2009

Execs: Right Leadership, Training Key to Retaining the Right People

Human Resources in Wholesale Distribution, Management, Operations, Strategy, Subscriber Only / Lindsay Young

Two recent MDM interviews offered some perspective on retaining quality employees.

Graybar Senior Vice President and CFO Beatty D’Alessandro told me (at the recent NAW meeting in January) that the company keeps its focus on drawing employees who take a long-term view. He says finding the right people with the right values is crucial from the get-go, but that providing the right training and the right opportunities are just as important in keeping the right people in place. He says: "The model is built around people who are going to come and stay versus people who job-hop around the industry."

In the latest issue of MDM, Grainger’s new president of international businesses, Court Carruthers, says that nurturing employee development is a passion of his. A …

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Chicago Fed Midwest Manufacturing Index Falls 5.9% In January

Economic Trends, Free, News, Research & Analytics, Subscriber Only / MDM Staff

The Chicago Fed Midwest Manufacturing Index declined 5.9% in January, to a seasonally adjusted level of 85.6 (2002 = 100). Revised data show the index decreased 3.9% in December, to 91.0.

The Federal Reserve Board’s industrial production index for manufacturing fell 2.6% in January. Regional output in January was down 21.8% from a year earlier-lower than the 13.0% decrease in national output.

Regional auto sector production dropped 20.0% in January after moving down 1.8% in December. The nation’s auto output decreased 10.1%. The Midwest’s automotive output was down 42.2% relative to its year-ago value, and the nation’s auto output was down 24.3%.

The region’s steel sector output moved down 4.9% in January after …

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Actuant Sales Fall 25% In 2Q

Free, News, Subscriber Only, Top Distributor Sectors / MDM Staff

Actuant Corp., Milwaukee, WI, reported sales for the second quarter ended Feb. 28, 2009, were $300 million, down 25% from 2008. Core sales declined 27%. Profit for the quarter declined 86% to $3.2 million.

For the first six months, sales were $680 million, 17% lower than the prior year period. Profit was down 70% to $$14.8 million.

Normal seasonal weakness in the second quarter was compounded by he global economic conditions. The diversified industrial company will continue to implement restructuring and cost reduction actions to help offset the weaker demand, said CEO Robert C. Arzbaecher. We have reduced headcount, consolidated facilities, eliminated shifts and established short work week schedules to better align our production, inventory and costs with …

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Finding Opportunity in Inventory

Free, Management, Strategy, Subscriber Only / Lindsay Young

Distributors are slimming down.

The sudden drop in sales in November left many distributors with too much inventory and not enough demand. Maximizing cash flow has become the name of the game. To do this, distributors are paring down and better managing inventory. They are shortening their forecasting time frame (to consider just the past three months rather than the past half year or more), analyzing their replenishment processes (in many cases ordering more frequently), improving communication with vendors and returning to basic best practices in inventory management. Many are also digging more deeply into their technology tools to find ways to increase efficiencies in the inventory management …

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Behind the Surprising Uptick in February Housing Starts

Economic Trends, Free, Research & Analytics, Subscriber Only / Lindsay Young

Housing starts went up unexpectedly in February (+22.2% from January), but were still down 47.3% from February 2008. And while to some this might trigger some hope that we’re reaching the bottom, as the Chicago Tribune and other papers around the country have noted, most of the gain came from the multifamily sector, which includes apartments and condominiums. Starts in that sector rose more than 80%; single-family homes only gained 1.1%. On the bright side, that 1.1% is an improvement over the double-digit drops we have been seeing the past several months.

Economists are mixed as to whether the slight …

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Wholesale Prices Rise 0.1% in February

Economic Trends, Finance, Free, News, Research & Analytics, Subscriber Only / MDM Staff

Wholesale prices increased 0.1% in February, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported. This rise followed a 0.8-percent increase in January and a 1.9-percent decline in December.

At the earlier stages of processing, prices received by manufacturers of intermediate goods decreased 0.9% in February after falling 0.7% in the previous month, and the index for crude materials declined 4.5% following a 2.9-percent decrease in January.

The slower rate of increase in finished goods prices was led by the index for energy goods, which rose 1.3% in February after climbing 3.7% in the preceding month. Capital equipment prices also moved up less, rising 0.1% after increasing 0.5% in January. The index for consumer foods …

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Canadian Manufacturing Sales Fall 5.4% in January

Economic Trends, Free, News, Research & Analytics, Subscriber Only / MDM Staff

Source: Statistics Canada

Canadian manufacturing sales decreased 5.4% to $41.7 billion in January, falling to the lowest level in almost 10 years. Motor vehicle and motor vehicle parts industries, particularly in Ontario, reported record decreases during the month. Excluding motor vehicles and parts and accessories, manufacturing sales decreased a more moderate 1.2% compared with December.

Constant dollar manufacturing sales, which are measured in 2002 prices, fell 6.4% to $38.1 billion in January. This was the sharpest decrease in constant dollar sales since the current series started in 1997.

