August 2006USG Corporation Emerges from Chapter 11
USG Corporation, Chicago, announced that its Plan of Reorganization became effective June 20, 2006, formally concluding its Chapter 11 proceedings. This enables the building materials company to complete the bankruptcy case and emerge from Chapter 11. The company is in the process of repaying its creditors and funding an asbestos trust that will be responsible for compensating asbestos personal injury claimants.
"It is a great day for USG,” said William C. Foote, USG Corporation chairman and chief executive officer. "The Courts’ action enables us to bring to a close one of the most challenging and extraordinary events in the company’s 104-year history.”
"The successful resolution of our Chapter 11 case is historic in the context of asbestos bankruptcy cases,” said Foote. "Asbestos claimants will be compensated, our banks, bondholders and suppliers will be repaid in full—100 cents on the dollar, with interest—and shareholders who stood by us through this process will be rewarded by retaining ownership in the company.”
The plan of reorganization, which was approved by more than 99 percent of the asbestos personal injury claimants voting, requires USG to establish and fund a personal injury trust to pay asbestos personal injury claims. A $900 million payment to the new trust was made on June 20. Two subsequent payments totaling $3.05 billion would be made within the next 12 months if Congress fails to enact legislation establishing a national asbestos personal injury trust fund, such as the FAIR Act, which is currently being considered in the United States Senate (S. 3274). The terms of the agreement are contained in the plan of reorganization that was confirmed by the Delaware court.
Financing for the plan is expected to be provided from USG’s cash on hand, a $1.8 billion rights offering to stockholders backstopped by Berkshire Hathaway Inc., tax refunds and new long-term debt.
BASF Acquires Degussa’s Construction Chemicals Business
On July 1, 2006, BASF completed its acquisition of the Degussa AG global Construction Chemicals business. This strategic initiative positions the company to tap into the growth potential of the construction chemicals market on a sustainable basis. With headquarters in Germany, the global BASF Construction Chemicals division consists of Admixture Systems and Construction Systems businesses, and is the largest manufacturer of construction chemicals worldwide.
In North America, the BASF Admixtures business unit will continue to market the respected Master Builders brand of products and solutions to the ready mix, precast, manufactured concrete products, paving and underground construction markets.
The BASF Construction Systems business unit in North America is comprised of four individual business lines that include Building Systems, Wall Systems, Watson Bowman and Latin America.
BASF Corporation, headquartered in New Jersey, is the North American affiliate of BASF AG, Ludwigshafen, Germany. BASF employs about 10,000 people in North America and had sales of approximately $11.3 billion in 2005.
Scorpion Fasteners Acquired by John Wagner Associates
John Wagner Associates, Inc. has acquired Scorpion Fasteners. Scorpion Fasteners will be operated as a separate division of JWA.
To help facilitate the transition, Dan Onofrio, president and owner of Scorpion Fasteners, Inc., will remain in an advisory capacity at Scorpion Fasteners.
Scorpion Fasteners was founded in 1975, originally specializing in fasteners for metal buildings and steel roof deck construction. Today, Scorpion Fasteners produces full lines of fasteners for drywall, acoustical, decking, light steel and wood related applications. Scorpion Fasteners maintains its headquarters in East Windsor, Conn.
JWA was incorporated in 1967 and founded by John "Brad” Wagner. The company is headquartered in Alpine, Utah. JWA is a closely held, family and ESOP owned company that originated in Walnut Creek, Calif. JWA’s current business operations include Grabber Construction Products, Impact Photographics, Grabber Performance Group (disposable warmers), John Wagner Associates GmbH, Germany, and John Wagner Associates (Grabber) Inc., Canada.
ACH Foam Technologies Acquires Allied Foam Products
ACH Foam Technologies, a manufacturer of expanded polystyrene products that is headquartered in Denver, has acquired Allied Foam Products of Gainesville, Ga.
This transaction occurs just one year after three multi-plant companies in the EPS industry—Advance Foam Plastics in the Western United States, Contour Products and Heartland EPS in the Midwest and Central United States, merged to create ACH Foam Technologies.
Jim Clark, founder of Allied Foam Products, will continue with ACH as an integral component of the Gainesville operation.
