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EXECUTIVE MEMO
March 7, 2007

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Are you dazed, confused and stunned about new utility rates? The IMA can help. Contact Mark Frech at 217-522-1240, ext. 3022, or e-mail mfrech@ima-net.org.

BRIEFLY:

Employer credit of up to $600 for hiring veterans
The State of Illinois is promoting the hiring of the state's military heroes with a new tax incentive for businesses. Employers can now earn income tax credit of up to $600 for every qualified veteran they hire. Beginning with tax year 2007, Illinois employers can earn tax credits for hiring veterans who have recently been on active duty overseas. Employers can earn the new Veteran's Tax Credit of five percent of total wages paid, up to a maximum of $600 annually for wages paid to each veteran hired after January 1, 2007. The veteran must work at least 185 days during the tax year for the employer to qualify. The credit is available for veterans who were members of the Armed Forces, the Armed Force reserves, or the Illinois National Guard on active duty in Operation Desert Storm, Operation Enduring Freedom or Operation Iraqi Freedom.

For more information go to: http://www.state.il.us/agency/dva/.

March is Brain Injury Awareness Month
Brain Injury Awareness Month is dedicated to helping the public learn more about brain injury, and to improving the lives of individuals living with brain injury and their family and caregivers.

Traumatic brain injuries (TBI) contribute to a substantial number of deaths and permanent disability each year. CDC estimates that 5.3 million Americans — about two percent of the U.S. population — currently have a long-term or lifelong need for help to perform the activities of daily living due to TBI. Each year in this country, at least 1.4 million persons sustain a TBI. Lifetime costs of TBI totaled $60 billion in 2000 — this includes direct medical and indirect costs such as lost productivity.

In 2003, an estimated 28,819 persons were hospitalized with a TBI-related diagnosis in nine reporting states. For all age groups combined, rates were higher among males. The two leading causes associated with TBI-related hospitalizations were unintentional motor-vehicle-traffic crashes and falls. Helping to identify these risks can aid states and communities in designing and implementing effective injury prevention measures. To learn more about CDC's TBI-related activities, educational materials, and research, please visit http://www.cdc.gov/ncipc/tbi/TBI.htm.


Chicago Business Barometer™ slips again in February

With the Barometer ducking into growing retreat in February, is the number just a number or something more? From a recent peak of 67 (March 2005), the Barometer fell irregularly. While a reading below 50 indicates a non-growing economy, the 23 months of a downward trend provides a basis for considering the potential economic growth over the next year or so. Just as a falling barometer tells the weather forecaster of an impending storm, for almost two years, the Chicago Business Barometer points to an impending slowdown or worse. Thus the Chicago Business Barometer reports that a small majority of businesses reported lower business activity in February compared to January. While the Barometer's monthly snapshot provides a perspective on current business activity, the longer term trends, indicated by the three month moving average, provide early warning of either slowing or accelerating economic activity. By either measure, January was weak and February was weaker, suggesting that 2007 is taking on the robes of concern woven in the past two years.

Stepping back from the February report, a "good" report would have consistent upward trends in most indexes. Even modest price increases would indicate a strong economy with sufficient demand to allow businesses to build profit margins and feed further growth. In this "good" world, the Buying Policy indexes grow at a modest rate, encouraging a bit of anticipatory buying to give further support for a growing economy. Inventories would slowly fall relative to sales so that "mistakes" in overestimating customer demand would be more easily worked off. The February Chicago Purchasing Manager report falls short of such an idyllic, generously growing economy on most fronts.

With the run-up in commodity prices, many were concerned that a tipping point could be reached where anticipatory buying ahead of price increases would lay the foundation for investment to morph into speculation. As it is, the Prices Paid measure fell dramatically from 88 in June 20006 to 55 in January before reversing course in February. To the extent that rising inflation is the sign of strong demand, the rise is welcomed . . . however the possibility of passing through rising costs is not as remote as it was only a month ago.

Beyond the price concerns, the January Chicago Purchasing Managers' survey revealed a report that is not only consistent but continues to be worrisome. The fall in New Orders grew weaker in February, but at a slower rate, while the breadth of rising Production and Order Backlogs softened.

