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BRIEFLY:
Provide input on export controls and safety of imported products
The Bureau of Industry and Security (BIS) of the Commerce Department is reviewing the foreign policy-based export controls to determine whether they should be modified, rescinded or extended and is seeking comments on how export controls have affected exporters and the general public. Comments must be received on or before October 5, 2007. Submit your comments, identified by Docket ID No. EPA–R07–OAR–2007–0655, by one of the following methods: Go to
http://www.regulations.gov. Follow the on-line instructions for submitting comments, email: jay.michael@epa.gov, or mail to Michael Jay, Environmental Protection Agency, Air Planning and Development Branch, 901 North 5th Street, Kansas City, Kansas 66101.
Doing business in China — Models for success — Wednesday, October 17th
The ability to reach key audiences in China, one of the world's largest and fastest growing economies, has become a global priority for many companies. Whether you're planning a communication program in Shanghai, Beijing, Shenzhen or in Guangzhou, the top areas for public relations activity in China, or simply looking for advice on how best to tackle the challenges when doing business in China, a panel of leading experts will share best practices, recommendations and tips on what works best. Sponsored by PR Newswire. Breakfast and registration: 8:00-9:00 am; presentation and Q&A: 9:00-10:30 am, at Columbia College, Ferguson Theater, 1st Floor, 600 S. Michigan, Chicago, IL 60605. For more information, contact David Korvah, 866-290-9691, email
david.korvah@prnewswire.com.
Bison sponsors petting zoo at annual Scarecrow Festival, October 5-7, 2007
Bison Gear & Engineering, in conjunction with the St. Charles Convention & Visitors Bureau, is a proud sponsor of the 22nd Annual St. Charles Scarecrow Festival. Bison will be sponsoring the petting zoo at this years festival and BisonCares will be sponsoring a food booth with popcorn,
cotton candy and balloons. Cretors, the people who invented the popcorn machine, will be donating a popcorn and cotton candy machine. You can see, and cast your vote for, Bison's Electric Motor Driven Scarecrow at the Festival.
presented by Constellation NewEnergy and the Illinois Manufacturers' Association
2007 IMA powerseries energy seminars — Illinois' new electricity market . . . options, opportunties & strategies — 4 opportunities to learn:
COLLINSVILLE
Wed., Sept. 26, 1-3:00 pm
Gateway Center, One Gateway Drive
Registration & Lunch, 12:00 noon-1:00 pm
PEORIA
Thur., Sept. 27, 9-11:00 am
Hotel Pére Marquette, 501 Main Street
Registration & Breakfast, 8:00-9:00 am
DOWNERS GROVE
Fri., Oct. 5, 1-3:00 pm
Marriott Suites, 1500 Opus Place
Registration & Lunch, 12:00 noon-1:00 pm
WEBINAR
Wed., Oct. 10, 9-11:00 am
Log-in details will be sent with confirmation.
Reserve your seat today . . . Register online at http://www.regonline.com/IMAPowerseriesFall2007
or call Janie Stanley at 217-522-1240, ext. 3020
Governor continues efforts to tax Illinois business
Illinois Governor Rod Blagojevich is continuing his quest to eliminate and repeal a number of existing state tax credits to fund his proposals even though the General Assembly has rejected those proposals as being detrimental to the economic health of the state.
Starting last winter, the governor attacked Illinois' business community and made accusations that Illinois employers were not paying their "fair share" of state taxes. He tried to sell a massive gross receipts tax initiative, but ultimately failed. Now, the governor is demanding that the General Assembly close what he terms tax "loop holes" to raise hundreds of millions of dollars for new spending. The latest proposal would:
- repeal the Single Sales Formula, a $70 million hit to manufacturers;
- eliminate the Manufacturers' Purchase Credit (MPC) —$30 million;
- decouple from 2004 federal tax legislation (qualified production activities deduction) — $39 million;
- repeal deduction for foreign and domestic dividends received by corporations — $100 million;
- end deduction for company owned life insurance —$9 million;
- tax canned software which is subject to written license agreement — $65 million;
- extend the insurance tax to industrial insurance —$15 million;
- repeal exemption for fuel transported to out of state destinations — $45 million;
- cap the amount of sales tax revenues large retailers are allowed to keep — $100 million;
- require income tax withholding on gaming winnings over $1,000 from non-residents, raising $4 million; and
- include Puerto Rico and the outer continental shelf in definition of U.S. raising $30 million.