ACH Foam Technologies now has manufacturing facilities in Denver (headquarters), Southern California (Tijuana, Mexico), Sparks, Nev.; Murray, Utah; Newton, Kan.; Kansas City, Kan.; Washington, Iowa; Fond du Lac, Wis.; Waukegan, Ill.; and Gainesville, Ga.
Associations Partner to Further Improve Business Climate for Women, Minorities
Associated Builders and Contractors, the National Association of Minority Contractors, and Women Construction Owners and Executives, USA have announced two strategic alliances designed to promote free enterprise, open competition and opportunities for all construction firms.
The three associations officially entered into the two separate agreements June 5 at ABC’s Legislative Conference in Washington, D.C., when ABC representatives signed an agreement with NAMC, and then signed a similar agreement with WCOE. The associations expect that these national-level agreements will trigger similar partnerships among the associations’ local members nationwide.
The agreements will allow construction’s leading diversity stakeholders to develop national initiatives that will encourage similar local level programs designed to improve the business climate for all contractors, and to empower minority- and women-owned firms by providing them with access to services, training, networking and other programs.
Need to Identify an Older Steel Joist? SJI Can Help
Engineers, architects, specifying professionals, contractors and others trying to identify older steel joists found in the field can now get help online from the Steel Joist Institute.
Visit www.steeljoist.org and look for the "Joist Investigation Form” found in the "What’s New” section.
The design professional submits the information he or she knows, and the SJI office will then search their extensive historical files to try to find the proper match and information about that joist. Success of the search may vary depending on the amount of information given to SJI.
Builder Confidence Declines in June
Rising mortgage rates, deepening affordability issues and the retreat of investors/speculators from the marketplace have prompted single-family home builders to further adjust their perspectives on the new-home market, according to the National Association of Home Builders/Wells Fargo Housing Market Index for June, released June 19. The HMI declined four points from an upwardly revised reading in the previous month to hit 42 for the latest report, its lowest mark since April 1995.
"Based on historical experience, particularly the 1994–1995 episode, the pronounced pattern of movement in the HMI is not inconsistent with the reasonably orderly cooling-down process we’re projecting for home sales and single-family housing starts in 2006,” said NAHB Chief Economist David Seiders. "We now expect new-home sales to be off by 13 percent from the record posted in 2005. Single-family starts, supported by large builder backlogs of unfilled orders and some continuing reconstruction in the wake of last year’s hurricanes, should be down by about 9 percent from the 2005 record.”
"These forecasts naturally are subject to a considerable degree of risk,” added Seiders. "The downside risks include the potential for large numbers of sales cancellations and re-sales by the investor/speculator group as well as more aggressive tightening of monetary policy than we’re assuming in our baseline forecast.”
"Looking at today’s numbers, it’s important to keep one thing in perspective,” added NAHB President David Pressly, a home builder from Statesville, N.C. "The HMI is a measure of builder sentiment, and attitudes may vary by a greater degree than actual market activity.”
Derived from a monthly survey that NAHB has been conducting for close to 20 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good,” "fair” or "poor.” The survey also asks builders to rate traffic of prospective buyers as either "high to very high,” "average” or "low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.
All three component indexes declined in June, falling to their lowest levels since early 1995. The index gauging current sales was down three points to 47, while the index gauging sales expectations for the next six months fell five points to 50 and the index gauging traffic of prospective buyers declined four points, to 29.
The decline in builder confidence was broad-based and registered in every region during June. The HMI fell seven points to 40 in the Northeast, four points to 25 in the Midwest, two points to 49 in the South and one point to 61 in the West. These regional indexes are all down by similar amounts from their 1995 highs, and the relatively low levels for the Midwest and Northeast reflect relatively weak economic conditions in those parts of the country.
May Construction Climbs 3 Percent
At a seasonally adjusted annual rate of $691.9 billion, new construction starts in May advanced 3 percent from April, reports McGraw-Hill Construction, a division of The McGraw-Hill Companies. Nonresidential building maintained the upward trend witnessed so far in 2006, and it was accompanied by growth for nonbuilding construction (public works and electric utilities). At the same time, residential building continued to gradually settle back from its record pace of the past year. During the first five months of 2006, total construction on an unadjusted basis was $276.9 billion, a 9 percent gain compared to the same period a year ago.