These factors, together with a increased breadth of Inventories, indicate clouds here and on the horizon. The Employment index is basically flat over the past four months, and not supportive of increased demand in 2007. Supplier Deliveries, with faster deliveries meaning slower business, was a light of hope in January that grew dimmer in February.

While often called a "manufacturing" report, the Chicago Purchasing Manager Survey includes the full range of economic activity, including the non-profit and service sectors. Similarly, the survey of local purchasing managers involves business activity of their firms, regardless of the location of that activity. Moreover, the Chicago Business Barometer was designed to reflect future national economic activity.

Source: Jack L. Bishop Jr, PhD, Kingsbury International Ltd.


DOE'S Industrial Technologies Program: "Save Energy Now"

The U.S. Department of Energy (DOE) Assistant Secretary for Energy Efficiency and Renewable Energy Andy Karsner recently announced the completion of Energy Savings Assessments (ESAs) at 200 of the largest industrial facilities in the nation, identifying opportunities to save over 50 trillion Btus of natural gas — roughly equivalent to the natural gas used in 700,000 American homes. In 2007, DOE will conduct 250 additional Energy Savings Assessments and offer cost-sharing options with industry, utilities and other partners.

"Working with our industry partners, the Department of Energy has surpassed our expectations and found huge opportunities for saving energy," DOE Assistant Secretary Karsner said.

DOE's Energy Savings Assessments directly works toward goals outlined in President Bush's Advanced Energy Initiative, which seeks to change the way we power our cars, homes and businesses. The total value of energy savings identified is close to half a billion dollars per year. These energy savings, if fully implemented, could reduce carbon dioxide emissions by 3.3 million metric tons annually, representing approximately seven percent of the total U.S growth in carbon dioxide emissions from 2004 to 2005. For more information on the 2006 ESAs, visit: http://www.eere.energy.gov/industry/saveenergynow/partners/results.cfm.

DOE's Energy Saving Teams visited 200 of the nation's most energy-intensive manufacturing facilities over the past 12 months. The teams worked with plant personnel to identify savings opportunities that typically amounted to 5-15 percent of a plant's total energy use — saving an average of about $2.5 million per plant annually.

The 2007 Energy Saving Assessments will be selected through an on-line application process now underway. Plants interested in applying for a 2007 assessment should visit the Save Energy Now website at http://www1.eere.energy.gov/industry/saveenergynow/assessments.html. These assessments analyze pumps, fans, and compressed air systems in addition to process heating and steam systems. The website also offers training opportunities, software assessment tools, technical tips and publications suitable for plants of all sizes.


Still haven't made a decision about your electricity supplier? Constellation NewEnergy can help

As most of you know, the beginning of 2007 ushered in new ComEd and Ameren utility rates. The new electric supply rates provided by these utilities will result in significant increases in electricity costs for many Illinois manufacturers and IMA members. Some estimates project the utility electric rate increase to be up to 50 percent or more for businesses dependent upon many factors some of which include your service territory, your prior rate classification, your electric usage pattern and your facility's load factor.

Everyday, the reality and magnitude of the utility based electric cost increase is becoming clearer as manufacturers and IMA members throughout Illinois are receiving their electric bills reflecting the first full month of usage at the new rates. For some, feelings of disbelief and confusion are pervasive and many are finding it hard to swallow or absorb the cost increases. To say the least, sticker shock has set in and some may feel that there is no solution to mitigate these increases.

This is not the case, however, as many of your fellow IMA members have found a solution to reduce the impact of the utility rate increase by working with Constellation NewEnergy. We strongly encourage you to join your fellow association members in finding solutions with Constellation NewEnergy, the IMA endorsed energy supplier and the leading competitive electricity supplier for businesses in Illinois and throughout North America, serving nearly 2/3 of the Fortune 100 companies.

Constellation NewEnergy and the IMA have a long standing history and valuable energy partnership providing IMA member companies reliable and dependable services on financially sound terms.

In aggregate, Constellation NewEnergy is supplying electricity to 932 members of the IMA representing 1,402 accounts who collectively will be recognizing an estimated $30 million in savings over the course of their current electricity supply contracts. Please refer to the table below for specific examples of estimated savings attained by current IMA members served by Constellation NewEnergy (reflective of the entire contracted time period).