These changes would raise $507 million in new revenues that the Governor has proposed spending on everything from health care to capital projects to financing a bailout of the Regional Transportation Authority to reducing the state's pension debt.
Thus far, the governor's demands have not gained widespread support in the General Assembly, with many legislators taking the stand that Illinois should live within its means. In fact, the overwhelming majority has rejected the numerous new programs and massive increased spending proposed by the governor. That includes a unanimous rejection in the House of the governor's ill-fated Gross Receipts Tax proposal last May.
Still, as late as mid-September, the governor was again proposing that business carry the brunt of a transportation bailout. However, even if the legislature had approved the proposal, it would have raised only half of the money transportation officials say is needed.
The IMA expects Governor Blagojevich to continue attacking the state's employers this fall and next year, calling for more taxes while hoodwinking taxpayers that his grandiose proposals will cost them nothing. The IMA will continue its role in opposing higher taxes targeted solely at business owners.
How would the Blagojevich Tax Plan affect you?
The IMA has been fighting against the Blagojevich Tax Hike Plan all year. However, it's important for individual legislators to understand exactly how repealing these tax credits affect jobs in Illinois. We'd like to share your story. Email Jim Nelson, jnelson@ima-net.org with your two or three paragraph statement on how higher taxes will affect your company and the jobs it creates for Illinois' working families, and we'll convey your concerns.
Annual Holiday Survey Report . . . now ONLINE!
http://www.ima-net.org/08IMAHolidayRpt.pdf
The IMA's Annual Holiday Report highlights employers' plans on select holidays throughout the year. This year's survey was conducted from August 10-31, 2007 for the 2008 calendar year. Four questions were asked ranging from total number of paid days off to a breakdown of full or half day paid holidays, and on which days the member company is actually closed throughout the year. Nearly 450 IMA members responded.
For the results, visit http://www.ima-net.org/08IMAHolidayRpt.pdf.
Survey indicates positive growth for small, middle-market companies
Many Illinois manufacturers and wholesale distributors lack global strategies, are overlooking risk and underusing tax credits and government programs
The manufacturing and wholesale distribution segments in Illinois continue to see positive growth across several industry segments, according to the RSM McGladrey 2007 Manufacturing and Wholesale Distribution National Survey.
Conducted this spring, the fourth annual RSM McGladrey survey provides insights into what CEOs, CFOs and other senior industry executives are thinking, doing and planning to grow their businesses in an increasingly competitive marketplace. Industry executives were asked questions about cost structure, profitability, technology initiatives, operations, globalization and more.
Of the 947 surveys completed by executives of manufacturing and wholesale distributor companies nationwide, 185 originated from Illinois.
Business conditions
More than 45 percent of Illinois manufacturers and distributors reported business conditions as "thriving and growing," compared to the national rate of 48 percent. Year-to-year comparisons indicated business conditions remained essentially unchanged from 2006 to 2007. However, respondents in four industry segments — transportation, building materials, plastics and industrial equipment — reported their outlook on business worsened over the last year, weighing down the overall national average.
Global opportunities
Survey responses indicate companies are missing opportunities due to lack of global growth strategies. Forty-nine percent of Illinois companies said working on a global level is part of their strategy. Companies that work globally report similar experiences with lower costs, lower prices and improved margins.
"If they haven't already, small to middle-market companies should consider strategies to take advantage of the benefits of working globally," said Karen Kurek, Managing Director and Manufacturing and Wholesale Distribution Practice Leader for RSM McGladrey's Great Lakes practice.
Survey respondents indicated a wide range of barriers to pursuing international growth, from obtaining financing to lack of expertise to cultural differences, suggesting it may not be an easy task to accomplish. "The benefits that can be obtained from participating in the global economy far outweigh the risk," Kurek said.
Where the jobs are
According to the survey, small to middle-market companies have a strong need for workers with a variety of skill sets and experience levels. Workforce shortages will continue to strain resources as 58 percent of survey respondents from Illinois plan to expand their workforce within the next 18 months. While some might believe unskilled labor is easier to come by than skilled labor, the demand for entry-level personnel is often just as strong as the need for trained personnel.
Lack of risk management may leave companies vulnerable
Many Illinois companies clearly are not instituting risk management measures. Few companies have implemented any of the three following critical risk management components:
- independent audit committees to oversee risk management activities;
- corporate risk assessment process to manage and prioritize high-risk areas; or
- internal audit function to manage the organization's risk.
