www.amba.orgtheamericanmold builder

Volume 25 No. 1

IN THIS ISSUE:IN THIS ISSUE:

fall

2010

fall

2010

speak outa message from our president

Mike ArmbrustMike Armbrust

2010 Fall Conference Recap

AMBA News

2011 Convention Preview

Chapter Spotlight - Chicago Chapter

Tax & Business Tips

2010 Fall Conference Recap

Death and taxes. These are two givens I was raised to come to expect in life. Everything else is TBD. One given I’ve come to understand as an absolute truth in this industry is we are slowly losing our manufactur-ing edge to the rest of the world. Our government leaders have decided, on our behalf, that we can survive as a service based economy. It does not take a rocket scientist, moldmaker, custodian, or even food prepa-

ration specialist to recognize this falsehood.

Please don’t misunderstand my opening comments. I am a “glass half-full” optimist. Partly because it is the way I was raised, more so because our Association reflects the entrepreneurial spirit that built this country. The delegation of AMBA members who attended the 2010 Fall Conference in Washington D.C. came away encouraged by the attention manufacturing, in particular small-business manufacturing, is being given at the national level. While the message on Capitol Hill was “jobs, jobs, jobs” we represent the one sector that employs more people than any other sector in the economy (except of course for our government). For the first time in three trips to Washington D.C. we were recognized by our representatives. We had five delegations which included AMBA member representatives from MI, IL, WI, MN, FL, PA, SC, NC, OH, TX, NJ, VA, AZ, and MO. Over the course of two days we conducted 49 face-to-face meetings with congressional representatives and their staff to continue to voice the concerns and specific requests of the AMBA. Our message was clear, concise and to the point covering the major issues that affect our business’s ability to compete in the global economy. Those issues addressed include: Unfair Competition from Low-Cost Countries, Skilled Employee Shortage & the Aging Workforce, Lack of Business Credit and Access to Credit, Rising Healthcare Costs, and finally Rising Tax Burdens.

While in Washington, D.C. we witnessed Congress passing of the Currency Reform for Fair Trade Act of 2010, HR 2387 that enables the U.S. to impose countervailing duties against other countries that maintain persistently misaligned currencies. This was a primary agenda item for the meetings conducted with Congress at the 2009 AMBA Fall Conference. We also supported HR 2936, the Build Manufacturing Act, which provides credit to manufacturers with secured backing from the government (loan guarantee program with lower interest rate) as well as HR 6003, the Fab Lab Bill, which would provide funding to open 40 “Fab Labs” throughout the country to educate kids on product development and manufacturing. One of our delegations went into a meeting with a member of Congress only to find a copy of the AMBA publication “The American Mold Builder” lying on his desk. The message here is we are being recognized. We no longer need to explain who we are or why we are critical to the manufacturing process. Now that we have their attention, we need to keep it. Encourage your employees, their families, and your community to speak with elected officials about the critical need to keep, and invest in, manufacturing jobs in the United States.

Your National board of directors has been hard at work at the committee level, meeting weekly to enhance membership services, education, governance, convention planning, and the management of Association finances. Our 2011 AMBA Annual Convention “Accelerate Your Profitability” is going to be an excellent opportunity for you to step out of your day-to-day operations to work ON your business instead of in your business. We have an excellent lineup of speakers and group activities that will enable attendees to benchmark their best practices with industry leaders and focus on increasing profitability in their business. Don’t forget the Early-Bird discount for attendees who register and pay prior to January 7, 2011. You won’t want to miss this exciting and engaging event so act soon to ensure your spot!

For those of you who took time away from your companies to join us in DC we thank you. For those of you unable to join us in DC, we encourage you to get involved and join us March 2-6, 2011 because we all have a role to play. It is time to call to action those of us who believe in manufacturing and believe in America. The AMBA is committed to playing its role, are you?

AMBA News

2011 Convention Preview

Chapter Spotlight - Chicago Chapter

Tax & Business Tips

2 AMBAwww.amba.org

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The official publication of American Mold Builders Association

Leading the Future of U.S. Mold Manufacturing

3601 Algonquin Rd, Suite 304 • Rolling Meadows, IL 60008phone: 847.222.9402 •fax: 847.222.9437

email: info@amba.org • website: www.amba.org

Officers and Board of Directors

PresidentMike Armbrust, Mako Mold CorporationVice-PresidentTodd Finley, Commercial Tool & DieSecretaryShawn McGrew, Prodigy Mold & ToolTreasurerKent Hanson, H.S. Die & Engineering, Inc.Association Legal CouncelRichard N. Mueller & Associates

Board of DirectorsSteve Rotman, Ameritech Die & MoldShawn McGrew, Prodigy Mold & ToolKent Hanson, H.S. Die & Engineering, Inc.Justin McPhee, Mold CraftRobert Earnhardt, Superior ToolingTodd Finley, Commercial Tool & DieDan Glass, Strohwig IndustriesRoger Klouda. M.S.I. Mold BuildersScott Phipps, United Tool & MoldRobert Vaughan, Fairway Injection Molding SystemsMike Walter, MET PlasticsAndy Baker, Byrne Tool & DieMichael Bohning, Creative Blow Mold Tooling

AMBA StaffSue Daniels, Member Services CoordinatorShannon Merrill, National Chapter Coordinator

The American Mold Builder is published four times annually in spring, summer, fall and winter by the American Mold Builders Association. Assistant Editor: Sue Daniels; Contributing Author: Clare Goldsberry; Layout & Design: Controlled Color, Inc. phone 630/295-9210; Publishing: Your Images Group, Inc., phone 847-437-6688; Copy deadline: 25 days preceeding publication date. Contact AMBA at 847/222-9402 or email info@amba.org for advertising information, article submission ideas, or a subscription.

Opinions expressed in this publication may or may not reflect the views of the Association, and do not necessarily represent official positions or policies of the Association or its members.

In this Issue:Fall Business Forecast Survey .......................................................................4Point of View .................................................................................................7AMBA Goes to Washington D.C., Holds 49 Meetings .................................9

2011 AMBA Convention Preview 2011 Annual Convention Combines Top-Notch Speakers with Las Vegas and NASCAR ..................................................................13 Get the Most Out Of Your Next Business Convention .................14 Prepare for Battle - Defending Your Price & Bottom-Line ............14

2011 AMBA Chapter of the Year Award Nomination Form .....................182011 AMBA Mold Builder of the Year Award Nomination Form .............20AMBA News .................................................................................................22AMBA Night at the Ballpark .....................................................................24AMBA Members Exhibit at the K Show ..................................................25Member News .............................................................................................26Welcome New Member ...............................................................................28Chapter Spotlight – Chicago Chapter ........................................................28West Michigan 3rd Annual Chapter Golf Outing ......................................29U.S. Congressman Speaks at AMBA Chapter Meeting ..............................30Chapter News ..............................................................................................31Welcome New Partners ...............................................................................32Partner News ...............................................................................................32

Gibson Insurance Health Care Reform Advisory – Grandfathered Plans ..................33 Delay in W-2 Reporting ..................................................................33 Workplace Wellness .........................................................................33 Don’t Wait To Vaccinate! .................................................................33 Misclassification of Independent Contractors ..............................34 Healthcare Reform - The Impact On Workers’ Compensation .....34

Human Resources Final Rules Issued for I-9 Forms ....................................................34 Contracting with a Temporary Agency ..........................................34 Agency & Employer – A Dual Relationship ....................................35

Tax & Business 2011 HSA Limitations ....................................................................35 Small Business Jobs Act: A Windfall for Small to Mid-sized Manufacturers ...............................................................36 Business Owner’s Relatives May Qualify for New Payroll Tax Breaks ...................................................................37 Business Insurance, The Forgotten Asset ......................................38 Workplace Strategies: Keeping Up with OSHA ..............................38 Succession Planning… Why So Many Family Business Owners Fear It and How to Calm Those Fears .............................................39 Five Trends of Family Business ......................................................41 Another Tidbit - Take a Look! - A “How To” Resource! .................42

Business Success Strategies Achieving Greatness: The Value of Associations............................42 Update on Section 529 Plans ..........................................................43

Classified Corner .........................................................................................44AMBA Answers ............................................................................................44Tech Corner .................................................................................................45Advertiser Index ..........................................................................................46

4 AMBAwww.amba.org

from the Summer survey); and Down for 26%, just three percentage points from 29% in the Summer survey.

Another respondent noted, “Since March business has been very hectic. I can’t seem to catch up.” And another respondent said, “This year is better than 2009!”

Profits in the Fall survey are Up for just 22% of respondents, down significantly from the 29% in the Summer survey. Profits are the Same for 65% of the respondents, a huge jump from the 47% in the Summer survey. Profits are trending Down for only 13% of the respondents to the Fall survey, a significant drop from the 24% in the Summer survey, and a huge drop from the 31% of the respondents in the Spring survey.

Whether or not this is a result of a “kinder, gentler” automotive industry as has been reported, with some of the major OEMs deciding that it’s okay if their suppliers make a profit, or just some looser purse strings among OEM engineers and buyers, is still a guess. But it’s definitely a step in the right direction. According to one respondent, “Business is the strongest since 9/11/2001, but payment terms are the worst in four decades.”

Employment levels are also confirming that responding companies are much busier, with employment Up for 28% of the Fall survey respondents, an uptick of two percentage points from the Summer, but double the 14% in the Spring survey. Employment numbers remained the Same for 65%, almost even with the previous survey. Employment is Down for only 7% of the Fall survey respondents, compared to 11% of the respondents in the Summer survey. This is a significant drop from 20% of the respondents reporting reduced employment in the Spring survey.

There is hiring in the wind, and many mold company owners complaining that finding good help is the real problem now. One mold shop co-owner said, “I just hired eight new guys but they’re difficult to find. Many have left the trades and don’t look at the want ads anymore. I got one guy from an ad I put on Craig’s List.”

Another noted: “I need to find quality employees.”

The current average number of shop employees went down by one percentage point to an average of 22. The current average number of design and engineering employees remained steady at five. Work-week hours for shop employees again ticked up by one hour to 47 for the Fall survey. For design and engineering employees the hours also went up by one to 46.

However, one respondent said, “Just because I have my employees here for 32 to 40 hours a week, does not mean they are production for that many hours.

One respondent summed it up quite nicely, reflecting the attitude of many mold company owners: “The economy has many years to go before we see a full recovery. People are getting busy but the problem is we are busy with fewer people employed.” o

AMBA Showing Signs of Sustained Business Uptick

The Fall 2010 Business Forecast Survey of the AMBA reveals that the economic recovery has been sustained over the past three months as business continues getting better for a majority of respondents. The quarterly survey revealed that current business conditions improved significantly over the previous three months, with 15% of the respondents saying that business is Excellent – up six percentage points from 9% of the respondents in the Summer 2010 survey. This is the best percentage for this category in several years. A total of 40% of the membership responded to this recent survey.

Current business conditions also improved significantly, moving up another 9% for those reporting Good conditions (53%) compared to 44% of the respondents in the Summer survey. That is up a full 18% over the last six months as the outlook continues to move in the right direction. Fair business conditions exist for 27% of the respondents compared to 41% of the respondents in the Spring survey. Those reporting Poor business conditions dropped again, with only 5% reporting poor conditions, down from 6% in the Summer 2010 survey. That is down a total of 20% over the past six months. For the third consecutive survey, no one reported Bad business conditions.

Projections of their company’s business over the next three months revealed that optimism continues to be strong. While only 6% of the respondents expect business to Increase Substantially, compared to 9% in the Spring survey, this remains higher than the Spring survey. Those expecting business to Increase Moderately however, increased to 35% from 31% in the Summer survey, but still below the more hopeful 44% in the Spring survey. Respondents expecting business to Remain the Same came in at 44%, down just four percentage points from Summer survey. Respondents expecting business to Decrease Moderately once again increased by four percentage points to 15% compared to 11% in the Summer 2010 survey. None of the respondents expect business to Decrease Substantially.

When asked to compare their company’s current level of business with that of three months ago, responses indicate some movement in a positive direction:

Quoting activity ticked Up by one percentage point for 33% of the respondents of the Fall survey compared to 32% of the respondents in the previous survey; the Same for 49% of the respondents, up from 44% in the Summer 2010 survey; and Down for only 18% of the respondents, a new low over the past six months, indicating that quoting remains strong. In talking to some moldmakers at the recent Fall Conference in Washington, D.C., many said that while quoting activity is up, turning those quotes into hard orders may be another story.

However, one respondent noted, “Recent spike in P.O.’s. Not sure if this is result of a couple big customers spending their ‘capex’ by year end or something more sustainable. Hoping it’s the beginning of a better, more consistent demand trend.”