Isn't it time that you find out if you can reap the same benefits as your fellow IMA manufacturing members. It is easy to get started by simply visiting http://www.electricityIQ.com/illinois to request a free rate quote. After submitting the quote request, Constellation NewEnergy will analyze your specific electrical usage information and consumption patterns and help you understand the best options and solutions available for you to combat the new utility electric rates.

Constellation NewEnergy offers you more than just great prices, local service and a 94 percent customer satisfaction rating. From free access to its online energy management tools to natural gas management and demand-side energy services, Constellation NewEnergy is your comprehensive energy resource.

To learn more about the Illinois electric market and to compare your supply options, go to http://www.electricityIQ.com/illinois.

Company Description

Size

Srvc Territory

Est. Savings

Manufacturer of metal stampings: tools, dies and fixtures; bolts, nuts, rivets, etc.

210 kW

ComEd

$3,732

Manufacturer of spiral tubes and fiberboard furniture parts

292 kW

Ameren

$3,583

Manufacturer of gift and invitation related products for embossing

405 kW

ComEd

$9,862

Manufacturer of metals, steel and aluminum products and parts

402 kW

Ameren

$6,261

Manufacturer of drilling and boring tools

700 kW

ComEd

$264,680

Manufacturer of snowmobiles and motorized water craft vehicles

1.376 MW

Ameren

$259,829

Manufacturer of welded steel tubing and tubular components

1.631 MW

ComEd

$544,774

Manufacturer of electrical/electronic, wireless, sensing and optical technologies

2.421 MW

Ameren

$894,162

Manufacturer of tool boxes and other tool storage devices

2.603 MW

ComEd

$730,890


Providing military leadership to corporate America

Anticipating future "Baby Boomer" retirement trends and the impact on Corporate America — and industries such as aviation, steel, and energy/oil and gas losing from 40-50 percent of their workers in the next five years — the question America's top companies are asking is this: ‘Where do we find future leaders?'

The answer, to many, becomes more difficult because most current corporate leaders understand that leadership is not easily trained. Companies are learning to live by the "Hire Talent, Train Skills" mantra. This is where Orion International, the nation's largest military consulting and placement firm, and its corporate post-military hiring model comes into play.

"Orion is in business for two main reasons. First, we want to be the top provider of military leadership candidates to America's companies. Secondly, we strive to provide our honorable service members with what is in short supply when they exit the service — we listen, consult and treat them with the honesty and dignity they deserve," said Orion International President Mike Starich, a former Marine Corps Officer, adding, "In short, we get them the civilian jobs they want to have."

Orion will introduce to the 20-30 military-friendly employers at each of the four Distinguished Candidate Hiring Conferences throughout 2007 the most highly qualified former military candidates the U.S. military has to offer.

Orion first held the Distinguished Candidate Conference (DCC) in Dallas, Texas in March of 2006, and given the dramatic success of the event – for both candidates and clients alike — the company then quickly drew up plans for a minimum of five top quality hiring conferences throughout 2007: the firm will host DCCs in San Diego–April 16-17, Baltimore–May 21-22, and Washington, DC–December 3, in addition to two DCCs in Dallas in 2007.

Employers couldn't be happier with the candidates the DCCs yield, and equally the level of customer service they receive from Orion: "We have evolved from using many junior military officer recruiters to using just Orion," said Tony Colucci, General Electric's Consumer and Industrial Products HR manager and military recruiting coordinator, adding, "The quality of candidates from Orion International has been unsurpassed. Orion's great service and great candidates are an unbeatable combination."

Orion International is the nation's largest military placement firm and is operated and run by former military Veterans who fully understand the uniqueness and intricacies of military members transitioning into the civilian sector of industry. To learn more, please visit http://www.orioninternational.com, or call 800-872-5002.


NEW Website offers outstanding training opportunities:

http://www.ima-net.org/MIT/

Training is no longer a luxury, but a basic ingredient in the development of a business. In today's economy, with companies struggling to prevent lay-offs and closure, it is vital to maintain a competitive high performance workforce.

