to reduce barriers to trade, level the global playing field, and build effective enforcement of global trading rules.”

And that’s it. Basically, it’s more of the same policy we’ve seen in 2000s, and you’re the judge of whether it’s helped or hurt your business.

As far as corporate taxes, McCain’s plan is also short: Cut the rate from 35 percent to 25 percent. But, upon further review by the Washington-based Center for Tax Policy, don’t anticipate getting that cut all at once.

The current corporate federal-tax structure is based on four percentage marks: 35 (the highest), 34 (yes, the second-highest is one-percent less), 25 and 14. The McCain plan would eliminate the 35-percent level (and some associated surtax rates) right away, but the 34-percent rate would remain until 2010, when it drops to 30 percent. After that, the rate would drop by two percent every two years, and finally settle at 25 percent in 2015.

McCain’s plan, incidentally, also tinkers with capital-equipment depreciation rates, allowing for a full deduction in one year – but only for equipment that would depreciate in three or five years, and only between 2009-2013. (You also lose the ability to claim the interest deduction for that equipment.) After 2013, it’s back to the old depreciation schedules.

Obama stresses specific plans as far as individual tax rates, but his corporate-tax solution is a grab-bag. Some have no relation to the stone trade (such as eliminating loopholes on CEO-pay deductibility and enacting a windfall-profits tax on oil and gas concerns) and some have possible international impact, like a tax-haven watch list for countries not sharing tax-return data with the United States.

One proposal, as part of Obama’s trade plank, is a $3,000 tax credit for every job created by a U.S. business in 2009 and 2010. There’s also a current $250,000 provision for one-year equipment expensing by small businesses that the Obama plank would extend by another year.

One bit of semantics is the claim that Obama’s plan would raise taxes on small-business owners. Technically, that’s true – but that’s only those owners end up make more than $250,000 a year and declaring that as personal income (such as with sole proprietorships and some Subchapter S situations). It’s not the same as a corporate tax.

Maybe the debate moderators were right to steer clear of these, since the actual help/harm by either candidate remains, like a lot of things in this election year, fairly fuzzy. There really isn’t a specific edge when it comes to some important areas for the stone industry.

Don’t let that stop you, though, because this election isn’t all about business. However you make your decision, make sure to vote next Tuesday.

Emerson Schwartzkopf

You can read up-to-the-minute news on the dimensional-stone trade and search the archives at www.stonebusiness.net, where you can also find this blog at the Main Menu under the clever title of “Editor’s Blog.”

The advertisements that appear on this page are placed by wordpress.com, and constitute no endorsement of the products or services. And I don’t get a dime from them, either.

 

 

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Diversion/The Open Road

MOJAVE DESERT, Calif. – Some people go to Las Vegas to get away from it all. And after two days of the Trade Show Shuffle and elbowing through the crowd on The Strip, it’s a pleasure to get away from them.
The first moment of relaxation comes as I glide off Interstate 15, the main conduit between Las Vegas and Los Angeles. Just across the California border, there’s an exit marked as Nipton Road, but – for us desert rats – it’s the turnoff for our own bit of nirvana.

Don’t bother looking for the Nipton Road – or the next 144 miles I’ll drive today – in the Rand McNally Atlas. If it’s a detailed map, a few thin lines cross a huge expanse of, well, nothing. And that’s the beauty of it.

Suddenly, you’re in a different world from Las Vegas, with its packs of cars crowding The Strip, or the high-speed slipstream of the 15. (For some reason, Southern California argot demands an article in front of every highway number, as in “the 5” or “the 405.”) Your car is the only one on a two-lane trail with no routing at all, save for oddball names like Morning Star Mine Road or the Kellbaker Road.

This is the locally known Back Way between Las Vegas and Palm Springs, comprised of a series of San Bernardino County roads. And the 144 miles between the 15 and the high-desert town of Twentynine Palms, Calif., offers the best of absolutely nothing.

No police, except for an occasional National Park Service ranger. No billboards. No telephones. No cell-phone service. No rest area or water, outside of a visitor center for the Mojave National Preserve and a cafe in Amboy, Calif., that’s open on an irregular basis. The same goes for the lone gas pump in Amboy, which sat locked for the past four years.

It’s no drive for the squemish. The road lacks guard rails, and the shoulder is graded sand that traps tires with thin treads. A car may come along every 10 minutes or so. Or maybe in the next half-hour. Or ….

Or maybe you travel from road to road, seeing nobody. It’s a lonely cruise, and one that scares some of the bravest people I know. So why go this way, when there’s an interstate and well-traveled state highways that skirts around this barren patch?

Come over a crest, and the Mojave and Upper Colorado deserts show miles of scrub, sand and huge mountains rising out of flat desert floors. Part of the route goes through a literal forest of joshua trees. The Kelso Sand Dunes, covering 45 square miles, seem like a small sandbox in the center of it all.

Most of this is in the Mojave National Preserve, which Congressional Democrats created in one of their last acts of sitting as a majority in 1994. Incoming Republicans kept the area under federal control, but refused to fund any amenities. The result is a place that’s still undeveloped, raw and beautiful in its desolation.