Shipments are jumped Up for 48% of the respondents, compared to 36% in the previous quarter’s survey, and stayed the Same for 37% of respondents (down from 45% in the Summer survey); and Down for 15% of the respondents, fewer than the 19% reporting in the previous quarter.

Backlog is Up for 41% of the respondents, up once again from the 37% in the Summer survey, confirming the “excellent” and “good” business projections. Backlog is the Same for 33% (down one percentage point

AMBA Member Benefits:

The American Mold Builder subscription – This 48-page quarterly magazine unique to the AMBA features commentary and articles covering industry issues, trends, technology, member news and AMBA news.

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The AMBA Business Forecast Survey was developed to provide AMBA members with informationon the current business conditions and a projection of the upcoming months. The Fall 2010Survey resulted a response rate of 36% from AMBA members. Business remains "Good"for 53% of the respondents, and for 15% of the respondents it is "Excellent."

AMBA Fall 2010 Business Forecast Survey Results

AMBA Members Current Business Conditions

53%

27%5%0%

15%

Excellent

Good

Fair

Poor

Bad

Projection of Business Over the Next 3 Months

44%

15%0%

6%

35%

IncreaseSubstantially

IncreaseModerately

Remain theSame

DecreaseModerately

DecreaseSubstantially

0%

10%

20%

30%

40%

50%

60%

70%

Up Same Down

Current Level of Business in Last 3 Months

Quoting

Shipments

Backlog

Profits

Employment

Current Work-Week Hours

47 46

0

10

20

30

40

50

Wor

k H

ours

Average Shop Hours Average Design & Engineering Hours

Current Number Plant Employees

22 5

0

10

20

30

40

50

Plan

t Em

ploy

ees

Average Shop Employees Average Design & Engineering Employees

53

0

10

20

30

40

50

60

Average number of molds built per member per year

3368

0500

100015002000250030003500

Total number of molds built per year (Based on 72 shops)

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Point of View - The Image of ManufacturingBy: Andy Baker, Byrne Tool

This September I visited Washington, D.C. for the third time with the AMBA. Every visit has been a great experience and extremely educational. On this recent trip as we supported manufacturing and moldmaking, the one thing I noticed is we didn’t need to explain what manufacturing was like we’ve had to do in the past.

There is definitely a buzz on the hill about promoting manufacturing. One of the things we talked to our Congresspersons about is how the United States is the only industrialized nation without a plan for manufacturing. Even our neighbor’s here in North America have a plan for manufacturing. It’s the backbone of every great economy.

What most people don’t know is that manufacturing is a highly technological industry that has many high paying jobs. We have a generation of young adults that have a lot to offer to the manufacturing sector, but many parents guide their children towards being a doctor or lawyer. The image that manufacturing is dying is wrong and needs to change. Manufacturing is alive and needs to be promoted so our economy can flourish.

I support higher education and am currently working towards my bachelor’s degree. Like everyone else I encourage my children to attend college and get a four-year degree. But not every child is ready for college right after high school or maybe they can’t afford it. And not everyone wants to be a doctor or lawyer. Manufacturing offers an alternative. Many manufactures offer tuition assistance to help their employees improve themselves as there are always opportunities for job advancement. Most companies offer a clean, air conditioned work environment where employees can run advanced CNC machines that cost nearly a million dollars or a vast assortment of other jobs from the manufacturing floor to the office to sales in the field. Many of these jobs offer opportunities to make more money than our parents did with their four year degrees.

What can you do to promote manufacturing? I would encourage you to promote manufacturing on career day at local high schools and middle schools. Contact your representatives at their local office and ask what they are doing to support manufacturing. Invite them out to visit your shop and show them what you do. Invite the press to your shop when you invest in new equipment or new employees. Talk to your friends about what manufacturing has done for you. Show people the things you make when you’re in a car, at a hospital, in an office or wherever you see products you have made. Encourage the next generation. If they’re hands-on and don’t want to sit in an office, manufacturing has a lot to offer.

Personally I can’t wait to see what the future generations will make and how they will make it. o

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Be sure to notify AMBA of any email changes, so no interruptions occur with important information from the AMBA.

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AMBA 2010 Fall ConferenceWashington, D.C.

www.amba.orgAMBA 9

AMBA Goes to Washington D.C., Holds 49 Meetings

The AMBA held a successful Fall Conference in Washington, D.C., once again meeting with Senators, Congresspersons and their legislative staff to voice AMBA support for manufacturing in the USA. Teams comprised of members, partners and the media gathered and held a total of 49 pre-arranged visits to the elected officials that represented the States/Districts of the team members.

There were five teams: Illinois Delegation, Michigan Delegation, Minnesota/Wisconsin Delegation, the Southeast Delegation and the USA Delegation (non-chapter members). Each team met with either the Senator/Congressperson or their selected legislative staff. AMBA members and partners provided a packet of information about the AMBA, its members, and the major issues that impact our businesses, our industry, and U.S. manufacturing as a whole.

Teams encouraged their Senators and Congresspersons either directly or through their legislative staff, to vote for those bills that would keep manufacturing in the United States, and create a more favorable business climate so that manufacturers will want to stay and expand their operations in the United States. That would include reducing the tax burden on small businesses, minimize other structural cost burdens, incentivize innovation and R&D, and assure the availability of capital so that U.S. manufacturers can compete.

AMBA members also thanked those Senators and Congresspersons who voted for the Small Business Jobs Act, which passed and was signed into law on September 27. While a number of Senators and House members voted against the legislation because of a $30 billion “mini-TARP” to community-based lending institutions, overall the bill promises to be a step in the right direction for small businesses.

Doug Woods, President of the Association for Manufacturing Technology, told Conference attendees that “The key things [in the bill] stand on their own. If $30 billion helps fund community banks to allow them a lower rate, even that’s okay.”

While in Washington, D.C., the House voted on H.R. 2378, known as the China Currency Bill, addressing China’s fundamental undervaluation of its currency. The two critical points in the Bill that were noted in the House Ways and Means hearing the previous week, were that “China’s mercantilist exchange rate policy places a drag on U.S. economic growth and job creation” and “is a major distortion in the international marketplace.” Secondly, “Efforts to date have not worked to correct the imbalances.”

The House passed that bill around 6 pm on Wednesday, September 29, shortly before Congress voted to recess prior to the upcoming November elections.

Overall, attendees to this year’s Fall Conference found their elected officials more receptive to what the AMBA had to say. “I definitely sensed a more piqued interest in what we had to say this year versus last year,” said Justin McPhee, VP engineering for Mold Craft Inc., in Willernie, MN. “They really wanted to hear what our problems were, and they listened to us. They seemed to be a lot more receptive to us this year than last.”

Mike Armbrust, President of the AMBA, said, “In comparison to last year, I am very pleased with the exposure manufacturing has in Washington. In particular, the Illinois representatives appear to recognize the importance of the manufacturing base in our state. We

have a lot of work still to do, but policy is reflecting an emphasis towards small business and manufacturing in particular.”

Armbrust noted that “when you look at some of the issues that we’re facing, a shortage of skilled workers in our trade is a big one. Bill Foster, an Illinois Representative, helped sponsor HR 6003, in support of MIT’s Fab-Lab Academy, a mobile additive manufacturing facility that provides access to innovation, technology and encourages creativity to young people and show them the opportunities that manufacturing offers. “There are 9 or 10 in Fab-Labs in existence currently and the bill supports creating not-for-profit funding to build a total of 40 of these to educate young people and to use as on-site workforce training,” said Armbrust. “They had one of the Fab-Labs on the Mall at the Capital. It certainly promotes one of the issues we’re against – fill the skilled labor gap and impress upon high school counselors that manufacturing is a viable career.”

It was agreed by all that those of us in manufacturing still have a lot of work to do with respect to getting Washington’s attention, and getting them to pass legislation that will favor manufacturing, incentivizing U.S. manufacturers to expand in the U.S., and boost job creation.

Everyone who attended the Fall Conference seemed to come away with the impression that suddenly Washington, D.C. is taking a greater interest in manufacturing. Mike Walter, general manager for MET Plastics, a molder and mold manufacturer in Elk Grove Village, IL, said that his team “had a really positive experience.” He noted that he personally felt “more upbeat coming out of these meetings this year than last year.” The people that the Illinois delegation met with were responsive in getting back to them with answers to some questions they posed about legislation and where their Senators/Representatives stood. “And they were fairly lengthy answers,” Walter noted. “Last year we were the unwanted industry – this year they seemed genuinely interested in us.”

Every week the two Illinois Senators invite their constituents to have coffee with them, so on Thursday the Illinois delegation participated in that event. There were about 50 people in the room, many of them educators, so Walter said he took advantage of that when he got the opportunity to make a comment. “I directed my comments to the educators in the room, and noted how our industry has a lack of skilled workers, and the fact that we need better educated and more highly-skilled people,” said Walter. “That gave Senator Durbin the opportunity to comment on how manufacturing can create jobs. I told them that we know jobs are high on their list of priorities and we have solutions for you. It was good.”

The Minnesota/Wisconsin team also had an opportunity to meet with Senator Al Franken (D-MN) for “morning porridge” – a wild rice concoction for which Minnesota is famous. Justin McPhee, VP of engineering for Mold Craft Inc. in Willernie, MN, said the porridge was actually “really good” and the event quite humorous. About 60 of Franken’s constituents were in attendance.

The first order of business was to set down his coffee cup and “take care of business and he goes into his bathroom, came back in a few minutes and stood on his desk to give a speech,” McPhee related. “He talked about his support for manufacturing, but his voting doesn’t reflect that. It was good to hear that he said he supports manufacturing but it would be better if he actually voted that way. He’s against extending the Bush tax cuts because the government needs the revenue to bring down the deficit.”

Like Mike Walter, Justin McPhee felt overall greater interest from Senators and Representatives. “This time I definitely sensed more

10 AMBAwww.amba.org

piqued interest,” he said. “They really wanted to hear what our problems were, and they listened to us. They seemed to be a lot more receptive to us this year than last.”

Doug Woods addresses innovation, collaboration and National Manufacturing Policy

Doug Woods, President of The Association for Manufacturing Technology, told Fall Conference attendees that “The key things [in the bill] stand on their own. If $30 billion helps fund community banks to allow them a lower rate, even that’s okay.”

Woods, a former moldmaker himself in his family’s business, Liberty Tool & Die, which his grandfather started, also gave the keynote presentation. Woods, who has only been in Washington, D.C. for 16 months, noted that was long enough for him to understand what is needed, and emphasized three keys: innovation, collaboration and a coherent, focused national policy on manufacturing. “We have to have a national strategy,” he said.

“Innovation is really a key source of economic growth,” Woods stated. “We need to take great ideas and commercialize them, and generate wealth.”

While the U.S. thought that it could maintain a strong economy with advanced technology products, the AMT study shows that the manufacture of Advanced Technology Products in the U.S. have fallen

off over the past 10 years. Gradually, Woods said, the U.S. allowed the manufacture of discrete components (semiconductors, etc.) to go to China, and now we import these discrete products.

Next we allowed the assembly to go to China, and now we import completed assemblies. Third, total manufacturing activities have left – the activities that created high-paying jobs for U.S. workers. Fourth, if the U.S. allows R&D to go offshore – as has been happening – we’ll import technology as well.

“We’ve lost it all,” said Woods. “The majority of patents held for flat-screen television technology are held by Taiwan.”

Woods noted there are five positions with respect to innovation that we need to take to strengthen the U.S. economy:• Innovation drives economic growth, and creative destruction will

happen. “You don’t need to be the [technology] creator, but you do need to be the innovator,” Woods said. “Take the best technology and processes in your industry and use them to create something the market needs.”

• Innovation is driven by productivity and adaptive efficiency.• Developing those efficiencies requires public/private cooperation.• Stimulating a smart public/private partnership is the best way

implement innovation.• Innovation is the path to change and progress.

“Innovation is a way of transforming the resources of an enterprise through the creativity of people into new resources and wealth,” Woods explained. “Develop a new process using technology, or a new product using technology. But we must drive wealth creation in some way. All innovative companies have a strategy and well-defined processes.”

Woods provided some tips for companies that want to become more innovative:• Put your R&D efforts toward focusing on customer solutions.• Invest in R&D – at least 5% of your revenues need to go into R&D• Invest in new equipment – put 5% of your revenues into new

equipment• Implement training programs. “You need at minimum of 40 hours

annually in training for your employees because new technology is being created continually,” Woods said.

• Be an innovative leader. “Innovative companies are led by innovative leaders,” stated Woods. “Innovation is for all companies.”