"A surprisingly high percentage of companies don't have any risk management components in place," Kurek said. "These companies can mitigate a range of risks through implementing internal controls, oversight programs and backups to technology systems."
Tax-planning strategies and government programs underutilized
"Tax incentives and government programs are in place to help small to middle-market companies maintain and grow," said Kurek.
Similar to last year's findings, companies continue to miss cost-savings opportunities by failing to apply for qualified tax credits. According to the survey, Illinois companies employed research and development (R&D) credits at a rate of 55 percent, slightly above the national average of 51 percent.
Overall, more than half of respondents use no government programs. Utilization of government programs is fairly consistent across all sizes of companies, with smaller companies only slightly more likely to use them. According to the survey, the most commonly used program is the Small Business Administration's PRO-Net and various state funding programs. Some of the top reasons that companies do not use government programs are due to unfamiliarity with such programs and lack of interest in government involvement.
Copies of the complete 2007 RSM McGladrey Manufacturing and Wholesale Distribution National Survey are available through Christy Oldani at
christy.oldani@rsmi.com.
RSM McGladrey Inc. is a leading professional services firm providing accounting, tax and business consulting. Visit RSM McGladrey, Inc. at
http://www.rsmi.com.
Survey finds that manufacturers credit corporate responsibility with enhancing profitability and business strategy
More than three quarters of manufacturers believe that corporate responsibility initiatives can enhance profitability and that corporate responsibility will have a major impact on business strategies over the next few years, according to a survey by Grant Thornton, LLP. The data is derived from 159 manufacturing industry respondents in a survey of more than 500 business executives.
"Today, corporate responsibility programs are a large part of what customers demand," said Jim Maurer, Grant Thornton's national managing partner for their Consumer & Industrial Products Practice.
"Corporate responsibility programs have moved out of the realm of public relations to become real tools for improving the bottom line. Companies are realizing that strong investment in corporate responsibility programs is both a civic obligation and successful business strategy," he added.
The survey found that more than 63 percent of executives believe that human resources should lead corporate responsibility initiatives, followed by public/government affairs (47%), marketing (30%), investor relations and legal (27%), and compliance (22%). Respondents could select more than one department.
More than 46 percent of manufacturers believe that legislation and governmental policies ultimately drive corporate responsibility. While manufacturers support corporate responsibility, 41 percent are not willing to sacrifice profits to implement corporate responsibility practices.
Grant Thornton LLP is the U.S. member firm of Grant Thornton International, one of six global accounting, tax and business advisory organizations. Visit Grant Thornton LLP at
www.GrantThornton.com.
LNG the new source of swing natural gas supply to the United States
Demand for natural gas in the United States is approximately 22 trillion cubic feet (Tcf) per year, while domestic production is approximately 18 Tcf annually. This shortfall has historically been made up by imports from Canada, which currently represent 16 percent of overall U.S. supply. However, the steady growth experienced in Canadian imports during the 1990s leveled off at the turn of the century and the role of liquefied natural gas (LNG) has become more prominent in the North American market.
Canadian imports to the United States peaked in 2002 at almost 3.8 Tcf, but have trended lower in recent years. The extraction of oil sands in Canada is the primary demand driver for natural gas north of the border, further limiting the availability of natural gas to U.S. markets. Oil sands are a mixture of sand and heavy hydrocarbons which can be processed and refined to produce synthetic oil. The process for obtaining oil sands is very resource-intensive, requiring large quantities of natural gas and water. While Canadian oil sands are an important component of U.S. oil imports, the on-site processing is driving Canadian natural gas demand, increasing the risk of lower Canadian natural gas exports to the U.S. over the next several years.
LNG is natural gas that is stored and transported in liquid form. Natural gas is turned into a liquid using a refrigeration process in a liquefaction plant. Liquefying the gas reduces its volume to 1/614 of its room temperature volume, making it easier and less expensive to move across long distances. LNG is transported in specially built tanks in double-hulled ships to a receiving terminal where it is stored in heavily insulated tanks. The LNG is then sent to regasifiers which turn the liquid back into a gas that enters the pipeline system for distribution to customers as part of their natural gas supply. World natural gas reserves are abundant and LNG offers increased access to resources that have historically been considered "stranded."
