What Was 2010's Biggest Story?

John G. Swanson
December 8, 2010
THE TALK... | Markets & Trends

It's that time of year. Time to look back at some of the biggest news stories for the industry in 2010. The economy remained weak, and we had continued plant closings with Jeld-Wen, MI, Pella and other companies shutting down facilities. Other companies, including Atrium, International Aluminum and Stock Building Supply restructured, going through the bankruptcy process, but managing to stay open for business.

Government activity seemed to play a much bigger role in our business this year than in the past. Tax credits for energy efficient products passed in 2009 continued to boost replacement window and door sales in 2010.  Many companies are still seeing a flurry of activity as homeowners try to take advantage of the $1,500 credit before it expires at year end. Of course, we also had the implementation of the Environmental Protection Agency's new lead paint rules that have changed the way a lot of work is done. And, finally, the Department of Energy launched a program to promote sales of R-5 windows.

What do you think was the biggest industry story of 2010? That's our poll question of the week. And, please note, we are offering a "none of the above" option, but if you choose that, we want you to submit a write-in vote and we'll do our best to track those as well.  Of course, we want to hear from you.  What 2010 developments will have the biggest long term impact on the industry? Was it a product trend?  Was it the launch of  the iPad?  Emali me or post a comment.  

Survey Results as of 12/14/2010:

What Was 2010's Biggest Story?

EPA's new lead paint rules

  

 

55%

End/potential end of window tax credits

  

 

21%

Continued plant closings

  

 

16%

None of the above

  

 

4.5%

Launch of DOE's R-5 program

  

 

3%

Company restructurings

  

 

0.5%

This time around, I agree with the majority of respondents.  The number two item, the tax credits of 2009 and 2010, may be around still for another year, depending on what happens in the next week or so in Congress, but we know EPA's lead paint work rules will be with us for a long time.  At least as long as there are pre-1978 homes around.  The rules may even get more stringent with additional testing requirements still under consideration. Of course, there could also be some pull-back with the power shift in Congress.

It is hard to get a real handle on the impact of EPA's new rules as yet.  Cetainly, reputable window and door companies with installed sales are following the rules.  Have they settled in and determined how to handle the new rules effectively and effiiciently?  Are other companies continuing to do business as usual under the radar?  Are homeowers opting for such firms?  Are homeowners becoming more educated and demanding lead-free work practices? Is there enforcement?   Those are all issues that need to be examined. 

The number three choice of respondents this year was continued window and door plant closings–something I think we all hoped we'd seen the last of in 2009.  I didn't count, but it seemed 2010 saw fewer facilities shut down than 2009, but plant closings definitely persisted.  I doubt they will disapper completely in 2011, but let's hope we're nearly done on that front. 

An improving economy may cut down restructuring activity too.  I would hope so, but I don't think those kinds of stories ever disappear.  Even when times were good, companies failed, and they were restructured, bought up, or closed down. 

I wasn't sure how the R-5 program would rank, and I'm not quite sure where I would put it myself.  It certainly attracted a lot of attention within the industry this year. Certainly not all, but many manufacturers were anxious to hit the new benchmark as soon as DOE put it out there.  I don't hear manufacturers talking about a lot of actual sales through the DOE program, however.  

Perhaps the "volume purchase program" will still take shape, but to date R-5 seems to me to be more of a preview of the next Energy Star criteria (at least for certain climate zones) and/or the Energy Star "Super Star" concept.  In other words, R-5 could set the stage future labels for cutting edge energy efficiency. 

And 2010, certainly should not have changed anyone's perspective on energy efficiency.  It's clear that demands for higher levels of performance will continue to spiral upward.  The 2012 International Codes are more stringent on that front, the country talked about Home Star, Building Star and a new home performance rating system.  The only question that remains hard to assess is exactly how fast (or slowly) these changes will happen.

Write-ins votes were few and far between, but I did get one.  A Southeast dealer cast his vote for the lack of credit and financing–something I've heard from many in the industry throughout this year.  Businesses can't get loans to start new projects. Homeowners can't get loans to buy new windows and doors. "Until the private sector can find lending at banking institutions, nothing is going to change much," the dealer writes.  "Banking regulators have banks terrified to make a loan, end of story. If you can get a loan, you probably don’t need one. It's a pathetic situation. Folks scream , kick and holler about projects they want to build and we continue getting reports that almost no projects can move forward due to a lending chokehold. Are we off base to wonder if the powers that be has an agenda to bankrupt small business in America?"  

 

Comments

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Wish we could pick more than one option. I'd say that the end of the potential tax credits, and the EPA lead law would be the top story together.

Many people started to purchase windows at the beginning of the year in 2010, and I think this was due to the stimulus plan.  When the opt-out was ruled "out" in July, sales plummeted for most of us who played by the rules. I think the EPA should have spent more money on educating the public about the law, and or made the homeowner responsible for hiring home improvement contractors who were not lead safe certified.

December has brought a sharp increase in sales as people are rushing to take advantage of the stimulus.

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