Woods also added that the U.S. “must have direction – a strategy – that will drive a central and specific mandate for policy” for manufacturers. Woods offers these strategic means to promote manufacturing in the U.S.:

1) Incentivize innovation and R&D for manufacturers2) Assure the availability of capital to manufacturers3) Minimize structural cost burdens to manufacturers4) Increase global competitiveness for U.S. manufacturers5) Enhance collaboration between government, academia and

industry6) Build a better educated and trained “smart force – that’s your

creative element

“The big problem in the U.S. is a lack of focus on manufacturing as the driver of our economy,” said Woods. “We need to get our government to care about manufacturing, not about what side of the aisle they’re on.”

Douglas K. Woods, President, Association for Manufacturing Technology

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So, You Think You Have a Great Idea?

Introducing a new book by Clare Goldsberry that will help you and the inventor. So, You Think You Have a Great Idea! guides the inventor through the maze of dealing with plastic part designers, mold designers, moldmakers and molders. It offers tips to moldmakers and molders on how not to get stuck with someone’s great idea, and tips to inventors on how not to deal with mold shops. First rule for inventors - have money! Second rule - never ask a moldmaker to build the tool now in exchange for a piece of the action later. If you’ve ever dealt with an inventor, or know inventors who need help dealing with the plastics industry, this is the book! A special price at $6.95 available directly from Clare Goldsberry, please call (602) 996-6499 or email at clarewrite@aol.com.

Scott Paul addresses Conducting an Effective Meeting on Capitol Hill

Scott Paul, the Executive Director, Alliance for American Manufacturing, discussed “Conducting an Effective Meeting on Capitol Hill” at the conference. An experienced Washington, D.C. professional, Scott walked through what the attendees could expect in their meetings with Senators and Congresspersons. Scott explained that members of Congress play a huge role in the competitiveness of manufacturing. They need your expertise and perspective as they attempt to address the numerous issues that affect small business manufacturing in America. A well intended piece of legislation may have negative unforeseen consequences, so constituent perspective is vital.

Scott explained the inner workings of the 100 Senators and 435 members of Congress, and the effect the looming election had on each member. He pointed out that Congress often legislates by anecdote - compelling stories prompt action. Members of Congress need to hear from home. Constituents have an impact and with our input legislators would struggle understanding specific issues that affect mold builders. Congress is full of young staffers who have power and influence but not the experience or expertise to appreciate the nuance of certain positions.

Scott said that because everyone is so busy, there would be relatively little time for each meeting with your Congressperson. It would be

Scott Paul, Executive Director, Alliance for American Manufacturing

important to get your key points out early and often. Be clear concise, and compelling! The AMBA attendees were prepared with five key points, and were ready with personal examples to drive their points home.

Scott then wrapped up by giving a current status report. Congress was nearing the end of its legislative session before the November elections, which means that people may be distracted or stressed. The House Democrats are in the midst of a modest but positive “make it in America” agenda focused on manufacturing, and that it should be part of our discussions. The Senate is gridlocked but our points still need to be made. o

12 AMBAwww.amba.org

2011 AMBAAnnual Convention

March 2-6, 2011Red Rock Casino, Resort and Spa

Las Vegas, Nevada

Accelerate Your Profitability

Keynote speaker:Steve Rose, Practice Lead of Kotler Marketing Group presents the keys to “Defending Your Price.” Learn how to compete against low-cost, overseas suppliers who can’t match your quality and service but undercut you on price. Rose will share success stories and best practices that have allowed high quality suppliers to defend their price and win more business.

Also presenting:Steve Lefever , Chairman, Business Resource Services presents “Profit Mastery”. Back by popular demand as an AMBA convention presenter, Steve will present an educational and entertaining half-day session on his “Profit Mastery” program. Optional Post-Convention Activity:

2011 Las Vegas Shelby American NASCAR Race

March 6, 2011- Las Vegas Motor Speedway

Register at www.amba.org

www.amba.orgAMBA 13

2011 AMBA Annual Convention Preview2011 Annual Convention Combines Top-Notch Speakers with Las Vegas and NASCAR It’s time to register for the AMBA Annual Convention, March 2-6 at the Red Rock Resort and Spa in Las Vegas, NV. The theme, “Accelerate Your Profitability,” promises to bring the best presentations in the areas of business performance, cutting-edge technology and best practices. The Keynote address will be given by Steve Rose, Practice Lead of Kotler Marketing Group, a leading consulting and training firm specializing in sales and marketing for suppliers to the automotive industry. Rose’s presentation, “Defending Your Price” will provide attendees with the keys to competing against low-cost overseas suppliers who can’t match U.S. moldmakers when it comes to building innovative molds and providing quality and service, but undercut the price. Rose will share success stories and best practices that have allowed high-quality suppliers to defend their price and win more business. It doesn’t matter what markets you serve, learning how to defend your price and win new business is critical to your success. Back for the fourth time – and by popular demand – Steve Lefever, Chairman, Business Resource Services, presents “Profit Mastery.” This half-day seminar will be classic Lefever, both entertaining and educational in a way you’ve never heard before. If you think accounting and P&L statements are boring, you’ve never heard Lefever. Those who have heard him at past AMBA conventions are excited about his return. If you’ve never heard Lefever before, you’re in for a real treat. You don’t want to miss “Profit Mastery” by Steve Lefever. And for all the NASCAR buffs out there, stay over and join the AMBA group on March 6 for the 2011 Vegas Shelby American NASCAR Race at the Las Vegas Motor Speedway. It’s a great way to end a great convention in a great city! The AMBA Annual Convention has a long history of being a great event where moldmakers get together, network, have fun and learn about new technology and best business practices to help you succeed. If you’ve never been to an AMBA Convention before, this is the one you want to attend! Registration is open at www.amba.org.

2011 Convention Schedule of EventsWednesday, March 2:•Optional Las Vegas city tour• Attendee Registration •Welcoming Cocktail Reception

Thursday, March 3: (Meetings run 8:00am-4:00pm)• “Defending Your Price” – Keynote, Steve Rose, Kotler

Marketing Group• Economist Review of Profitability of the Mold Industry• AMBA Team Building Activity •Optional Evening Group Event

Friday, March 4: (Meetings run 8:00am-3:00pm)• “Profit Mastery – Accelerate Your Profitability”, Steve Lefever,

Chairman, Business Resource Services • Technology Sessions• Annual Dinner Meeting

Saturday, March 5: (Meetings run 8:30am-11:45am)• “Lessons from his Business Transformation” - Tom Duffy,

President of Plastics Components Inc,• Best Practices Sessions from AMBA members who have been

Successful at Accelerating Their Profitability• Best Practices Q&A•Optional Afternoon Group Events

Sunday, March 6:•Optional: 2011 Vegas Shelby American NASCAR Race at the

Las Vegas Motor Speedway

Pricing• $895 - Full Convention package - Member/Partner• $995 - Full Convention package - Non Member/Non-Partner• $250 - Spouse/Guest/Child • Full Convention package - Early Bird ($100 off if paid in full by

1/7/2011)• Full Convention package - Late Fee (additional $50 if paid

after 1/26/2011)

Full Convention Package includes: • Welcoming cocktail reception • AMBA annual dinner meeting• Keynote and guest speakers, educational programs • Welcome gift for all participants • Lunch on Thursday and Friday• Team building event

[Note: Hotel not included]

Thank you to the following companies who have signed up before October 31st to be 2011 AMBA Convention Sponsors/Tabletop Exhibitors/ Advertisers:

14 AMBAwww.amba.org

2011 AMBA Annual Convention PreviewPrepare for Battle - Defending Your Price & Bottom-Line By: Steve Rose, of Kotler Marketing Group, and upcoming Keynote speaker at the 2011 AMBA Annual Convention

With the North American economy continuing to lurch forward, there does appear to be signs of hope. The automotive industry, in particular, has shown signs that it is on the mend. Ford recently posted a $2.6 billion dollar profit in the second quarter and GM has announced that it is on track to earn a profit for 2010. With such a big market such as Automotive poised for a rebound, does this bode well for the fortunes of North American moldmakers and their suppliers? The answer, we are afraid, is a resounding “No.”

In fact, obscure but far-reaching strategies that automakers began adopting 18 years ago contributed significantly to the industry’s gradual decline since then, and to the dire situation that North American suppliers, particularly small to mid-sized suppliers, face today.

In particular, the Detroit Three’s approach to dealing with their 1000s of parts suppliers took shape during that period. It led to an OEM-supplier paradigm that is profoundly counterproductive for the industry, as we found in our research with suppliers. Changing this paradigm is critical not only for suppliers, who account for most of our country’s auto jobs – more than 600,000 U.S. workers at last count. Change can also create the foundation for the entire industry to be more innovative and sustainable going forward.

To understand the roots of the problem, we need to turn back the calendar to a long-forgotten decision taken by GM. Struggling to manage costs during the early-1990s recession, GM installed a new top purchasing executive, Jose Ignacio Lopez de Arriortua. It was a move that garnered little attention, compared to what it would today. At the time, purchasing managers at Ford, Chrysler and GM wielded little power. Their role was straightforward - order the products approved and specified by Engineering.

Almost overnight Lopez changed all that. He tore up existing contracts and demanded that suppliers agree to immediate price cuts of up to 20%. Many suppliers protested, but ultimately submitted to his demands. Lopez’s early success delivered a windfall for GM. Emboldened, they began crafting a new aggressive standard for purchasing operations – a standard copied not only by Ford and Chrysler, but also by many other large players in the supply chain, both in the U.S. and abroad. Over the next eighteen years, Detroit and its increasingly powerful purchasing departments demanded, and got, ever greater discounts and cost-downs from their suppliers. Purchasing agents began getting bonuses for successfully negotiating lower prices. Suppliers, over time, became conditioned to believe that the “lowest price always wins.”

In response, suppliers have spent decades working diligently to lower their own costs, investing in Lean Manufacturing, process re-engineering, and similar efficiency initiatives. But even when suppliers are successful at reducing costs, purchasing typically responds by demanding that any cost savings be passed on to them in the form of lower prices.

Get the Most Out of Your Next Business Convention

Most business people attend at least one business convention a year. You might attend many more than that depending upon your position and the industry you’re in. But no matter how many conventions you attend, if you don’t plan ahead, you run the risk of wasting time and missing out on valuable contacts and presentations.

Keep the following tips in mind to help you get the most out of your next business convention:

Know why you’re attending. For some, conventions can be an important opportunity to meet other business owners, vendors, consultants, and experts in the field. Keep track of how many contacts you actually make at each convention by collecting business cards. If it’s information you’re after, pay attention to the new products or services being offered. When the conference is over, review your business needs and how (or if) the event helped serve them. If a convention you’ve been attending for many years no longer seems to be doing anything for you, you may want to rethink attending it every year.

Review the schedule beforehand. Plan ahead to get the most out of your next convention. Review all of the workshops and sessions and decide which ones you should attend. If necessary, delegate the task of attending workshop sessions to colleagues who are traveling with you.

Stroll the convention exhibitors. Most conventions have dozens of exhibitors and vendors displaying the latest industry information and products. Make sure you carve out a block of time to peruse the convention floor. Stay away from those time-wasters who ask you to fill out surveys and watch their presentations.

Network, network, network. Carry an ample supply of business cards with you at all times and don’t be shy about handing them out. Introduce yourself to the people sitting near you in workshops, while eating, on the exhibitor show floor, wherever you can. Also, get the full list of attendees, including company names, phone numbers, and email addresses. This will help you continue networking after you’ve returned home.

Be sociable. Most business conventions have multiple parties on the schedule, so make sure you find time to attend a few. Parties are a great, low-key way to meet new contacts.

Create a post-convention action plan. After the convention is finished, you might be tempted to toss those business cards into the circular file and get back to running your business. Don’t. Instead, sit down and create an action plan. Maybe this plan will involve writing a few important emails to follow up on possible leads. Or maybe it’s calling the new vendor you met at one party. Is it time to purchase that hot new product you saw on the trade show floor? Whatever it is, do it within the first week of your return or you’ll likely forget to take action.

Article taken from Allbusiness.com, a D&B Company.

www.amba.orgAMBA 15

2011 AMBA Annual Convention PreviewThis success at negotiating suppliers down on price has come with huge costs. Last year, Kotler Marketing Group recently conducted a study of 200 parts suppliers, including dozens of moldmakers, and found that 72% of them claim some sort of non-cost advantage over their competition. These include advantages like patented technology, quality, or various value-added services. But notably, in price negotiations most of them still end up matching the lowest bid more than 75% of the time. The sad reality is that many of them have real innovations to offer but they rarely get rewarded for the value they create.

This is a great deal for Detroit’s automakers in the short run. But in the long run, if suppliers are not able to negotiate a sufficient return, innovation and investment get systematically discouraged. This leads to an even greater focus on price above all else, creating a downward spiral. Consider that the rate of market share loss for the Detroit Three actually began to accelerate at the same time they implemented their current sourcing philosophy.