At the industry level, sales in 14 of 21 manufacturing industries decreased …

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A New Model Needed in the Steel Industry

Economic Trends, Free, Research & Analytics, Strategy, Subscriber Only / Jenel Stelton-Holtmeier

Steel prices have been wild this past year – from record highs in mid-July to the current barely-breakeven lows. Steelmakers have seen a dramatic decline in demand, with global output sinking about 25% in January and North American output down 50%, according to Reuters. The unprecedented volatility has left many people related to the steel industry wondering where things might go next.

While no one knows that answer, what they can do is prepare for the new economic reality that will come out of this global financial and economic crisis. This was the message presented by Pierre Mangers of PricewaterhouseCoopers Luxembourg at the Handelsblatt Stahlmarkt conference in Germany earlier this month.

Mangers told attendees that the steel industry needs a new …

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ERIKS Acquires German Distributor

Finance, Free, Mergers & Acquisitions, News, Power Transmission/Motion Control/Fluid Power, Subscriber Only, Top Distributor Sectors / MDM Staff

Dutch holding company ERIKS group has acquired Arnold Frommeyer GmbH & Co. KG, a German distributor of mechanical engineering components for use primarily in sealing technology, fluid technology, maintenance products and tools.

Frommeyer has 15 employees and generates annual sales of €3 million.

The acquisition further expands ERIKS' local presence in Germany, and continues to aid in expanding offered product lines. Frommeyer´s activities will be integrated in the existing ERIKS Germany regional service centre structure. …

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U.S. Housing Starts Up 22.2% In February

Building Materials/Construction, Economic Trends, Free, News, Research & Analytics, Subscriber Only, Top Distributor Sectors / MDM Staff

Privately-owned housing starts in February were at a seasonally adjusted annual rate of 583,000, 22.2% above January, but is 47.3% below February 2008, according to the U.S. Census Bureau and the Department of Housing and Urban Development.

Single-family housing starts in February were at a rate of 357,000; this is 1.1% above the January figure of 353,000. The February rate for units in buildings with five units or more was 212,000.

By region, housing starts in the Northeast were down 44.8% from February 2008; in the Midwest, they were down 45.5%. Starts dropped 42.5% in the South, and the West experienced a decrease of 59.1%.

Permits
Privately-owned housing units authorized by building permits in February were at a seasonally adjusted …

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Industrial Production Falls 1.4% in February

Economic Trends, Finance, Free, News, Research & Analytics, Subscriber Only, Top Distributor Sectors / MDM Staff

Industrial production fell 1.4% in February; the overall index has now declined for four consecutive months and for 10 of the past 12 months, according to the Federal Reserve.

At 99.7% of its 2002 average, output in February was 11.2% below its year-earlier level and was the lowest level since April 2002. Production in the manufacturing sector moved down 0.7%, with broad-based declines among its components.

An increase in the production of motor vehicles and parts after the extended plant shutdowns in January, however, added nearly a half percentage point to the change in manufacturing production. Outside of manufacturing, the output of mines moved down 0.4%, while a swing to above-average temperatures contributed to a 7.7% drop in the output of …

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International Wire 4Q Sales Drop 28.3%

Free, News, Subscriber Only, Top Distributor Sectors / MDM Staff

Camden, NY-based International Wire Group, Inc. reported sales for fourth quarter 2008 were $126.7 million, down 28.3% from fourth quarter 2007. The wire manufacturer recorded a loss of $8.7 million, a decrease of $11.2 million from the prior year.

Lower sales volume and the significant decline of the price of copper in the fourth quarter contributed to the decline. From September to December 2008, the monthly average copper price dropped by 55.8%.

Sales for the year ended Dec. 31, 2008, were $736.4 million, up 0.8%, from 2007 levels. Higher sales volume from the Hamilton Products and Global Wire acquisitions contributed to the increase. Profit for 2008 was $6.5 million, down 59.1% from the prior year. …

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ITW 1Q Sales Down 21%

Companies, Free, News, Subscriber Only, Top Distributor Sectors / MDM Staff

Illinois Tool Works Inc., Glenview, IL, reported operating revenue decreased 21% for the three months ended Feb. 28, 2009. The decline was due to a 20% decrease in base revenues and a 7% fall off in contributions from currency translation. Acquisitions contributed 7%. Significantly lower than expected end market activity in North America, Europe and Asia in January and February also contributed to the decline in operating revenues.

On a segment basis, the Company’s three month moving average percentage change for operating revenues, comprised of base revenues, acquisitions/divestitures and currency translation, is provided below:

Industrial Packaging: -27.7%
Power Systems and Electronics: -26.9%
Transportation: -25.0%
Food Equipment: -15.5%

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Cooper Industries Buys IMS

Electrical, Finance, Free, Mergers & Acquisitions, News, Subscriber Only, Top Distributor Sectors / MDM Staff

Cooper Industries, Houston, TX, has acquired Irvine, CA-based Illumination Management Solutions, Inc., a manufacturer of specialized optics and system design for light-emitting diode (LED) fixtures. Terms of the transaction were not disclosed.

The acquisition of IMS demonstrates Cooper’s ongoing strategic commitment to become a market leader in energy-efficient solid state lighting solutions, said Cooper Industries’ CEO Kirk S. Hachigian. “The acquisition of IMS and the talent it brings into our organization strongly complements our technology investments by adding enhanced capabilities in LED-systems and optical design.”