May’s data produced a reading of 146 for the Dodge Index (2000=100), up from a revised 142 for April. So far in 2006, the Dodge Index has averaged 144—above the 139 for full year 2005, although slightly behind the 146 mean registered during last year’s second half. "On balance, construction activity has held up quite well this year, making the transition from a housing-led expansion to one where growth is coming from other sectors,” stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. "The plus for nonresidential building has been healthier market fundamentals such as higher occupancies and rents. The rising costs of materials have led to the deferral and redesign of some projects, but at this point in 2006 not enough to derail what is still a strengthening trend for nonresidential building.”
Nonresidential building in May jumped 11 percent to $207.0 billion (annual rate), helped by a healthy performance from the commercial structure types. Hotel construction soared 44 percent, boosted by the start of two large hotel projects in Atlantic City, N.J., valued respectively at $350 million and $200 million, plus the start of a $190 million convention center hotel in Baltimore. Store construction continued at a brisk pace, rising 9 percent in May, as this structure type was aided by groundbreaking for a $90 million shopping mall in Jacksonville, Fla. Office construction in May was also up 9 percent, rebounding from a lackluster April. Large office projects that started in May were located in Jersey City, N.J. ($76 million), Palo Alto, Calif. ($55 million), and Kansas City, Mo. ($40 million).
Warehouse construction in May ran counter to the upward path for commercial building, slipping 10 percent. Also losing momentum in May was the manufacturing building category, down 24 percent after its 60 percent hike in April. While the overall category was down, the manufacturing structure type did include the May start of three large ethanol plants, with two located in Iowa ($75 million and $72 million), and the third located in Arizona ($60 million).
The institutional side of the nonresidential market featured a 15 percent gain for school construction, as this category regained upward momentum after the modest retreat of the previous two months. Healthcare facilities continued to rebound after the slow contracting at the outset of 2006, rising 13 percent in May. Five hospital projects valued each in excess of $100 million reached groundbreaking in May, with two located in California ($238 million and $113 million), two in Florida ($125 million and $115 million), and one in Michigan ($205 million). The amusement category in May surged 80 percent, led by groundbreaking for these two very large projects—the $650 million stadium for the Dallas Cowboys in Arlington, Texas, and the $280 million expansion to the Phoenix convention center. Also helping out in May was a 3 percent gain for transportation terminals. Posting declines in May were churches, down 27 percent; and public buildings, down 40 percent.
Residential building in May slipped 2 percent to $364.4 billion (annual rate). Single-family housing dropped 5 percent in dollar volume, the fifth monthly decline in a row, with May’s level coming in 9 percent below the average pace during 2005.
Regionally, the single-family decline for May was most pronounced in the South Atlantic (down 9 percent), followed by the West (down 4 percent), the Northeast (down 3 percent), and the Midwest and South Central (each down 2 percent).
The cost of financing continued to move upward in May, as the 30-year fixed mortgage rate averaged 6.6 percent, compared to April’s 6.5 percent, contributing to the dampening of homebuyer demand. While single-family housing is now retreating, multifamily housing in May continued to move at a healthy clip, rising 9 percent. May’s level for multifamily housing was 18 percent above the average monthly amount for this structure type in 2005, in contrast to the decline reported for single-family housing. May included the start of six multifamily projects valued each in excess of $100 million, with three located in Bellevue, Wash., ($209 million, $160 million and $157 million), and the other three located in Philadelphia ($165 million), Kihei, Hawaii ($151 million), and Las Vegas ($115 million).
Murray indicated, "While there’s emerging concern about overbuilding in such markets as Miami and Las Vegas, multifamily housing is seeing additional strength in construction this year, as the condo boom for the United States as a whole continues.”
The 9 percent increase for total construction starts during the first five months of 2006, relative to 2005, was the result of this pattern by major sector: nonresidential building, up 20 percent; nonbuilding construction, up 8 percent; and residential building, up 5 percent.