In a sign of how dysfunctional the situation has become, most suppliers instruct their salespeople never to reveal anything innovative to certain carmakers. Not only are they unlikely to get rewarded, they fear being forced to give the innovation away as a condition for the carmaker to renew existing contracts. (The Detroit squeeze play!)

If the North American automotive industry is to reinvent itself, both the automakers and suppliers must make changes to the way they work with one another. For instance, the Detroit Three should consider radically revamping the Purchasing Department’s incentive structure, or do away with it completely. Better “scorecards’ need to be developed that reward suppliers that bring true value and innovation.

Suppliers must see it as their role to educate purchasing and other stakeholders about why it makes good business sense to “pay more for more.” History shows that suppliers cannot rely on purchasing to figure it out on their own. As a purchasing executive at one of the Detroit Three told us:

“I don’t mind paying a higher price, provided I can be convinced that we will be able to reduce our costs as a result. But it’s not my staff’s responsibility to figure out when it makes sense to do so; it’s the suppliers’.”

For suppliers, this involves documenting the economic value that their part or service delivers - benefits such as improved quality and reduced scrap and re-work, or faster testing and homologation, or even getting new models to market faster - the value of which is often not well understood or recognized by the carmakers.

Building this type of “business case” is both challenging and rewarding. It is challenging because it involves quantifying benefit claims – claims that can touch on the complex vehicle design, development, and production processes. But it is rewarding for the same reason. Meeting the challenges that come with adopting this sales and marketing approach will give moldmakers a powerful competitive advantage over competitors from lower cost countries such as Mexico, China and India, who can’t match the level of quality and innovation, but undercut them on price.

The current situation presents a host of challenges, particularly for moldmakers in the U.S. and Canada, but they are challenges that can be overcome. What is required is a fundamentally different sales approach and set of skills.

16 AMBAwww.amba.org

2011 AMBA Annual Convention PreviewA different sales approach

In the current environment, it is becoming more and more critical for companies to translate the features and benefits of their technology, products and services into a language customer can understand – the language of dollars and cents.

Most sales reps have learned to translate product features into benefits (e.g., higher quality parts = fewer in-plant quality incidents and less downtime). Now, they must help customers to understand what the benefits are worth in monetary terms (i.e., what is a 5% improvement in plant uptime worth?).

Research conducted by our firm earlier this year, in conjunction with several associations whose members are suppliers to the automotive and commercial vehicle industries, indicates that there is a segment of suppliers that are able to consistently get paid for the innovations and advantages that they offer to buyers, with some even winning price premiums up to 31% of the time. These suppliers have found ways to break out of the cost-focused, purchasing-driven, paradigm that is increasingly taking hold of most industries.

How were they able to do this?

Pricing Leaders vs. Frequent Discounters

The study found that while discounting is still pervasive and widespread, suppliers are able to win business without being the lowest price. When suppliers win business without being the lowest price, they have won a “premium.” For example, if a supplier of catalyst

technology were to resist a demand for a 3% lower price and still be awarded the business, it has just won a premium. When suppliers successfully reject requests by purchasing to accept a cost down, they have also won a premium.

To better understand why some suppliers are more successful than others at winning premiums we wanted to benchmark against the most successful suppliers and identify best practices for increasing that success. The study defined two key groups for benchmarking purposes:

“Pricing Leaders” are respondents who not only win premiums on more than 25% of bids, but also discount in similar or lesser quantities than in the past. Pricing Leaders made up about 31% of all respondents.

“Frequent Discounters” are respondents who win premiums less than 25% of the time. They discount in similar or greater quantities than in the past, and they made up about 36% of all respondents.

Interestingly, pricing strength correlated as much or more with effective sales strategies and tactics as they did with product / service advantages. For instance, the study found that perceived technology, quality or service advantages do not correlate with winning premium prices.

It turns out what matters most is equipping account teams with the right sales tools and collateral and making sure they are trained in the right skills. What tools and training are particularly effective?

LaserSalesLaserSales

www.amba.orgAMBA 17

2011 AMBA Annual Convention PreviewSales tools

One area where our research found best-practice supplier salespeople differ the most from their peers is in the sales tools they use.

While every supplier provides customers with product brochures and data sheets, best practice suppliers are more likely to offer sales tools that document value to the customer. These fall into three categories:

• Anecdotal information regarding benefits to the customer• Detailed analysis of how a supplier can lower a customer’s costs (i.e.

by reducing scrap and re-work)• Case studies documenting and quantifying the value delivered to

customers

The most successful suppliers differentiate themselves in their use of in-depth case studies documenting total value to customers. With their focus on efficiency and cost reduction, plant and quality managers (not Purchasing!) are a particularly important audience for these types of detailed, quantitative collateral.

Sales training

Study participants were asked about the types of sales training programs they had taken in the past five years. The survey covered a range of training programs, falling into two basic categories:

Negotiations training – these courses address topics such as competitive bidding strategies, and understanding competitors’ and customers’ bargaining power. Overall, the vast majority of suppliers (81%) and even more Frequent Discounters (94%) report taking negotiations training. However, only 68% of Pricing Leaders do.

Value-based programs – these sales training courses focus on understanding customer problems and the value of solving them. They include value-based selling and consultative selling programs. Pricing Leaders prefer these types of training programs, with 68% saying they have taken them, whereas just 53% of Frequent Discounters report doing so.

Much traditional, price-focused negotiations training are limited by their lack of focus on understanding and communicating total cost and value. Cognizant of this pitfall, best practice suppliers’ use of value-based sales training helps them broaden the sales negotiation and shift the focus away from price.

No one can argue that the moldmaking industry is experiencing extraordinarily difficult times. But difficult times also create opportunities for companies to survive and even thrive in the long run.

Armed with new skills and sales tools, suppliers will be in a position to diversify their customer base within the automotive industry as well as profitably penetrate new markets such as aerospace, healthcare, and technology and telecom, where, like the automotive industry, purchasing decisions are increasingly driven by price.

Suppliers that take these steps will have the capital to reinvest in R&D, thereby setting the stage for future innovations and growth. Otherwise, high-quality parts suppliers in high-wage countries will continue to lose business to lower quality manufacturers in lower-wage countries like Mexico, Eastern Europe, China and India.

Not only is change possible, there is a growing understanding that it is critically needed. Without such changes it is unrealistic to think that a

truly innovative and sustainable moldmaking industry can emerge from the current economic recession.

About the Author:Steve Rose is a Managing Director for Kotler Marketing Group’s Automotive and Commercial practice. Kotler Marketing Group (www.kotlermarketing.com) is a consulting, research and training provider with extensive experience serving industrial suppliers to the automotive, aerospace, technology and medical device industries. Kotler Marketing Group has conducted numerous studies exploring sales and marketing best practices. Their research has been published in many magazines and publications, including the Detroit Free Press, Heavy Duty North American Die Casting Association, Aftermarket Journal, Purchasing Magazine, Business Week and Selling Power. o

info@wi-engraving.com

Wisc_Engraving.indd 1 10/23/08 1:33:02 PM

Do you Want Company Exposure in Industry Magazines?

Contact AMBA’s Marketing Consultant, Clare Goldsberry, and she will write a FREE press release to help promote your company’s services, products, equipment & special milestones to industry magazines and local newspapers. Clare has a BA Degree in Journalism, and is the senior editor of Modern Plastics magazine. She also offers marketing assistance in developing company marketing plans, brochures & customer lists. Contact her at (602) 996-6499 or email clarewrite@aol.com.

18 AMBAwww.amba.org

22001111 AAMMBBAA MMOOLLDD BBUUIILLDDEERR

OO FF TT HH EE YY EE AA RR AAWWAARRDD

The AMBA Mold Builder of the Year Award was instituted to recognize outstanding contributions made by an AMBA member. The recipient of this prestigious award will be an outstanding business leader dedicated to the industry, and an active member of the AMBA.

For more than 37 years, the American Mold Builders Association has been the only trade organization that dedicates itself to just one industry – mold manufacturing. AMBA represents nearly 300 U.S. mold manufacturers over 30 states and 12 chapters. Member companies range from small, specialty niche organizations to large, full-service firms, and equipped with state-of-the-art machinery and CAD/CAM technology to provide the best in new-product and mold design and build.

AAWWAARRDD PPRREESSEENNTTAATTIIOONN The 2011 AMBA Mold Builder of the Year Award recipient will be announced during the upcoming Annual AMBA Convention in Las Vegas, Nevada – March 2-6, 2011 at the Red Rock Resort & Spa. Announcement of the award recipient will be made to local newspapers, national industry publications, AMBA’s publication, and posted on the AMBA website. The award recipient is expected to attend the convention to receive this award. AAWWAARRDD The MBOY award recipient will not only be presented with the prestigious Mold Builder of the Year Award, but the award recipient will also choose the industry-related educational program or students(s) that will receive a $5,000 Progressive Components scholarship grant. EELLIIGGIIBBIILLIITTYY AMBA members may nominate themselves or nominate a peer. Self-nominations are highly encouraged. The award recipient will be the individual, not the company. If you believe, and you are very proud that you have built a good solid business: a company that is doing positive things in the industry…we encourage you to nominate yourself! Do you work hard toward business growth?

Try to find new ways to be competitive? Consistently looking for innovations? That’s what it takes to be the Mold Builder of the Year! Tell us about it and why you believe you deserve to be the award winner. CCRRIITTEERRIIAA AMBA will coordinate the judging based on the four criteria listed below by a panel of industry–related judges.

Nominee must be a member of the AMBA.

Nominee should be an outstanding member of the industry, working to promote the industry through the AMBA, the community, apprenticeship programs, trade school participation, or other forms of education of customers, employees and community.

Nominee should be an outstanding businessperson, as evidenced by his/her company’s growth, commitment to technology innovation, and dedication to the ideals of the moldmaking business of honesty and fairness, and creativity in meeting the challenges that the industry faces.

Nominee should be someone who exemplifies an American mold builder, and is representative of what the AMBA promotes in its members.

Thank you for your participation!

AAWWAARRDD SSPPOONNSSOORREEDD BBYY PPRROOGGRREESSSSIIVVEE CCOOMMPPOONNEENNTTSS

www.amba.orgAMBA 19

22001111 AAMMBBAA MMOOLLDD BBUUIILLDDEERR OOFF TTHHEE YYEEAARR NNOOMMIINNAATTIIOONN FFOORRMM

__________________________________________________________________________________________________ Nominee’s Name Title __________________________________________________________________________________________________ Company Name # of years in business __________________________________________________________________________________________________ Company Address _________________________________________________________________________________________________ City ST Zip __________________________________________________________________________________________________ Phone E-mail __________________________________________________________________________________________________ Nominator’s Name (if different than above) Nominator’s Company Name __________________________________________________________________________________________________ Nominator’s Phone # Does the nominee know that you nominated him/her for this award? Yes No

NNOOMMIINNEEEE PPRROOFFIILLEE Number of years in the industry:_______ Organizations involved in outside the industry: _____________________ ___________________________________________________________________________________________________________ ___________________________________________________________________________________________________________ Year member joined AMBA: _________________ List other industry trade groups that nominee belongs to:______ ___________________________________________________________________________________________________________ ____________________________________________________________________________________________________________

Is nominee an active AMBA member, i.e. participates regularly in AMBA programs (meetings, committees, boards, chapters, etc)? (Attach a separate sheet if necessary) __________________________________________________________________________________________________ __________________________________________________________________________________________________ __________________________________________________________________________________________________

Describe nominee’s community work/service performed on behalf of the industry with regard to education, government activities, apprenticeship programs, etc. (Attach a separate sheet if necessary) __________________________________________________________________________________________________ __________________________________________________________________________________________________ ____________________________________________________________________________________________________________

Provide some history of the company’s growth, its use of technology innovation to provide creative, cutting edge solutions to customer’s mold requirements, unique things this individual is doing to grow his/her business in spite of the challenges of competition and economic downturns. (Attach a separate sheet if necessary) ____________________________________________________________________________________________________________ ____________________________________________________________________________________________________________ ____________________________________________________________________________________________________________ Describe ways in which you think the nominee exemplifies the “American Mold Builder” and why he/she deserves this prestigious honor: (Attach a separate sheet if necessary) ____________________________________________________________________________________________________________ ____________________________________________________________________________________________________________ ____________________________________________________________________________________________________________

Nominations (plus any attachments) must be received no later than, Friday, Dec. 17, 2010.

