Resolve — to win

Kerry Knudsen

Kerry Knudsen

Wow – 2012 – to paraphrase Julius Caesar, it came, it saw, it conquered. What a year.

Mom died in July. These things happen. There is no way around it. It matters. She was one of six children born to a farmer in the Depression. Her father, a cabinetmaker and farmer, died when she was five of an infected saw cut.

Stories of poverty and the Depression were part of the fabric of my childhood, but each survivor of that family went on to become something else – something other than a child, and something other than desperate. Some became affluent. All remembered potato-peel soup; none had to eat it in the last 65 years.

A recent study by the Fraser Institute and reported in the National Post shows this type of story is far from unique, far from new and far from over. In fact, the study shows that over the span of a decade, 83 percent of Canada’s lowest income-earners moved up the income ladder. The report, based on Statistics Canada income data for more than one million Canadians, today aged 39 through 64, whose tax returns were linked with Social Insurance Numbers to track their earnings over the course of five, 10 and 19 years, found in the 19-year period between 1990 and 2009, one in five Canadians in the lowest of five income groups eventually moved up to the highest-income camp, and nine out of 10 people in the lowest-income group rose out of the bottom. The poor are getting richer.

Further, the study found more than a third of top earners in 1990 slipped to a lower income category by 2009. The people that sell RESPs tell me this is a goal, not a hurdle. When you retire, you reduce income on purpose. However, another way to say it is the rich are getting poorer. So much for Occupy*.*.

I am not trying to be funny. We hear on a nearly daily basis the rich get richer and the poor get poorer, but, with the exception of a small percentage of the very poor that may, in fact, be incapable of either earning or managing money, the poor get sick of it and climb out, while the richest of the rich one day have their assets dispersed. You can’t take it with you.

It is the area between those two extremes that fascinates me. I live to hear the stories about the cabinet-maker in St. Jacobs, Ont., who escaped with his family from the former Soviet Union or the furniture maker that was challenged by his boss to, if he thought he was so smart, show how he could do better. Now a boss, he takes the suggestions of his employees seriously. And I love to hear the story of a Newfie shop owner that placed his son in charge, bought a home in Florida and sports a tan year-‘round that would be the envy of the Hollywood set. I like winners.

Winners can be people, but they can also be companies, teams, regions, industries and countries. Canada, right now, is a winner, and nobody disagrees. We ran our finances differently than did others, and we dodged a bullet. Sure, there may be another bullet. There always is, in the movies – the one with your name on it. But for those of us that watched the documentaries surrounding Remembrance Day, not everybody gets hit. Survivors write the histories.

Our housing-and-related sectors have been doing very well, both compared to the U.S., and compared to the world at large. Granted, we lost some of the big, rich companies in the pinch that followed the 2008 downturn. However, their assets have been dispersed. The used machinery market has been hot, and we have newer, if not bigger or wealthier, companies and people ready to take advantage of an opportunity.

Because many of the new entries into the market are not from the same demographic, sometimes seen as the “official” or “professional” wood industry, we are seeing fractures developing along what once were the shoo-in groups. Some companies now are co-ops financed from South Asia, most associations seem unable or unwilling to expand into areas that don’t follow the playbook and the current educational and regulatory cohorts seem to demand that newcomers mount hurdles and comply.

The fact is, living above your production floor, buying outdated machines and defeating safety rules may be against standards, but people do what they must to survive. They will comply when they can afford it.

Some things, of course never change. My grandfather, who died nearly 20 years before I was born, has his prized plane sitting on display on my bookshelf. The form of planes has changed, as has their speed and accuracy. And price. The function has not. You must have what you must have, and planes survive.

We follow the building permits closely because we know every house must have cabinets and a bed, and every office must have a desk and a file. Similarly, we know every desk- or bed-builder must have tooling and abrasives, and the industry that supports the manufacturers must see the manufacturers succeed. No manufacturers; no support. October permits are up 15 percent over September, and up 19 percent over October of 2011.

To my mind, the stresses put on the manufacturers over the past four years have totally confused the markets, and we are actually in danger of seeing more of our production being moved off-shore as we become less willing to accommodate adjustment. It is time to change.

What is wrong with the Canadian secondary wood-processing market? Nothing, really. Permits are up. Starts are up. Demand is up. The only thing that’s down, and only in some quarters, is confidence. Lack of confidence is what defines many of those people described above that can neither earn nor manage money.

Money has changed, and markets have changed. Where we once sold unlimited orders of cabinetry and other goods to the U.S., some of our manufacturers are actually flying down to Phoenix and Florida and buying distressed real estate at the same time immigrant wood industry professionals are buying distressed saws and moulders. Both groups are pulling themselves up and grabbing opportunities.

The year 2012 told us change is in the air, the past is past and the future is today. Some of the things we did will work because they always work. Get up, clean up, suit up, show up. Life is putting on an appearance. If we want to expand in the future, we need to see where the market is and talk to it. No sense talking to Phoenix; they aren’t buying. North Dakota, however, is. Calgary is. Brampton is. Laval is. If you’re awake, Brazil is.

People with money want to make money. To make money, they need stuff, and stuff costs money. This is one of those things that never changes. Another thing that never changes is that nature abhors a void, and if you don’t satisfy your customers, somebody else is coming down the road.

Speaking of coming down the road, over the next several months we will be inviting wood industry manufacturers and managers to meet with me and the editorial staff (aka Dennis) on your home turf in a series of editorial roundtable discussions. We will be looking for no-nonsense ideas and concerns to guide the industry discussion over the next year or two. We will be making the invitations by e-mail, so be sure we have the right contact information on file. If you got this e-letter, it’s right. If you didn’t, it’s not. The rules will be simple: manufacturers only, and each pays his own load. The discussions will be confidential.

The future? 2013 will be a year of resolutions of past issues and rewards for those that can tell the difference between a deal and a scam. Old artifacts of woodworking in Canada will either prove their value or they will fade away at a rate not seen before. The new industry will be smaller than it was, but it does not need to be smaller than it is. It will depend on our ability to consolidate resources and hold a position. The Caesar philosophy. Where our old concerns once were off-shore production, our new concerns will be in forming alliances with people, institutions and communities that want to work instead of talk. Note: this is a prediction, not a plea.

If you read the results of our 2012 Readers’ Survey in the November issue closely, you laid a heavy burden on our shoulders. We deeply appreciate your confidence, but now we stand to lose it if we can’t produce. I guess that puts you and me pretty much in the same boat.

Thanks for everything. Seriously. Here comes 2013, and it looks to me like a lucky year. Those of us that are working should get richer. Some things never change.

Thanks, Mom. You were the best.

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