By geography, total construction in 2006’s January–May period reflected the following behavior: the West, up 17 percent; the South Central, up 12 percent; the Midwest, up 7 percent; the Northeast, up 5 percent; and the South Atlantic, up 4 percent.
People & Companies in the News
Ames Taping Tool Systems, Inc., Atlanta, announces the selection of its tool certification program to Marshall Community & Technical College’s off-campus associate degree program. Administered as part of an academic partnership program between the IUPAT’s Finishing Trades Institute and the College, individuals who complete tool certification training can now receive credits toward their associate’s degree.
The Ames tool certification program was created to meet the professional development needs of the drywall industry. Increasingly, builders and general contractors are requiring finishers to maintain professional certifications as part of their job qualification requirements. The tool certification program helps the novice tool user as well as the professional finisher enhance their credentials by certifying that they have been trained in the proper operation of Ames Automatic Taping and Finishing Tools.
For more information regarding Marshall Community & Technical College’s off-campusassociate degree program, visit www.marshall.edu/ctc, or contact Steve Brown, associate dean and director off-campus via email at firstname.lastname@example.org.
The new TechZone Ceiling System from Armstrong has been named the Grand Prize winner in the Workplace Aesthetics Solutions category of the Buildings Product Innovation Awards competition. Sponsored by Buildings magazine, the 11th annual competition honors innovative products based on how well they solve today’s facilities challenges in commercial, institutional and industrial markets.
Sandra Wilson has been named president and chief executive officer with responsibilities for Chicago Metallic Corporation’s worldwide operations. Wilson was most recently president of CMC’s North American business.
Peter Balint, president and CEO of Dryvit Systems, Inc., West Warwick, R.I., has been named Member of the Year by the EIFS Industry Members Association.
Balint has been a strong advocate of EIFS since joining Dryvit as president in 1998. He has also played an active leadership role in the EIFS community, and is currently in his third term as president of EIMA.
Fabcon, Savage, Minn., has named Bill Shugars general manager for its Pennsylvania manufacturing facility. Shugars will supervise and manage plant-wide operations, including maintaining safety standards and enhancing ongoing automation projects at the Fabcon facility. Shugars has worked in the construction industry for the past 25 years.
Saint-Gobain Corporation’s board of directors has elected the following individuals as officers of the corporation, which is headquartered in Valley Forge, Pa.:
John Mesher, who had been vice president, general counsel and secretary, was elevated to senior vice president of the company.
Shawn Puccio, who had been vice president, finance, was elevated to senior vice president of the company.
Karen Cawkwell was elected vice president, communications. She succeeds Dorothy Wackerman, who is retiring from the company.
Catherine Ferrante was elected vice president, delegation human resources and administrative services.
Robert Pierce was elected vice president, corporate compensation and benefits.
ToolPro, Kennesaw, Ga., is expanding its warehouse outside of Atlanta. The new 35,000 square foot facility will provide much-needed space for the company.
David Mudrick has been named the new president and chief executive officer of Topcon America Corporation, based in Paramus, N.J. He assumed this new position as head of the management holding company for Topcon Positioning Systems and Topcon Medical Systems on June 29.
In his new position, Mudrick is responsible for the financial, human resources, and legal areas of Topcon Positioning Systems and Topcon Medical Systems. The companies employ more than 650.
Mudrick replaces Susumu "Scott” Hokari, who has rejoined the executive staff of Topcon Corporation in Japan.
With this appointment, Mudrick becomes the first person of non-Japanese descent to hold this executive position in the company’s 37-year history in the United States.
Mudrick has been with Topcon since 1993 and has served as the company’s executive vice president and chief financial officer for the past seven years.
Neil Other has been named sales manager of Australia by Topcon Positioning Systems, headquartered in Livermore, Calif. In this new position, Other will be responsible for all sales and marketing operations for Topcon’s construction, positioning, survey and GIS products. He will also act as a liaison between TPS’ Australian and New Zealand dealers and the company’s factories in the United States and Japan.
Other, a 16-year veteran of the construction and positioning industry, will be permanently based in Australia.
Ben Lester has returned to Warner Manufacturing as the sales manager for the company’s recently formed New Business Development Group. Lester has extensive experience in the building industry trades that will prove beneficial in developing new products at Warner Manufacturing.