Mail, email or fax to: Sue Daniels - Mold Builder of the Year Award

American Mold Builders Association 3601 Algonquin, #304, Rolling Meadows, IL 60008

Phone 847.222.9402 Fax 847.222.9437 Email sdaniels@amba.org Website www.amba.org

20 AMBAwww.amba.org

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For more than 37 years, the American Mold Builders Association has been the only trade organization that dedicates itself to just one industry – mold manufacturing. AMBA represents nearly 300 U.S. mold manufacturers over 30 states and 12 chapters. AMBA member companies range from small, specialty niche organizations to large, full-service firms, and equipped with state-of-the-art machinery and CAD/CAM technology to provide the best in new-product and mold design and build. EELLIIGGIIBBIILLIITTYY AMBA chapters may nominate themselves or be nominated by individuals outside the chapter. The award recipients will be the chapter as a whole. If you believe that a particular AMBA chapter is doing positive things in the industry…we encourage you to nominate them! Does the chapter work toward implementing or maintaining apprenticeship programs? Or does your chapter work to promote moldmaking in your state and nationally? Those are some of the things that we’re looking for from the Chapter of the Year! Tell us about it and why you believe your chapter deserves to be the award winner. AAWWAARRDD PPRREESSEENNTTAATTIIOONN The 2011 AMBA Chapter of the Year Award will be presented during the upcoming AMBA Annual Convention in Las Vegas, Nevada – March 2-6, 2011 at the Red Rock Resort & Spa. Announcement of the winning chapter will be made to local newspapers, national industry publications, AMBA’s publication, and posted on the AMBA website. A representative from the winning chapter is expected to attend the convention to receive the award.

AAWWAARRDD The Chapter of the Year award winner will not only be presented with the prestigious Chapter of the Year Award, but the winning chapter will also choose the industry-related educational program or students(s) that will receive a $5,000 Progressive Components scholarship grant. CCRRIITTEERRIIAA AMBA will coordinate the judging based on the three criteria listed below by a panel of industry–related judges.

What has your chapter done to promote education and apprenticeships in your community and/or member shops?

What has you chapter done to promote

moldmaking in your state?

What has your chapter done to promote moldmaking nationally?

Examples are implementing apprenticeship programs, working with local secondary schools, technical colleges and community colleges to promote interest in the moldmaking industry; holding chapter meetings with state of the art topics and speakers; working with state legislators to implement mold lien laws; participating in letter-writing campaigns to Congress.

Thank you for your participation!

Award Sponsored by Progressive Components

www.amba.orgAMBA 21

22001111 AAMMBBAA CCHHAAPPTTEERR OOFF TTHHEE YYEEAARR NNOOMMIINNAATTIIOONN FFOORRMM

__________________________________________________________________________________________________ AMBA Chapter being Nominated __________________________________________________________________________________________________ Nominator’s Name Nominator’s Company Name __________________________________________________________________________________________________ Nominator’s Phone # Nominator’s email address Does the chapter know that you’ve nominated them for this award? Yes No

CCHHAAPPTTEERR PPRROOFFIILLEE What has your chapter done to promote education and apprenticeships in your community or amongst member companies? (Attach a separate sheet if necessary) __________________________________________________________________________________________________

__________________________________________________________________________________________________

__________________________________________________________________________________________________

__________________________________________________________________________________________________

__________________________________________________________________________________________________ What has your chapter done to promote moldmaking in your state? (Attach a separate sheet if necessary)

__________________________________________________________________________________________________

__________________________________________________________________________________________________

__________________________________________________________________________________________________

__________________________________________________________________________________________________

__________________________________________________________________________________________________

What has your chapter done to promote moldmaking nationally? (Attach a separate sheet if necessary) ____________________________________________________________________________________________________________

____________________________________________________________________________________________________________

____________________________________________________________________________________________________________

____________________________________________________________________________________________________________

____________________________________________________________________________________________________________

Nominations (plus any attachments) must be received no later than, Friday, December 17, 2010.

Mail, email or fax to:

Sue Daniels – Chapter of the Year Award American Mold Builders Association

3601 Algonquin, #304 Rolling Meadows, IL 60008

Phone 847.222.9402 Fax 847.222.9437 E-mail sdaniels@amba.org Website www.amba.org

22 AMBAwww.amba.org

AMBA NewsAMBA News

2011 Annual Convention – “Accelerate your Profitability”March 2-6, 2011, Las Vegas, NVSee Convention Preview on page 12! o

Nominate the 2011 Mold Builder of the Year!Nominations are now being accepted! The AMBA Mold Builder of the Year Award was instituted to recognize outstanding contributions made by an AMBA member. The recipient of this prestigious award will be an outstanding business leader, dedicated to the industry, and an active member of the AMBA. If you believe, and you are very proud that you have built a good solid business: a company that is doing positive things in the industry...we encourage you to nominate yourself! Do you work hard toward business growth? Try to find new ways to be competitive? That’s what it takes to be the Mold Builder of the Year! Tell us about it and why you believe you deserve to be the award winner. Previous Mold Builder of the Year Award recipients are:• 2010 Andy Baker, Byrne Tool• 2009 Bill Mach, Mach Mold• 2008 Pete Manship, Mold Craft• 2007 Jim Florian, QME, Inc. - Quality Mold & Engineering• 2006 Roger Klouda, M.S.I.Mold Builders• 2005 Bill Kushmaul, Tech Mold• 2004 Donna Pursell, Prestige Mold• 2003 Olav Bradley, PM Mold Company

The 2011 AMBA Mold Builder of the Year Award recipient will be announced during the Annual Convention in Las Vegas, Nevada, March 2-6, 2011 at the Red Rock Hotel & Spa. Announcement of the award recipient will be made to local newspapers, national industry publications, AMBA’s publication, and posted on the AMBA website. This years award recipient will also choose the industry-related

educational program that will receive a $5,000 Progressive Components scholarship grant. Contact the AMBA National office at 847-222-9402 or sdaniels@amba.org for more information on the Mold Builder of the Year Award. See the nomination form included on page 18 in this issue of The American Mold Builder. o

Nominate the 2011 AMBA Chapter of the Year!The AMBA Chapter of the Year Award was established to recognize those chapters that have made outstanding contributions to the moldmaking industry. AMBA chapters may nominate themselves or be nominated by individuals outside the chapter. The award recipients will be the chapter as a whole. If you believe that a particular AMBA chapter is doing positive things in the industry...we encourage you to nominate them! Does the chapter work toward implementing or maintaining apprenticeship programs? Or does your chapter work to promote moldmaking in your state and nationally? Those are some of the things that we’re looking for from the Chapter of the Year! Tell us about it and why you believe your chapter deserves to be the award winner. The 2011 AMBA Chapter of the Year Award will be presented during the Annual Convention in Las Vegas, Nevada, March 2-6, 2011 at the Red Rock Hotel & Spa. Announcement of the winning chapter will be made to local newspapers, national industry publications, AMBA’s publication, and posted on the AMBA website. A representative from the winning chapter is highly encouraged to attend the convention. The Chapter of the Year award winner will not only be presented with the prestigious traveling Chapter of the Year Award, but the winning chapter will also choose the industry-related educational program that will receive a $5,000 Progressive Components scholarship grant.

Contact the AMBA National office at 847-222-9402 or sdaniels@amba.org for more information on the Chapter of the Year Award. See the nomination form included on page 20 in this issue of The American Mold Builder. o

Nominations are Now Being Accepted for AMBA National Board of Directors

If you are interested in serving on the national board or wish to nominate another person, please contact the AMBA national office for a nomination form and return it to the AMBA by FRIDAY, DECEMBER 17, 2010. Board members serve for a three-year term, four board positions are available. Nominations received after this date will not

be accepted. All nomination applications received by the deadline will be submitted to the respective local chapter board for review. In the case of non-chapter members, nomination applications will be submitted to the chairperson of the Nominating Committee for review. Any nominee to be considered for the national board must receive chapter

www.amba.orgAMBA 23

board approval, or in the case of non-chapter members, approval by the Nominating Committee. The Nominating Committee will also have the responsibility of preparing the slate of directors and presenting it to the general membership via fax or email for a ballot vote not less than 21 days prior to the date of the annual meeting. The newly elected national board of directors will be announced during the annual business meeting to be held at the Red Rock Hotel & Spa in Las Vegas, Nevada, March 4, 2011. Full convention dates are March 2-6, 2011. o

AMBA Exhibits at Tooling MiniTech 2010

On October 19th, the AMBA exhibited at the Milwaukee SPE and SPE Moldmaking & Mold Design Division Tooling MiniTech 2010. It was a one day seminar event with 9 of today’s industry leaders presenting technical overviews critically integrating your company’s needs with those of today’s ever changing mold making technologies. o

Webinar Archives Available

“Calculating Your Shop Rate” Webinar - Archive If you missed the AMBA presentation of: “Calculating Your Shop Rate”, a recorded webinar archive copy is available for purchase. Megan Johnson, CPA, and Jeff Wilson, CPA, from the accounting firm HLB Tautges Redpath, Ltd., covered: *How do you calculate your company’s rate? *How to define and allocate direct/indirect overhead costs? *How to calculate your break even point? *How do you account for idle time or underutilization? In the current economy, it is crucial to understand all costs that go into making your product and allocate these costs appropriately. Often times, indirect costs are over looked and not factored into the total cost.

Dates To RememberAMBA EVENTS

AMBA ConventionMarch 2-6, 2011,Las Vegas, NVRed Rock Resort Spa and CasinoAMBA 2011 Annual Convention Combines Top-Notch Speakers with NASCAR. Register now for the AMBA Annual Convention, March 2-6 at the Red Rock Resort and Spa in Las Vegas, NV . The theme, “Accelerate Your Profitability,” promises to bring the best presentations in the areas of business performance, cutting-edge technology and best practices. The AMBA Annual Convention has a long history of being a great event where moldmakers get together, network, have fun and learn about new technology and best business practices to help you succeed. If you’ve never been to an AMBA Convention before, this is the one you want to attend! Register online at www.amba.org.

INDUSTRY EVENTSEuroMoldDecember 1 - 4 - Frankfurt, GermanyThe 17th EuroMold, the world-wide leading trade fair for Moldmaking and Tooling, Design and Application Development will take place Dec. 1 - 4, 2010. As the international meeting point of the industrial sector, it presents products and services, technology and impulses for tomorrow’s markets.

Plastics News Executive Forum 2011

March 6 - 9 - Summerlin, NevadaFor more information, please visit the forum website.

massPLASTICS 2011March 15-16 - Fitchburg, MassachusettsThe massPLASTICS Trade Show attracts more than two hundred companies and more than four thousand professionals for two days of discussion, exhibits and seminars on manfacturing, new technologies and innovative applications for the plastics industry.

A two-day event, the massPLASTICS Trade Show is the Northeast’s largest tradeshow for the industry, providing a forum and exhibit space for companies in the plastics and related industries.

24 AMBAwww.amba.org

Mold Lien Laws - recorded 1/27/09, Presenter: David Lefere of Bolhouse, Vander Hulst, Risko, Baar & Lefere

Marketing Your Mold Shop - recorded 11/17/08, Presenter: Kae Groshong Wagner of North Star Marketing

To order any of these archived webinars, email Sue Daniels at sdaniels@amba.org or call 847-222-9402. Archive fee: $25 for AMBA members, and $45 for non-members. o

AMBA Executive Director Initiates Career ChangeMelissa Millhuff, the Executive Director of the American Mold BuildersAssociation resigned her position with this trade organization as of Friday, July 9. Millhuff announced her resignation to the AMBA Board of Directors, saying that she is relocating to Michigan after becoming engaged, and her husband‐to‐be is unable to relocate to Chicago dueto business commitments.

“Melissa was very proud of what the team of the AMBA accomplished during her tenure as executive director and wishes all the staff, members and partners the best of luck as the organization evolves,” says Mike Armbrust, President of the AMBA. “The Board of Directors would like to personally thank Melissa for all of her dedication and hard work. We appreciate her efforts and wish her the best in the future. I hope you join us in congratulating Melissa on her upcoming marriage and wishing her the best for the future.”

On September 14th, AMBA hosted the 2nd annual Night at the Ballpark event in conjunction with the IMTS trade show in Chicago.

Over 75 AMBA members, partners, associates and friends attended the evening game with the Chicago White Sox, who took on the Minnesota Twins at U.S. Cellular Field. A good time was had by all.

Round-trip bus transportation for all the participants was generously sponsored by:

This can lead to a shop rate that is too low and less profit on your jobs. They walked through sample Company financials breaking out direct and indirect costs as well as calculating the shop rate. They provided some ideas and tools to be able to apply this information to your own company. (Archive includes archived presentation, Powerpoint slides, and sample Excel spreadsheets to calculate your shop rate.)