LNG entered the U.S. supply picture in a significant way in 2003 when imports more than doubled from the previous year. After failing to meet expectations for growth in 2005 and 2006, LNG imports to U.S. terminals are on pace for a better than 40 percent improvement in 2007. This growth has contributed to record natural gas storage inventories this year. Furthermore, increased global liquefaction and domestic regasification point to continued growth of the LNG market in coming years. LNG is expected to increase from 3.5 percent of U.S. supply to nearly 10 percent by 2011.
With uncertainty surrounding the availability of natural gas supply from Canada in the future, LNG is becoming the new source of swing supply to the U.S. market. For additional information on LNG and the potential effect that it will have on natural gas prices, please contact Jeff Abeln at 312-704-8527, or via email at jeff.abeln@constellation.com.
Constellation NewEnergy, the IMA Energy Partner, is North America's #1 competitive wholesale & retail supplier. Visit http://www.newenergy.com
for additional information.
Justice Department seeks to invalidate Illinois law flouting federal immigration efforts
The Department of Justice has filed a lawsuit in federal district court seeking to invalidate an Illinois state law that attempts to prevent employers from using DHS's E-Verify system, which allows them to check in real-time whether new hires are authorized to work in the United States. The lawsuit seeks a declaration that a law passed earlier this year by the Illinois legislature and signed by the Governor that prohibits employers from enrolling in the Department's E-Verify system is invalid.
"E-verify or the Basic Pilot Program, authorized by Congress, is the on-line system that allows employers to verify whether new hires are allowed to work in the United States," said Carl Nichols, Deputy Assistant Attorney General for the Justice Department's Civil Division. "Today's lawsuit seeks to invalidate an Illinois state law that frustrates our ability to assist employers in making sure their workforce is legal, and in doing so conflicts with federal law."
Study says most manufacturers worry about managing and reducing waste
A majority of manufacturers in the U.S., Italy, Brazil and Germany believe reducing waste is the most significant environmental issue they face, according to a new study.
Yet in Korea and India, developing environmentally friendly products trumps waste reduction, use of renewable energy and greenhouse gas emissions in terms of importance, the study found. It was conducted by Harris Interactive on behalf of Dow Corning Corp.
"What's clear from these results is that while there are differences in emphasis around the world, the priority for companies both big and small, is to reduce their own environmental footprint through reducing waste," Peter Cartwright, Dow Corning's executive director for environment, health and safety, said in a statement. "While the focus today may be on dealing with waste, in the future I anticipate we'll see more emphasis on areas such as CO2 emissions and use of renewable energy sources as the whole issue of climate change gets more attention."
Sixty percent of Chinese respondents chose increasing energy efficiency as their top sustainability priority. Using renewable energy is considered less important among all respondents.
The study found that customers and the government hold the largest influence over a company's environmental decisions overall.
There are, however, regional differences. For instance, more than 70 percent of Asian respondents said the government, customers and suppliers are the top influencers, respectively.
By contrast, Europeans said customers were the biggest influence on a company's sustainability and environmental decisions, followed by local communities and the general public.
Environmental issues are a strong influence when companies choose suppliers, particularly in India where it is considered a critical factor.
U.S. economic growth losing steam
The Conference Board has announced that the U.S. leading index decreased 0.6 percent, the coincident index increased 0.1 percent and the lagging index increased 0.3 percent in August.
The leading index fell sharply in August, and real money supply (M2) was the only large positive contributor in this month. However, the level of the leading index in June and July was revised up slightly as actual data for manufacturers' new orders became available. The leading index increased 0.5 percent from February to August (a 1.0 percent annual rate), and the six-month diffusion index suggests that the strengths among the components became slightly more widespread in July and August.
The coincident index increased again in August and it continues to rise on a somewhat slower, but steady, trend. It grew 0.9 percent from February to August (a 1.8 percent annual rate), down from the 2.5 percent average annual rate in 2006. Industrial production and employment have been making the largest positive contributions to the coincident index in recent months, but employment fell slightly in August. Despite slower growth, the strengths among the coincident indicators continued to be very widespread in recent months.
The leading index has been alternating between monthly increases and decreases in 2007, and, as a result, it is essentially at the same level as in January 2007. In August, the largest negative contributions to the leading index were due to consumer expectations, initial claims for unemployment insurance (inverted), and stock prices. Housing permits and interest rate spread continued to make negative contributions through August. At the same time, real GDP grew at a 2.3 percent average annual rate in the first half of the year (including a 0.6 percent rate in the first quarter and a 4.0 percent rate in the second quarter). The current behavior of the leading index suggests that economic growth is likely to continue in the near term, albeit at a slow pace.