In response to this growing need, the IMA has launched a new service — the Manufacturers' Institute for Training (MIT). We have expert trainers in the fields of safety, quality, leadership/management, communications, lean manufacturing, project management, IT, and much more. Customized, on-site sessions can also be arranged to address your company's specific needs or issues. Visit http://www.ima-net.org/MIT/ on the Web or contact Judy Parker, IMA Director of Training, at 217-522-1240, ext. 3036, or email jparker@ima-net.org.


Worker privacy is under assault by Congress

Every member of Congress was elected to office via a federally supervised, secret-ballot election. For the past seven decades, the United States has used the same fair system for union certification.

But that could soon change. The House passed HR 800 on March 1. The bill now goes to the Senate for a vote. This "card check" legislation would overturn seven decades of precedent by eliminating the federally supervised, secret ballot process for certifying union representation. The sponsors of the bill have cleverly titled the measure the Employee Free Choice Act, but this bill, HR 800, actually undermines employees' free choice.

If enacted, HR 800 would establish an unprotected process where a union is recognized in a workplace if a majority of workers simply sign a card in the presence of union organizers. Under this system, there is no right to privacy for workers, and no practical protection against the threats and intimidation that sometimes attends aggressive union organizing efforts.

There is no reason to toss out 70 years of labor-law precedent. Current National Labor Relations Board procedures already lead to swift and fair elections. Most elections are held within two months and unions win 55 percent of the time.

Interestingly, though the AFL-CIO is pressing hard for HR 800, it has argued that in union decertification petitions, secret ballot elections "provide the surest means for avoiding decisions which are the result of group pressures and not individual decisions." It's like playing baseball with one set of rules when you are at bat, and another set of rules when you're in the field.

The Coalition for a Democratic Workforce is launching a full-force effort to stop this ill-conceived measure. As the coalition notes, the only to way to guarantee worker protection from coercion and intimidation is through the continued use of a federally supervised, private ballot election. Personal decisions like this should continue to remain private. The NAM is a leader in this coalition. We will continue to work aggressively against HR 800 in the Senate.

Author John Engler is President of the National Association of Manufacturers.


Small businesses are job creators

It is easy to be an advocate for small business. Small firms account for half of our gross domestic product, employ half of the American workforce, and generate most of our net new jobs. Moreover, small business patents push the boundaries of technology, and their innovations are the source of new markets, enhanced competition, and expanded economic growth and employment. It is no wonder that politicians of both parties are eager to embrace entrepreneurs.

From time to time, small business advocates are challenged by those who feel that the importance of small businesses to the economy is exaggerated. These arguments are not new. A recent article in an American Enterprise Institute magazine, for instance, attempts to refute the net job creation of entrepreneurs; but this article, like the ones that came before it, is simply inaccurate. Thirteen months ago, the U.S. Bureau of Labor Statistics found that small businesses generated 65 percent of the net employment growth between September 1992 and March 2005, confirming similar data from the U.S. Census Bureau.

Far from a myth, the reality is that most net job creation takes place in the first two years of a firm's existence and within firms that employ fewer than 20 workers. Many of these firms will become fast-growing "gazelles" that will eventually grow to be large firms that employ hundreds or thousands of people. That growth is due to the hard work, innovation, and risk-taking by entrepreneurs who have a vision for the future and the passion to turn dreams into reality.

Many of those who attempt to deny the data on small business and job creation also take issue with attempts to level the playing field for small firms by reforming rules and regulations. However, Office of Advocacy research by Dr. Mark Crain shows that firms with fewer than 20 employees annually pay 45 percent more per employee to comply with federal regulations than their larger counterparts do.

Clearly, one-size-fits-all regulatory approaches have much larger impact on small businesses. Moreover, many times these firms are caught in a web of safety, tax, and environmental regulations when small businesses are not part of the problem that the regulations are attempting to solve. Over 25 years ago, Congress recognized this dilemma and passed the Regulatory Flexibility Act (RFA). Simply stated, the RFA helps protect small business from unnecessary regulatory burdens. It requires federal regulators to draft small business impact statements whenever they propose new rules. Also, the RFA requires that agencies consider less burdensome alternatives that do not undermine the intent of the regulations.