“Federal Healthcare Changes” Webinar - Archive If you missed the 60-minute webinar presentation of: “How Will Federal Healthcare Changes Impact My Company?”, a recorded archive copy is available for purchase. Brian Whitlock, CPA, JD, LLM, a Tax Partner at Blackman Kallick explained how the current Federal healthcare changes will impact your company over the next few years as the full impact of the law phases in. Brian discussed not only 2010 and 2011 tax law changes, but he focused on the new Obama Health Care Law, including: the Small Business Tax Credit for Health Insurance; higher Medicare Taxes; Employer requirements to provide “Free choice Vouchers”; employer penalties for failure to provide “affordable” coverage; new information reporting requirements and 1099 reporting for payments to corporations. Other archived webinars available are:

What’s My Company Really Worth? - recorded 5/5/10, Presenter: Pat McNally, Blackman Kallick

What are Banks Looking for in Today’s Economy - recorded 8/12/09, Presenters : Pat McNally, Blackman Kallick and Michael Moran, American Chartered Bank

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AMBA Members Exhibit at the K Show

Two members of the American Mold Builders Association crossed the pond to attend the international plastics exhibition in Dusseldorf, Kunstoffe 2010, better known as the K show. This event, which takes place every three years, draws exhibitors and attendees from around the world, and consists of 18 buildings filled with the latest and greatest technology.

Moldmakers Inc., a business group of MGS Manufacturing Group (www.mgstech.com) headquartered in Germantown, WI, will be exhibiting at K for the fourth time. “We’ve attended the K show many times and have exhibited at the last three shows,” said John Berg, director of Marketing. “We found that the customers we have that have a global footprint appreciate seeing us at that particular venue because of its scope.”

Berg says that while it’s a large show, K provides mold exhibitors the opportunity to display the latest technology trends in injection mold building and equipment, molds, molding services and specialty equipment. MGS and its business units operate in 300,000 sf of manufacturing space, and also operates a molding facility in Chihuahua, Mexico.

“We find that existing customers like seeing us there as it elevates our status as a global supplier, and show them that we are addressing their global needs,” Berg says. “New customers – and we have attracted them over the years – are European-based companies which are expanding into NA and find it more cost-effective and time-effective to have a partner in the US with the breadth and depth of capabilities of MGS Manufacturing Group. We’ve been able to capitalize on the event to help meet their build and manufacturing needs, and become a one-stop-source for their engineering, design, mold building and production molding in North America.”

MGS highlighted its specialty equipment manufacturing by the company’s TecStar Universal Manufacturing division, as well as showcasing the multi-shot technology that MGS provides through its Multi-Shot Systems division.

Cavaform International LLC (www.cavaform.com) is a long-time K exhibitor, and finds K beneficial to its global business development. Cavaform specializes in multi-cavity molds for the medical market including molds for syringes, pipettes, needle shields, test tubes and other medical disposables.

Not only does Cavaform find leads from European customers, but leads from U.S. companies are plentiful too, says Dave Outlaw, Cavaform’s

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The Board of Directors has retained Harbour Results Inc., a strategic business planning and consulting firm, to step in as interim Executive Management of the AMBA, and help with strategic planning for the organization, an effort that began in early June. Starting July 12thLaurie Harbour and Gary Burns from Harbour Results began working with the staff of the AMBA to ensure that its accomplishments continue, new initiatives are implemented and business goes on as usual.

“We have put some very exciting new plans in place to grow the organization, create new programs, provide new value to members, get great speakers for our upcoming events and promote the AMBA brand,” says Armbrust. “We continue to remain focused and committed to the vision of the Association and these new plans will allow us to do much more for the members, customers, partners, suppliers, government and educational institutions so we truly make a difference.” o

26 AMBAwww.amba.org

marketing director. “That’s where everyone goes to see what’s new, so we’re trying to bring a variety of things to K this year including mold components for medical molds. We’re entering into the silicone market, making molds for those applications.”

Through a variety of partnerships, Cavaform has developed new hot runner technology as well as new technologies in mold polishing and conformal cooling.

Several AMBA Partner companies also attended, including: • Progressive Components• DME• INCOE

o

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Member News Pyramid Mold & Tool (Rancho Cucamonga, CA)Pyramid Mold & Tool, recently installed a new Mitsubishi EDM sinker cell complete with robotics to expand its badly needed capacity to meet customer demand. Tony May, Director of Business Development/Technical Sales, says that the company is evaluating its future needs at this point and looking at adding more machinery/work cells in the near future. “Our main objective right now is to automate, automate, automate,” says May. “The only way we can compete is to work more hours with machinery than people.”

The California chapter met on Tuesday, Oct. 19, and had one of its largest AMBA meetings ever, May reported. Just over 50 people attended the meeting to hear a presentation on Steel Selection and Heat Treating. “It’s exciting to see so much interest in our chapter,” May comments.

Tech Mold Inc. (Tempe, AZ) Tech Mold a leading mold manufacturer of high-volume production molds for the medical, pharmaceutical, packaging and consumer industries, just opened a White Room molding environment at its Gilbert, AZ, testing facility – Tech Mold East – to better facilitate the testing and qualification requirements for the many molds the company builds for customers in the markets Tech Mold serves. Tech Mold East was designed to provide customers with facilities in which to perform R&D on new products with developmental tooling, as well as validation of production molds. Tech Mold East’s facility has private meeting rooms and an inspection room in which customers can work. The White Room environment will initially house two all-electric presses: a 65-ton Krauss-Maffei hydraulic, and a 55-ton Arburg all-electric . “Tech Mold has always been attuned to its customers’ requirements throughout the entire process of product development. We offer support starting with initial product design, pilot tooling and multi-cavity ultra-precision high-volume production molds” stated Vince Lomax, Tech Mold’s Vice President. “We recognize that many of our customers operate in a high-volume manufacturing environment and at times do not have the resources to run product off of two or four cavity pilot molds for market testing, automation integration or product development, so to that end, we strive to provide a molding environment that is more compatible to meeting customers’ needs”. Additionally, Tech Mold Inc. received certification from one of its major medical OEM customers as a “Class C-3 Supplier,” which certifies Tech Mold to run production parts in addition to pre-production and validation.

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The White Room environment currently has two molding presses: a 65-ton Krauss-Maffei hydraulic press, and a high performance 55-ton Arburg all-electric. Tech Mold East currently has a total of six presses at the facility ranging from 40-440 tons. Tech Mold’s expertise includes building automated molding cells complete with robotics for molding projects that require a total solution. Tech Mold also has an R&D division that specializes in collaborative engineering for developmental prototype tooling, offering dimensionally correct parts in hand, while at the same time laying the groundwork of critical mold parameters and manufacturing information that translates easily into multi-cavity production molds. Tech Mold’s mold manufacturing expertise includes two-shot, multi-component, and multi-material molds; stack molds, and high-production hot runner molds to help OEMs optimize their manufacturing requirements. The company also works with premier molding machinery manufacturers and robotic providers to design and construct molding cells.

Industrial Molds (Rockford, IL)Industrial Molds has made it a practice to continually invest in the latest machine tool technology. The company has just completed installation of an Erowa Robot System (ERS-03000) heavy duty robot to add to the S-56 Makino machining center. The total investment was around $500,000 not counting the machining center which Industrial Molds had purchased a year ago. “We bought the S-56 Makino machine knowing that we would put a robot on it,” said Tim Peterson, vice president of Industrial Molds. “We put the new cell in a different location from the first two cells to accommodate the size of the robot, so we had to improve the floor and get the infrastructure in to support the cell.”

The company currently has machining centers in house. The latest one is for performing hard milling operations for mold cavities. According to Chris Norman, Chief Operations Officer for Erowa Technology Inc., this represents a change for Industrial Molds. “They hadn’t automated that part of the business yet, but after seeing the benefits of the two previous manufacturing cells, they wanted to automate the S-56 with the ERS,” said Norman.

The Erowa Robot System (ERS) has two rotary magazines for storage of three different types of tooling. The cell also contains UPC 12” square pallets and ITS-148 6” round pallets. The new cell also has the ability to perform graphite milling operations as a backup to Industrial Molds dedicated graphite mill.

Unattended operation is one of the biggest benefits to the automated manufacturing cells. “In today’s economy you’re competing with everyone globally, such as foreign suppliers who are working with cheaper labor,” Norman said. “By automating these operations, they can increase their efficiency by 50-70%, and greatly increase their spindle time. That’s one of the best benefits.”

Peterson concurred that the first two systems Industrial Molds installed proved to give the company increased productivity without having to add a second (night) shift. “With the lack of skilled labor in the moldmaking industry today, and the additional challenges of finding people willing to work second shift, automating this process helps us to maximize our investment in this equipment,” Peterson said.

Erowa’s Norman noted that these ERS systems are developed for the type of work that mold shops do - the one-off job shop environment. He added that Industrial Molds is also running Erowa’s management software called JMS Pro. “This allows them to put whatever they want in the magazine and the software can scan and know what jobs belong to what projects,” said Norman. “Therefore it makes the equipment more flexible for the job shop work that a moldmaker does, whether it’s one cavity or 32.”

With 20 UPC pallet capacity and 35 ITS-148 pallets, Industrial Molds can have 65 different jobs in the magazine at one time and all are

associated by the software. “It allows Industrial Molds to be flexible and respond quickly to customer’s needs,” Norman commented.

Peterson noted that Industrial Molds saw the benefits of automating manufacturing cells from the first two systems they installed. “It allows us to get greater coverage from the front to back of the day, as opposed to requiring a second shift, giving us greater productivity and efficiency” he said. “We’ve seen it on the EDM side and now on the hard milling side we hope to see similar results.”

The new automated manufacturing cell is up and running at a phase one level as Industrial Molds goes through the learning curve and gets the cell running at its full capability. “We’ve run some production jobs through, and we’re happy with the results. We look forward to getting the system into full swing in the next few weeks.”

Craftsman Tool (Aurora, IL) Craftsman Tool & Mold has five CNC Gundrills in-house available. They run 18 hours a day for fast turn around and capacity is not an issue. Craftsman’s standard hole sizes are from .062” up to 2”diameter. Holes from .437” to 2” can be drilled 80” from one side. In addition, their gundrilling machines have a work holding capacity of 40,000 pounds. They offer table dimensions up to 55 inches by 96 inches, with table travel 48 inches vertical by 96 inches horizontal.Services provided on machines:

• Drilling

• Tapping

• Counterbores

• Chamfers

• Clamp Slots

New equipment:Craftsman is excited about their recently purchased Taurus gundrill! Featuring a heavy duty multi-spindle and 4-axis traveling column

• Table load capacity is 60,000 lbs

• Drilling spindle speeds of 0-3400 rpm

• Extra heavy duty milling spindle 0-2000 rpm

• CAT 50 Tooling

• STS Drilling system (Single Tube system)

• Angled lines NO PROBLEM

NOTE: the STS system drill removes chips through an internal tube, eliminating all the problems of chip binding and jamming which often occur with conventional deep hole drills. With the STS drill, operators can increase feed up to 8 ipm for standard cooling holes. As a result, they cut part cycle time by up to 50%! Mold-Tech, (Albertville, MN) Mold-Tech Inc has added mold sampling equipment to its manufacturing plant in Albertville, MN. The purchase of a new Toshiba 110 all-electric molding machine allows molds to be fully tested and validated before shipment. The implementation of this new press coupled with RJGsm eDART™ Process Monitoring, Control, and Analysis Systems, strengthens Mold-Tech’s strategy of being a full-service provider, and not simply a mold builder. In addition to providing more control in manufacturing, the press shortens mold qualification times and decreases transportation costs. Mold sampling is one more benefit on a long list of advantages customers find when working with Mold-Tech Inc, such as dedicated project management, extensive technical and engineering expertise, and an ISO 9001 certified tool shop. o

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Welcome New Member

Vista Technologies (Vadnais Heights, MN)The AMBA would like to welcome new member company Vista Technologies, based in Vadnais Heights, MN. VistaTek, as the company is known, designs, programs, and builds complex molds in-house, and also has injection molding capabilities. The company also is a service bureau for additive manufacturing (AM) and provides rapid prototyping and rapid tooling using Polyjet, Fuse Deposition Modeling, Stereolithography and Selected Laser Sintering.

Dan Mishek, the oldest son of VistaTek founders Jim and Lorinda Mishek, recently took the reins of the company as managing director. Their daughter Jennifer Sutherland retains her position as director of operations, and youngest son Allen Mishek leads the marketing department. The company has 26 employees and operates in a 15,000-square-foot facilty.

AMBA was privileged to have Jim Mishek make a presentation on additive manufacturing to the AMBA several years ago. We are pleased to welcome Vista Technologies into the AMBA.

Visit VistaTek’s website at www.vistatek.com o

Chapter Spotlight – Chicago ChapterThe Chicago chapter of the American Mold Builders Association is the first and original chapter of the organization, and has a lot of history. That said, the Chicago chapter continues to be the largest chapter and participation is high. With a new President and new Board of Directors, the Chicago chapter continues to provide interesting meetings for its members, and has lots of news to report.