This is also the open road, and one of the last you’ll see. Speedometers sometime point closer to 90 mph than 60 mph, and semis are prohibited along most of the route. You can forget about nutty drivers, cross traffic, stoplights or even stop signs. Instead, you can concentrate on driving, hugging corners and rollercoastering over a series of depressions.

You can stop at any time, roll down the window and hear … nothing. No squealing tires. No perfect chords of bubbling slot machines. No “Wheeel offf Fortune!” Just pure, clean silence.

It’s depressing to finally roll into a town, where the McDonald’s and Motel 6 and Taco Bell offer the pleasures of civilization. Eventually, the road leads home and back to work. But, for a few hours, I get a bit of Highway Zen and decompression from exhibits and giddy gamblers and the stress of the world.

Emerson Schwartzkopf

You can read up-to-the-minute news on the dimensional-stone trade and search the archives at http://www.stonebusiness.net where you can also find this blog at the Main Menu under the clever title of “Editor’s Blog.”

The advertisements that appear on this page are placed by wordpress.com, and constitute no endorsement of the products or services. And I don’t get a dime from them, either.

 

 

Editor’s Blog: 17 October, Las Vegas

For an event where expectations were uncertain at best, the 2008 StonExpo Marmomacc Americas seems destined to get a passing grade.
Or, as one exhibitor said, “you get what you get, and you’re happy.”
While some exhibiting companies turned out to be no shows – including a Chinese eight-booth cluster right across from the Stone Business stand – most vendors showed up yesterday morning to see if anyone came in the door. A crowd of several hundred showed up at 10 a.m. yesterday and today, with a steady, if not huge, feed of attendee throughout the early afternoon hours.
Exhibitors aren’t picky about customers, as long as there’s cash involved in the deal. Most manufacturers noted that business this year is off by 30 percent to 40 percent; there’s no lack of people willing to buy, but bank financing and leasing isn’t available.
That’s making the movement of large machines on the floor a bit tough. However, it’s a boon to tooling sellers and others with smaller-scale goods. Attendees are willing to buy something, as long as they can afford it.
And, they’re finding deals. One guy came in a booth looking for a spindle adapter for a grinding wheel he’d just bought. He didn’t mind the $50 or so for the adapter; the grinding wheel retails for $2,000, but he got it for $600.
Slower economic times often lead to more tire-kicking at a show, but exhibitors by and large praised the quality of the attendees. “At least we’re seeing decision-makers,” said one vendor. “They’re not buying now, but they’ll buy later.”
One advantage this year is that StoneExpo Marmomacc Americas isn’t the only game running in the Mandalay Bay Convention Center. The Barrett-Jackson automotive-auction show is running at the same time, with huge crowds milling through the facility. While few of the motorheads are going to wander into the show – in fact, some StonExpo exhibitors and attendees are sliding in to see the auction – it gives the whole building a fairly busy look.
Next year, StoneExpo Marmomacc Americas moves back to the Las Vegas Convention Center, and also slides down another week in October. The schedule move should give more European exhibitors a chance to exhibit at the large Verona show, and also give those attending both shows a little more of a breather.
And, in 2009, it’ll be another year. Hopefully, a better one.

Emerson Schwartzkopf

You can read up-to-the-minute news on the dimensional-stone trade and search the archives at www.stonebusiness.net, where you can also find this blog at the Main Menu under the clever title of “Editor’s Blog.”

The advertisements that appear on this page are placed by wordpress.com, and constitute no endorsement of the products or services. And I don’t get a dime from them, either.

StatWatch: Stone Imports, August 2008

The decline in granite imports continued through August, with most of the other dimensional-stone imports following suit – with the exception of a manic market in other calcareous.
The following is taken from data collected by the U.S. Department of Commerce and the U.S. International Trade Commission. All figures give are for August 2008 (along with a comparison with June 2007 data). “Worked” stone is material that’s been shorn from boulders and blocks, and then cut in standard dimensional measures (such as slabs and tiles) and polished.
 

Worked Granite Value

Total: $100,856,490 (-29.53%)

Sector leader: Brazil @ $33,052,716 (-34.52%)

Backfill: The strongest of the Big Four (Brazil, China, India, Italy) in granite imports is China; while it’s not the leader, its August 2008 total value of $25,167,640 is only 12% off from last August.

Worked Granite Volume

Total: 107.860 metric tons (-48.61%)

Sector leader: Brazil @ 38,451 metric tons (-50.13%)

Backfill: China’s 30,098 metric tons in August is a 26.98% decline from the previous years, but it’s the only one of the Big Four that didn’t suffer a 50% drop-off.

Worked Marble Value

Total: $28,096,774 (-14.94%)

Sector leader: Italy @ $14,560,919 (4.64%)

Backfill: Italy is the only exporter to increase August marble value from ’07 to ’08. Spain took the biggest hit, with its $2,788,822 showing a 38% loss.