One of the ten indicators that make up the leading index increased in August. The positive contributor was real money supply. The negative contributors — beginning with the largest negative contributor — were index of consumer expectations, average weekly initial claims for unemployment insurance (inverted), stock prices, building permits, vendor performance, manufacturers' new orders for non-defense capital goods, interest rate spread, and manufacturers' new orders for consumer goods and materials. The average weekly manufacturing hours held steady in August.
The leading index now stands at 137.8 (1996=100). Based on revised data, this index increased 0.7 percent in July and decreased 0.1 percent in June. During the six-month span through August, the leading index increased 0.5 percent, with six out of ten components advancing (diffusion index, six-month span equals 60 percent).
Source: The Conference Board
The IMA's new strategic partnership with Heritage-Crystal Clean (HCC) caters to your company's environmental needs. Big savings are available to IMA members. To learn more, contact HCC's Jim Skelton at
jim.skelton@crystal-clean.com, call 847-783-5110 or visit:
www.crystal-clean.com.
IMA's Recycling Expansion & Modernization (REM) grant ...
The Illinois Department of Commerce and Economic Opportunities wants to help Illinois companies deal with the issue of reducing waste through the Recycling Expansion and Modernization (REM) Grant Program. Through this grant, the Illinois Manufacturers' Association can offer your company a solid-waste assessment at 25 percent of the actual cost; the grant pays the remaining 75 percent. Join the growing number of companies that are on the path to becoming green. Find out how easy it is to participate in the IMA's REM grant program. It's an investment in your future — one that will reap perpetual rewards for your business and your community.
For more information, contact Judy Parker, IMA Director of Training, 217-522-1240, ext. 3036, or email
jparker@ima-net.org.
DATES OF NOTE:
More information/events may be found at http://www.ima-net.org/calendar.cfm and
http://www.ima-net.org/MIT/open.cfm
October 3, 2007
Mistake Proofing
DePaul University,
150 W. Warrenville Road, Naperville
Designed to expedite effective application of mistake proofing methodology, this workshop focuses on effective methods of applying mistake proofing as a practical method of improving and maintaining process.
October 19, 2007
Negotiating with Confidence for Long-Term Success–DePaul University’s O’Hare Campus, 3166 River Rd., Des Plaines
Negotiations are a crucial component of all jobs. Don’t burn bridges. Learn successful, professional negotiating skills that will enhance your chances for success. For more ifnormation or to register, visit
www.ima-net.org/MIT/nwc.cfm
October 23, 2007
Workplace Investigations: Doing it Right – Northern Illinois University – Rockford, 8:30-11:00 am
There are three primary goals associated with any workplace investigation: determine the truth, comply with all legal requirements and provide the company with defenses to other potential legal causes of action. This program will focus on proven tactics available to employers as well as specific, practical advice for managers and supervisors to act promptly and appropriately with respect to a variety of issues in your workplace including on the job accidents and workers’ compensation fraud. COST: $125 for IMA members; $100 for each additional attendee from the same company and $200 for non-members. For more ifnormation or to register, visit
https://www.ima-net.org/wpi_seminar.cfm
October 26, 2007
Essential Leadership Skills for Newly Promoted and Frontline Supervisors
DePaul University’s O’Hare Campus, 3166 River Rd., Des Plaines
This fast-paced, invigorating one-day workshop will provide you with the skills to build better working relationships, develop the perspective of a leader, and establish realistic performance goals for employees. For more ifnormation or to register, visit
https://www.ima-net.org/MIT/snps.cfm
November 1, 2007
Lean Manufacturing: Quick Start
952 E. Eldorado, Suite 102, Decatur
November 2, 2007
Lean Manufacturing: Quick Start
DePaul University, 150 W. Warrenville Rd., Naperville
Designed to help participants quickly initiate team oriented on-going lean activities, this workshop includes instruction on Lean terms and definitions, waste identification and analysis, team organization and choosing lean tools for waste free processes.
November 7, 2007
Annual Sales Tax Seminar
NIU –Naperville
Joe Bigane, a tax expert will update on current sales and use tax laws specific to manufacturing. For more ifnormation or to register, visit
https://www.ima-net.org/tax_seminar.cfm
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