The new chapter President, Wayne Sikorcin of Craftsman Tool & Mold, said “We’ve had several meetings, including the August meeting where U.S. Congressman Don Manzullo spoke. We got great attendance response from our members.”

Wayne’s presidency follows that of Mike Armbrust, who now serves at AMBA National President, and remains a chapter Director. “Mike Armbrust served way over his time and I’ve got some great shoes to fill,” said Sikorcin. “He’s a great leader in this industry and we’re lucky to have him in Chicago.

Serving with Mike as a chapter Director:• Alan Petrucci (BA Die Mold, Inc.), • David Plocinski (Tri-Par Die and Mold Corp.), and • Alan Szymanski (Do-Rite Die & Engineering).

The new Board of Directors serving with Wayne Sikorcin are:• Francine Petrucci, Chapter Vice President (BA Die Mold); • Mike Walter, Chapter Treasurer (MET Plastics); and • Matthew Thurow, Chapter Secretary (Alpha Star Tool and Mold

Inc.).

Karen Norville, the Chicago chapter coordinator, reported that U.S. Congressman Don Manzullo, of the Illinois 16th District is “very pro manufacturing” and gave the attendees at the August meeting a lot of good ideas on how to keep manufacturing at the forefront of both Federal and state Senators and Representatives. “His best suggestion was to have them visit your plant and meet your employees,” said Norville. “Currently we’re in the process of sending all the contact information of all the Senators and Representatives – both state and Federal, to our members so they can contact them for plant visits. He also suggested that if you’re in an industrial park then get your neighbor companies to open their plants too. That was a great opportunity for us.”

For November, the Chicago chapter planned a healthcare meeting to look at the changes, in particular with the Flexible Spending Accounts (FSA) and the Health Savings Accounts (HSA) to help members understand what those changes will do to their current healthcare plans.

The Chicago chapter wanted to provide an industry specific scholarship award, so they are sponsoring the “Mold Your Career” scholarship that will give a $1,000 gift certificate to the deserving apprentice at a Chicago chapter member shop. The recipient can be working in any area of the shop from mold design to programming, or CNC machinist. The only criteria are that the apprentice must have been with the company a year and receives a recommendation from his or her superior. “Tools are very expensive to buy so we feel that this will help someone who is actually in the trade,” said Norville. “We hope to eventually get a sponsor for this award, but we’re underwriting this scholarship ourselves the first year as a way to focus on getting apprentices interested in moldmaking.”

Norville said that the chapter is getting a few new members, and more are participating in the meetings. The chapter puts out a quarterly newsletter to its members, and currently, the Chicago chapter has about 40 members. “It’s a great chapter, we’re very active and we try to address issues that impact our businesses in our quarterly newsletter and keep the members participating,” she said. o

Wayne Sikorcin, AMBA Chicago Chapter president and owner of Craftsman Tool in Aurora, IL

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By: Jill Finley, West Michigan Chapter Coordinator

On August 27, Quail Ridge Golf Course in Ada, MI hosted the West Michigan Chapter of the AMBA’s 3rd Annual Golf Outing. Sunny skies, no wind, and warm weather definitely made this an enjoyable day for all.

It definitely would have been the icing on the cake if someone had taken home the $10,000 cash prize or the two year lease on a new vehicle for a hole in one, but I think it is safe to say everyone had fun trying to win!

Although our scholarship recipients are the ultimate winners, we would like to extend our congratulations to David Lefere and his winning team from the law offices of Bolhouse, Vander Hulst, Risko, Baar & Lefere, P.C. In all, we had 73 golfers in attendance and raised just over $8,000. A big thank you to all of the vendors, members, guests, hole sponsors and donors that helped make this event a success. If you weren’t able to participate in this year’s outing, please pencil us in for next year. It is never too early to start planning!

West Michigan 3rd Annual Chapter Golf Outing

30 AMBAwww.amba.org

U.S. Congressman

Speaks at AMBA Chapter Meeting

U.S. Congressman Don Manzullo of Illinois 16th District, and one of the head advocates for

manufacturers in the U.S. Congress spoke about his mission to strengthen manufacturing in the U.S.

Congressman Manzullo and his wife, Freda spoke to the Chicago Chapter on August 17, and listened to their questions and concerns about manufacturing

and their businesses.

www.amba.orgAMBA 31

Chapter News

CaliforniaThe chapter held general membership meeting on July 27th. There was a good turnout at the meeting and they welcomed speaker Mike Bastian of Accurate Steel Treating. He spoke to the group on dealing with some of the more common issues associated with heat treating. Progressive Components sponsored the cocktail hour, and we would like to thank them for their support. After dinner, the national and chapter scholarship winners were recognized.

The chapter held another meeting on October 19th, and it turned out to be one of the most well attended California chapter meetings that have ever been held with over 40 people in attendance. Speaker John Merlino of Bohler Uddeholm spoke to the attendees on mold material selections and moldmaking concerns. This meeting also attracted some attendees that are very interested in joining the AMBA and we look forward to including their information in our next publication!

Chicago

The chapter hosted a general membership meeting on August 17, with local U.S. Congressman Don Manzullo as the speaker for the meeting. Rep. Manzullo earned the reputation as Congress’ champion of manufacturing and a fierce advocate for job creation. The meeting had 55 people in attendance and Congressman Manzullo had some good suggestions for the members—mainly to invite your congressperson to your facility. He also said that attending the AMBA Fall Conference is great way to network and get familiarized with the statutes, etc, the affect the manufacturing industry.

The chapter also met on November 11 with speaker Rebecca Dobbs. The group heard a presentation called “Health Care Reform Act – How Does it Affect Your Company?” The group had a cocktail party that was sponsored by Sodick.

The Chicago chapter has also just announced its 1st Annual “Mold Your Career” Apprentice Award. They are currently taking applications postmarked by December 17th for a $1000 gift card. Contact Karen Norville at (708)227-0373 or karennorville@comcast.net for more information.

U.S. Congressman Don Manzullo speaks to AMBA Chicago Chapter

Minnesota The chapter held its 15th Annual Chapter Golf Outing at Oak Glen Golf Course. As always, this is a huge draw for the chapter and there were more than 100 golfers joining us on what was a

beautiful day. The outing was very fortunate to have numerous sponsors at the event. The money received from the golf outing is used for scholarships. After the tournament ended, dinner was served for all participants. A raffle was held and enough prizes

were given out that almost everyone went home with something.

Southwest Michigan The Southwestern Michigan chapter Board of Directors met on both August 26th, and again on September 16th. The next general membership meeting will be in early December (final date TBA) with speaker Harry Moser on “Insourcing”.

West Michigan The chapter held their 3rd Annual Golf Outing on August 27th. (See the full page on the West Michigan Chapter Golf Outing in this issue.) It was a beautiful day with a cool start and plenty of sunshine. There were 73 golfers in attendance representing 10 member companies, seven partner companies and 10 vendor companies. There were also “Hole’ sponsorship from four members, eight partner and eight vendor companies.

The chapter members were amazed at how the community came together for such a good cause. The members and vendors stepped up and came out to support the AMBA chapter scholarship fund and ultimately the employees of the chapter member shops. They raised over $8,000 towards the chapter scholarship fund! The chapter wants to thanks personally every one who helped make it a great event.

A general membership dinner meeting was held on November 9th. Speaker Gary Rolls, presented on Risk Management, and current Insurance issues.

WisconsinThe chapter hosted a joint baseball outing on August 24th with the TDMAW, and the NTMA. Members from all the groups were in attendance to watch the Milwaukee Brewers vs. the L.A. Dodgers. The event was hosted from the Dew Deck, which included tickets to the event, drinks and a great buffet. There was a total of about 50 people at the event and we had a beautiful night to watch an exciting game of baseball! o

Establish Yourself as an Industry Expert

Author an article or submit an idea for an article for The American Mold Builder publication. Send your article(s) or idea(s) to Sue Daniels at sdaniels@amba.org. Don’t worry about grammar and punctuation; the staff at AMBA will help! We will review your submission for consideration in an upcoming issue.

Jim Sperber, of AMBA member company Master Tool & Mold with Joanne Murphy.

32 AMBAwww.amba.org

AMBA Partner Spotlight - Welcome New Partner

The American Mold Builders Association welcomes Partner Member Dynamic Metal Treating in Canton, MI. Dynamic Metal Treating has been serving the mold manufacturing industry for over 25 years with its DYNA-BLUE process to increase tool life, reduce sticking, wear and corrosion, adding value to the mold customer and increased market share to the mold builder.

Loren Epler opened the company in 1984, and today has 26 employees. He has 25 years experience as a tool steel and high-speed steel metallurgist. He developed the DYNA-BLUE process in 1984 and holds two patents on that process.

Visit Dynamic Metal Treating at www.dynablue.com

We welcome Loren and Dynamic Metal Treating to the AMBA! o

This year, three $1,000 scholarships were awarded to the following students:• Jason McNulty: University of Wisconsin – Stout• Kevin Backoefer: Penn State Erie, the Behrend College• Amanda Zapatka: University of Massachusetts – Lowell

To qualify for the scholarship, students must be enrolled in a plastics program at any accredited trade school or university with a 2-year certificate, 2-year associate or 4-year bachelor’s degree program. Applicants who were enrolled in related coursework were also considered if they demonstrated a strong academic emphasis and interest in plastics.

Along with an application, students were required to submit a transcript, personal statement and recommendations for review. DME’s selection committee considered a variety of factors including academic achievement, interest in the field and personal qualities to determine the winners.

DME and other major manufacturers have noticed a trend that students are shying away from manufacturing disciplines. With an aging population of skilled workers, the plastics industry is facing a major human resources challenge.

The scholarship program is just one of the ways DME is taking action to attract new minds to the industry.

The company also offers grants and scholarships to its customers for continuing education - an extension of the popular DME Plastics University on www.dme.net that was created to aid new plastics industry students and professionals.

DME scholarship applications for the spring 2011 semester are available online at www.dme.net/dme/resources/education.html and will be accepted until December 1, 2010.

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Inconel: Turbine Engines, Rocket & Space Applications, Chemical Industry Parts Titanium: Prototype and Production Parts of Lightweight Material o

Partner News

DME Announces Winners of 2010 Student ScholarshipsDME Company, a leading manufacturer of mold technologies, recently announced the three winners of its 2010 student scholarships.

Each year, DME offers this scholarship program to help finance, encourage and support the future of qualified students who have interest and potential in moldmaking, plastics and related career fields.

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Health Care Reform Advisory – Grandfathered PlansOne of the most frequently asked health care reform questions we get is the definition of ‘grandfathered’ plans.

Simply put, a grandfathered health plan is one that was in existence before March 23, 2010. Grandfathered plans can make routine changes to their policies and maintain their status. A routine change would include making modest adjustments to existing benefits. If significant plan changes are made, however, plans will lose their grandfathered status. Changes that reduce benefits or increase costs to consumers would be considered significant. To remain grandfathered, plans cannot:

1.Significantly cut/reduce benefits or lower employer contributions.

2.Raise co-insurance rates.

3.Significantly raise deductibles or co-payment charges.

4.Add or tighten annual limits on what the insurer pays.

5.Change insurance companies.

If your plan does lose its grandfathered status, most of the required changes rest on the insurance carrier’s shoulders (e.g. dependent coverage to age 26, 100% coverage of preventative care, no increased cost sharing for out-of-network ER services, choosing any primary-care physician, mandatory appeals process, etc.). However, as a business owner, one required change when losing grandfathered status may warrant a closer look - the non-discrimination rules of the IRS. These rules require that a non-grandfathered plan not discriminate in favor of ‘highly compensated individuals’ with regard to both contributions and benefits. (Non-discrimination goes into effect starting with the plan years beginning September 23, 2010.)

It’s important to step back and evaluate the relative benefits of a grandfathered vs. non-grandfathered plan. Questions? Be sure to call your insurance professional. o

Delay in W-2 ReportingOn October 12, 2010, the Internal Revenue Service (IRS) issued Notice 2010-69, stating the W-2 reporting of the cost of employees’ health coverage will be voluntary, rather than mandatory, for 2011.

Without the relief granted in the notice, the Patient Protection and Affordable Care Act would have required employers to report the aggregate cost of health coverage on employees’ W-2 forms for 2011.

Although the IRS expects to issue guidance on the reporting requirements before the end of this year, it recognized that employers may need additional time to modify their payroll systems to comply with the new reporting requirement. As a result of the relief provided in this notice, employers will not face a penalty if they do not report the cost of employer-provided health coverage on employees’ W-2s for 2011. o

Workplace WellnessThere is plenty of research stressing the importance of helping your employees get into shape, eat right, exercise and stop smoking. But it is

equally important not to forget about supporting and encouraging those employees who already lead a healthy lifestyle.