Worked Marble Volume

Total: 20,234 metric tons (-31.8%)

Sector leader: Italy @ 6,976 metric tons (-20.03%)

Backfill: Every country falls from August ’07 amounts; Israel drops from fifth overall in ’07 to 11th in ’08 with a 68.83% decline in import volume.

Travertine Value

Total: $34,017,834 (-32.83%)

Sector leader: Turkey @ $21,448,691(-30.21%)

Backfill: China reports the only gain from August ’07; its $1,245,117 this August shows an improvement of not quite $10,000.

Travertine Volume

Total: 55,467 metric tons (-25.92%)

Sector leader: Turkey @ 35,469 metric tons (-32.96%)

Backfill: How much does Turkey dominate? Consider that Mexico placed second in travertine imports for August ’08 with 7,056 metric tons – and that’s nearly twice as much as the next country, Italy.

Other Calcereous Volume

Total: 37,245 metric tons (31.29%)

Sector leader: Lebanon @ 22.205 metric tons (200.51%)

Backfill: This market is literally all over the map in 2008 by countries shipping in unbelievable fits and starts; Turkey reported 88,661 metric tons this June, yet only 713 metric tons two months later.

Slate Value

Total: $9,176,111 (-17.98%)

Sector leader: China @ $3,989,915 (1.15%)

Backfill: China appears to be pulling ahead for good in its usual neck-and-neck competition with India to dominate this export category.

Emerson Schwartzkopf

You can read up-to-the-minute news on the dimensional-stone trade and search the archives at www.stonebusiness.net, where you can also find this blog at the Main Menu under the clever title of “Editor’s Blog.”

The advertisements that appear on this page are placed by wordpress.com, and constitute no endorsement of the products or services. And I don’t get a dime from them, either.

 

 

 

Verona Once Again

There are trade shows and conventions throughout the world for dimensional stone. And then there’s Verona.

The official name is Marmomacc (and the subtitle of “The 43rd International Exhibition of Stone Design and Technology” is pretty hefty), but you only need to say the name of the Italian host city. No matter where you’re at – and what language you speak – Verona says it all.

Some of Verona’s particular identity is its size. Some of it lies with its location in a stone-production center. And, there’s always the Italian factor.

For a quick study on what makes Verona unique, consider the official show program. Some large industry shows produce a fairly hefty magazine, but Verona throws the book at you – literally.

At 554 pages, cross-indexed by exhibitor name, types of product offered (with notations in four different languages) and countries represented, it weighs in at three pounds and sets you back a solid €30. It’s the Who’s Who of the international stone trade.

Armed with this tome, you can walk into the show … and be totally lost within ten minutes. Before the end of the day, you’re numb from the sheer overload of stone, machinery, tooling and everything else associated with the industry.

And, of course, that’s just the first day. There are three more to go.

The 800,000+ square feet of exhibition space at the VeronaFiere grounds actually isn’t that overwhelming in terms of size – the main convention complexes in Orlando and Las Vegas are larger. What Verona brings, though, are massive exhibits of what looks to be the biggest and best displays as you walk through a hall.

Then you walk into the next hall, and see even bigger displays. The same thing happens when you walk into the next hall. Then ….

…. Well, then you realize you have eight more halls to go, plus acres of outdoor displays. It’s like taking on the Prado early one morning with idea that you’d like to see a few nice paintings, and going on cultural sensory overload before lunch.

The sheer volume of goods is compounded by the Italian sensibility of style. You don’t slap up a portable display with a vinyl banner in Verona; even the simplest booths look clean and efficient. Stone might be in raw blocks or bundles of slabs, but it’s often displayed for maximum artistic effect.

As a result, few exhibtis are dull and boring enough to ignore. You want to look at all the goods, which hastens the blur effect. Since the stone displays continue outside, it’s hard to get away, so you end up heading to the concessions for yet another expresso, and the caffeine jolt is the last thing you need.

It took me a few years to settle with Verona. In a definite way, Marmomacc is its own city, and I learned the neighborhoods. Exhibitors return year-after-year to the same spots in the same halls, invariably with the same personnel. You gain trust by becoming a regular and more of a citizen than an attendee.

Marmomacc can be intimidating for the first-timer, but it’s something that teaches you a lot about the stone trade. The worldwide nature of the business comes alive, and you’ll be awed, whether it’s with stone with beauty you can’t see in a picture or the sheer size of a gang-saw flywheel.

Plus, you get several days of the culture of the Veneto in the bargain. It’s an experience that always leaves me tired, sore-footed, a bit exasperated – and inspired as well to be in this business. I’ll be back again, and hopefully I’ll see you there someday.

Emerson Schwartzkopf

You can read up-to-the-minute news on the dimensional-stone trade and search the archives at www.stonebusiness.net, where you can also find this blog at the Main Menu under the clever title of “Editor’s Blog.”

The advertisements that appear on this page are placed by wordpress.com, and constitute no endorsement of the products or services. And I don’t get a dime from them, either.