IMS designs and manufactures LED systems and fixtures for a variety of lighting applications in roadway …

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Graybar Sales Grow 2.7% in 2008

Companies, Electrical, Free, News, Subscriber Only, Top Distributor Sectors / MDM Staff

Graybar, St. Louis, MO, distributor of electrical and communications products and related supply chain management and logistics services, reported sales were $5.4 billion in 2008, an increase of 2.7% from 2007. The company also posted profit of $87.4 million, up 4.8%.

CEO Robert Reynolds said: "Our employee ownership model drives us to consistently focus on serving our customers and manufacturing partners. The results of our efforts are reflected in Graybar’s healthy financial statements, including our low debt position. We are well positioned for these uncertain times and believe we are equally well prepared for when the economy turns the corner.” …

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Embarq Sells Logistics Subsidiary to KGP Telecommunications

Electrical, Finance, Free, Mergers & Acquisitions, News, Subscriber Only, Top Distributor Sectors / MDM Staff

Embarq Corp., Cleveland, OH, has sold its EMBARQ Logistics subsidiary to KGP Telecommunications Inc., according to a release from Vetus Partners.

The logistics subsidiary comprised $0.4 billion, or 7%, of overall revenue for Embarq.

EMBARQ Logistics is a wholesale distributor of equipment, materials and supplies to the telecommunications industry. It serves more than 2,000 customer accounts with more than 140,000 items from seven distribution centers throughout the U.S.

Though it was a "critical component" of EMBARQ’s supply chain, the logistics subsidiary was non-core.

Vetus Partners served as financial adviser to Embarq for the transaction.

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Lawson 4Q Sales Down 13.6%

Companies, Facilities Maintenance (MRO), Free, News, Subscriber Only, Top Distributor Sectors / MDM Staff

Lawson Products, Inc., Des Plaines, IL, reported sales of $106.8 million for the fourth quarter 2008, down 13.6% from the prior year. A loss of $5.4 million was recorded, compared with profit of $4 million for the fourth quarter 2007.

For the full year, sales decreased 5.3% to $485.2 million in 2008 compared to $512.5 million in 2007 primarily as a result of the global economy’s significant pullback in the fourth quarter of 2008. The loss for the year was $27.6 million; for 2007, profit of $10.6 million was reported.

Costs related to the settlement of the investigation by the U.S. Attorney’s Office for the Northern District of Illinois, severance costs, unclaimed property expenses and the goodwill impairment charge totaled $43.2 million in 2008 …

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Canadian Price Indexes Halt Rapid Declines in January

Economic Trends, Free, News, Research & Analytics, Subscriber Only / MDM Staff

Canadian price indexes for manufactured goods declined slightly in January, while the index for raw materials rose 1.4%. The strong downward movement registered by these two indexes during the previous two months halted in January, with petroleum prices strengthening on world markets.

The Industrial Product Price Index (IPPI) decreased 0.1% in January, stabilizing after declines of 2.8% in November and 2.1% in December. Prices for petroleum and coal products increased 1.6%, after registering five substantial monthly declines in a row.

Excluding petroleum and coal products, the IPPI fell 0.2%, a third monthly decrease following declines of 0.6% in November and 0.4% in December. Of the 20 major groups, 12 posted a price decrease, …

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MDM March 10, 2009

Subscriber Only / MDM Staff

This is the pdf of this issue of Modern Distribution Management. Apply the full $24.95 pay-per-view cost toward an annual subscription (within 30 days of purchase), which includes two issues a month plus access to more than six years of online archives and market data. Call 1-888-742-5060 or email info@mdm.com to …

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MDM Industrial Inflation Index: January 2009

Economic Trends, Research & Analytics, Subscriber Only / MDM Staff

Modern Distribution Management’s January Inflation Index, which measures a cross-section of industrial supplies, was up 0.15% from the previous month, and up 7.49% from January 2008.

Please click below to view a print-ready pdf of the MDM Inflation Index for January 2009, listing the 10 individual product categories that make up the …

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Execs: Right Leadership, Training Key to Retaining the Right People

Chicago Fed Midwest Manufacturing Index Falls 5.9% In January

Actuant Sales Fall 25% In 2Q

Finding Opportunity in Inventory

Behind the Surprising Uptick in February Housing Starts

Wholesale Prices Rise 0.1% in February

Canadian Manufacturing Sales Fall 5.4% in January

A New Model Needed in the Steel Industry

ERIKS Acquires German Distributor

U.S. Housing Starts Up 22.2% In February

Industrial Production Falls 1.4% in February

International Wire 4Q Sales Drop 28.3%

ITW 1Q Sales Down 21%

Cooper Industries Buys IMS

Graybar Sales Grow 2.7% in 2008

Embarq Sells Logistics Subsidiary to KGP Telecommunications

Lawson 4Q Sales Down 13.6%

Canadian Price Indexes Halt Rapid Declines in January

MDM March 10, 2009

MDM Industrial Inflation Index: January 2009

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