Ensuring that small businesses are taken into consideration when new regulations are being written does not give small businesses an unfair advantage. It merely helps level the playing field and allows small business owners to focus their attention on what they do best — create innovative new products and services, generate jobs, and grow the economy.

As evidenced by reputable research and statistics, entrepreneurs play a unique role in our economy; they are dynamic, creative, innovative, and job-creating. Policymakers and academics appreciate their importance to economic growth and future employment. To do otherwise would be a serious omission.

Author Ray Marchiori is the Office of Advocacy Regional Advocate for Illinois. He is the direct link between small business owners, state and local government agencies, state legislators, small business associations, and SBA's Office of Advocacy. Contact Ray Marchiori at 312-353-8614 or raymond.marchiori@sba.gov.


Maintenance software for manufacturing plants, industrial and commercial facilities

SMGlobal Inc. announces the release of FastMaint Web CMMS 5.0 for maintenance management. FastMaint is a computerized maintenance management solution (CMMS) suitable for manufacturing plants, industrial/commercial facilities, and fleet maintenance as well as other equipment maintenance. FastMaint Web is the web browser version of FastMaint. It adds to the stand-alone and networked editions of FastMaint. Customers have a choice of using a built-in web server or Microsoft's Internet Information Server.

All editions of FastMaint are designed to be "fast" and easy to install. Both planned and preventive maintenance tasks can be scheduled, managed and tracked. An integrated inventory system allows one to track inventory use and when to reorder parts. Maintenance managers can plan ahead and budget work for the week, month, quarter, year or any defined period. One can easily create work orders and collect feedback on jobs done.

It is available in stand-alone, networked and web editions. Fully functional trials can be downloaded from http://www.smglobal.com.

Prices start at $995 for the single user FastMaint Standard.

Founded in 2002, SMGlobal Inc. is based in Apex, North Carolina, and has been a member of Microsoft's Certified Partner program since 2004. For more information, contact SMGlobal at 919-647-9440 or visit http://www.smglobal.com.


DATES OF NOTE:

More events may be found at http://www.ima-net.org/calendar.cfm

April 24, 2007
IMA EVENT—HR Networking Forum
Oak Brook Executive Plaza, 1225 W. 22nd St., Suite 140, 9:30-11:30 AM

Back by popular demand, this free HR Networking Forum is designed for building relationships with other HR professionals in the manufacturing field. Manufacturing Members and Associate Members of the IMA are invited and encouraged to attend. Discuss similarities and differences on current HR issues among peers as well as potential solutions. Participants will also be invited to provide valuable feedback and suggestions for HR related IMA member services. More Information: Visit https://www.ima-net.org/0407_seminar.cfm

April 24, 2007
IMA EVENT—Current Issues Affecting Managing Your Employees: Investigating on-the-job accidents & Fraud in Workers' Compensation claims AND Workplace Immigration—an intensive update on the HR issue of the decade.
Oak Brook Executive Plaza, 1225 W. 22nd St., Suite 140, 1:00-4:30 PM.

Stay up to date on the latest employment-related issues facing your organization. IMA's employment law expert Jim Spizzo, and his partner, Gabrielle Buckley, both of Vedder Price Kaufman & Kammholz, P.C., will discuss in depth recent trends, cases and new legislation regarding these topics. Bring your personnel/ human resources questions. COST: $125 for IMA members; $100 for each additional attendee from the same company and $200 for non-members.additional attendee from the same company and $200 for non-members. More Information: Visit
https://www.ima-net.org/0407_seminar.cfm

For more information on the programs above, contact: Kimberly McNamara, 800-875-4462, ext. 2109, or email: kmcnamara@ima-net.org

May 2, 2007
IMA EVENT—Business Day in Springfield

Join hundreds of manufacturers from all across Illinois for this one-day event in the state capitol. Lobby your elected officials and let them know how you feel about proposed tax increases, employer-paid universal health care and runaway state spending. Watch this space for registration information. Sponsorships are available. Contact: Mark Denzler, 800-875-4462, ext. 3008, or email: mdenzler@ima-net.org.


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