Here are some ways to help ensure your healthy employees remain that way:

• Establish a smoke-free environment in and around your company’s facility.

• Create an environment that promotes physical activity throughout the workday.

a) Promote the use of nearby walking or biking trails during lunchtime.

• Offer healthy food in the workplace to promote more health-conscious employees.

a) Offer healthy food options in vending machines and provide healthy foods during work-sponsored events.

• Make modifications and upgrades to your employee’s workstations to create a more ergonomic environment.

a) Conduct workstation assessments - including placement of the computer monitor, keyboard and mouse, quality of lighting and chair mechanics.

• Create an environment that reduces your employees’ stress.

a) Establish clear expectations for your employees regarding what their roles are within the company.

b) Provide employees with the necessary tools to get their jobs done easily and effectively.

• Stress safety when driving on company business to avoid traffic-related accidents, one of the leading causes of death among workers.

a) Implement a policy requiring employees to wear their seat belts, especially when driving on company time and in a company-owned vehicle.

• Enforce emergency procedures within your facility.

a) Provide detailed information about these procedures to your employees.

Taken from the Summer 2010 issue of the Gibson Insurance Benefits Briefing Newsletter. o

Don’t Wait To Vaccinate!The flu season is fast approaching. Are you ready? Is your workforce ready? The flu is a contagious respiratory illness that can cause mild to severe illness, and can lead to death. The best way to prevent the flu is by getting an annual flu vaccine. In addition, frequent hand washing is an important precaution in preventing the spread of the flu. Symptoms of the flu include some or all of the following symptoms:

• fever or feeling feverish/chills

• cough

• sore throat

• runny or stuffy nose

• muscle or body aches

• headache

• fatigue

• some people may experience vomiting and diarrhea, although this is more common in children than adults

Manufacturers of vaccine for the 2010-2011 flu season have already begun shipping their flu shots and nasal sprays. The vaccine is typically a three component vaccine; each component is selected to protect against one of the three groups of influenza viruses most

34 AMBAwww.amba.org

prevalent among humans. This year, the vaccine will include the much publicized H1N1 strain, commonly referred to as swine flu, requiring only one dose for most individuals. For the first time, the Centers for Disease Control (CDC) is recommending that everyone six months and older should get a seasonal flu vaccine. The CDC is also suggesting if vaccine is available earlier, as it is anticipated to be, people shouldn’t wait to get vaccinated. The vaccine is effective for 6-8 months, which would last throughout the peak of flu season. For more information on influenza, visit the CDC web site at www.cdc.gov/flu/keyfacts.htm. 

Taken from the Summer 2010 issue of the Gibson Insurance Benefits Briefing Newsletter. o

Misclassification of Independent ContractorsOne consequence of the Great Recession is more and more businesses have begun to rely on the use of independent contractors as opposed to full-time employees. The financial benefits of using independent contractors are substantial and include the savings from employee benefits, payroll taxes, and other employment expenses. This resulting loss of tax revenue has not been overlooked by the federal government, in particular the Department of Labor (DOL) and the Internal Revenue Service. The Misclassification Initiative by the DOL is targeting construction, manufacturing, restaurants and home healthcare in an effort to recoup unpaid payroll taxes. There is even a pilot program that would reward the most successful states that detect and prosecute employers that fail to pay appropriate taxes. At the same time, the IRS is also randomly selecting individual companies over the next three years to perform audits to target worker misclassifications. There are obvious potential liabilities for penalties, taxes, and interest. As a result, we suggest you review your classification of independent contractors with your attorney and CPA.

Keep in mind that utilizing independent contractors has impact on your workers’ compensation insurance. The IRS and the workers’ compensation system use different tests to determine employment versus independent contractor status. Be sure to discuss this with your business insurance advisor.

Taken from the Summer 2010 issue of the Gibson InsuranceUpdate Newsletter. o

Healthcare Reform - The Impact On Workers’ CompensationAlthough still quite early, most agree the impact on workers’ compensation of Healthcare Reform could be significant with both positive and negative effects on an industry that represents less than 2% of medical spending. Negatively, most agree that hospital and facility expenses are likely to go up partially because reimbursements from government programs will go down. According to some estimates, workers’ compensation only makes up about 2% of hospital revenues but provides 16% of the profit margin. Prescription drug prices will likely go up as well. With the likely increase in demand for services, there could be delays in both treatment and processing of workers’ compensation claims. On the positive side, Healthcare Reform should lead to less cost shifting to workers’ compensation since more people will be covered by health

insurance. The increased use of electronic medical records should certainly improve the efficiency of treating workers who have been injured. And with the increased attention to wellness, the hope is this will lead to a healthier workforce. Stay tuned for more on this as the long-term effects unfold.

Taken from the Summer 2010 issue of the Gibson InsuranceUpdate Newsletter. o

Human ResourcesHuman ResourcesBy: Karla Dobbeck, PHR, Human resource techniques, Inc.

Final Rules Issued for I-9 FormsFor those of you who store your I-9 forms electronically, these new guidelines will help to clarify your responsibilities and provide answers. The final rule took effect August 23, 2010.

The final rule:

• Permits employer to complete, sign, scan and store the I-9 form electronically.

• Clarifies the three day rule. Employers must complete their portion of the I-9 Form within three business days (not calendar days).

• May use paper, electronic systems or combination of both for storage.

• May change electronic storage systems as long as the systems meet the performance requirement of the regulation.

• Need not retain an audit trail for employee viewing, only for time of creation, changes and updates.

• May provide a confirmation of viewing to employee but only required to provide one if the employee requests it.

• Employers may, but are not required to, keep copies of the ancillary documents used to complete the employer portion of the form. If kept, must be kept consistently for all employees.

• Only the portion of the I-9 form that the employee and employer complete needs to be retained. (not the instruction pages)

• Nothing in the electronic clarification removes the employer’s responsibility to physically examine the documents presented by the employee for identity and eligibility for employment.

Even today, almost 25 years after the law requiring I-9 forms, I still find companies who are unaware of this requirement. I-9 forms must be completed by every new employee and employer, regardless of company size. Forms are free. o

Contracting with a Temporary AgencyContracting with a temporary agency may be a great way to decrease your obligations and control costs. Agencies typically charge between 130% - 170% of the hourly wage to cover the costs of mandatory benefits and for their profit margin. In return, you will have fewer additional obligations. As with any contracting arrangement, you should be specific about your needs.

www.amba.orgAMBA 35

Decide whether the assignment is truly temporary or if you might wish to hire the individual in the future. Most temporary agencies offer temp-to-hire arrangements and you will be able to place the worker on your payroll after he/she has worked a minimum number of hours. Utilizing the temp-to-perm arrangement is very helpful as a trial employment period. You can try out the employee for a number of months before deciding whether or not to ‘buy’. If hiring is a possibility, ask the service to verify employment eligibility through either the social security administration or through immigration. Ensuring employment eligibility is easily done over the phone or by fax. Also, consider skill assessments for competencies you need such as math, attention to detail, reading, inspecting, analysis, filing, etc. Skill assessments are available at a minimal cost from companies such as G.Neil or Wonderlic. o

Agency & Employer – A Dual RelationshipWhen using a temporary agency, please remember that just because you are not the ‘employer’, you still have legal responsibilities. If the temporary worker claims harassment or discrimination, both you and the temporary agency may be held liable. In fact, most labor laws cover temporary employees and a good lawyer will sue both the agency and the assigned employer.

A good rule of thumb is to ensure that the temporary employee goes through a short orientation so that he/she understands your policies regarding harassment, discrimination and safety. Consider giving your policies and job descriptions to the temp service so that the temporary worker can review them before the assignment begins. Also ask that the service provide proof that your policies and descriptions were reviewed.

Unless specifically stated in the contract, workers’ compensation costs may fall to you. If there is any change in the job responsibilities

or assignments you may also be found liable for workplace injuries so always remember to contact the agency if the assignment or job responsibilities change. Doing so may incur an increase in wages but the payoff is decreased liability and more protection for you.

Lastly, if you require audiometric testing, drug testing or pre-employment physicals, please require them for your temporary workers as well. You will be assured the temp has the ability to do the work and is not impaired. o

Tax & BusinessTax & Business2011 HSA LimitationsHealth Savings Accounts (HSAs) were created as a tax-favored framework to provide health care benefits. HSAs are targeted mainly at the self-employed, small business owners, and employees of small to medium-sized companies who do not have access to health insurance.

The tax benefits of HSAs are quite favorable and substantial. Eligible individuals can make tax deductible (as an adjustment to AGI) contributions into HSA accounts. The funds in the account may be invested (somewhat like an IRA), so there is an opportunity for growth. The earnings inside the HSA are free from federal income tax, and funds withdrawn to pay eligible health care costs are tax-free. The dual benefit of tax-deductible contributions into and tax-free withdrawals from HSAs (and existing Medical Savings Accounts) is truly unique. No other tax-deferred type of account currently exists that offers such a benefit.

36 AMBAwww.amba.org

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The annual 2011 inflation-adjusted deduction for individual self-only coverage under a high-deductible plan is $3,050, unchanged from 2010. The comparable amount for family coverage is $6,150, also unchanged from 2010. For 2011, a high-deductible health plan is defined as a health plan with an annual deductible that is not less than $1,200 for self-coverage and $2,400 for family coverage, and the annual out-of-pocket expenses (including deductibles and copayments, but not premiums) must not exceed $5,950 for self-only coverage, or $11,900 for family coverage.

Taken from the September 2010 issue of the Tax & Business Alert. o

Small Business Jobs Act: A Windfall for Small to Mid-sized ManufacturersBy: Mark Lauber and Karim Solanji

With a resounding and somewhat historic move, Congress passed and, the President signed into law the Small Business Jobs Act (SBJA). The SBJA provides much needed tax relief for small and medium sized businesses for 2010. Of particular and significant note are two provisions: the modification to a five year credit carryback and the modification of the Alternative Minimum Tax (AMT) in relation to general business credits.

Five year carryback on unused general business creditsPreviously, the carryback and carryforward rules for general business credits stated, generally, that unused credits were to be carried back only one year and, if unused in that year, then carried forward up to twenty years. The previous rules did not provide the immediate tax relief many taxpayers badly needed.

With the SBJA, taxpayers will be able to carry back unused credits generated in 2010 a total of five years before having to carry them forward. This change will allow many taxpayers who have been hit recently by the economy to still receive an immediate tax benefit, even if they are unprofitable in 2010.

General business credits not subject to AMTPrior to the SBJA, general business credits generated by a taxpayer were subject to the AMT. This credit subjugation to the AMT drastically limited or completely eliminated the benefit of the general business credit to many taxpayers. With the passage of the SBJA by Congress, many small to medium sized businesses will not have this AMT limitation applied to general business credits generated in 2010.

Congress has defined the businesses that can take advantage of this AMT change as being sole proprietorships, partnerships, and non-publicly traded corporations with $50 million or less in average annual gross receipts for the prior three years.

With more than 20 million Americans paying AMT, the ability for business owners to reduce their taxable liability through a slew of general business credits, including, the R&D Tax Credit, is especially significant.

Immediate tax reliefThese two provisions will provide the immediate tax relief needed by many small to medium sized businesses to help them succeed in today’s economy. It is noteworthy that these provisions will apply to the Research and Development Tax Credit when it is passed later this year, thereby allowing many taxpayers to take advantage of this credit that previously were unable to due to a lack of utilization.

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The positive effect on the R&D tax creditDue to the economy the last few years, many manufacturers have been unable to take advantage of the R&D Tax Credit. The main reason being that the taxpayers for these companies were subject to AMT.

Now with the SBJA, the R&D Tax Credit can reduce a taxpayer’s tax liability, regardless of AMT, thereby opening up the R&D Tax Credit to most of these taxpayers.

Even for smaller manufacturers, the R&D Tax Credit can be significant. Here are some examples:

Example 1 – Four Year StudyAnnual Payroll: $1.7 MMTotal Credit: $80,000

Example 2 – One Year StudyAnnual Payroll: $6.5 MMTotal Credit: $50,000

Example 3 – Four Year StudyAnnual Payroll: $1 MMTotal Credit: $60,000

Example 4 – One Year StudyAnnual Payroll: $3.5 MMTotal Credit: $60,000

RecommendationContact a consulting firm specializing in the R&D tax Credit. The firm will have the knowledge to help determine if your company can take advantage of the Small Business Jobs Act as it relates to the R&D Tax Credit. If you can, it can result in a substantial reduction in your 2010 tax liability and a tax refund for previous tax years.

About the Authors:The authors are Karim Solanji, J.D., Director, and Mark Lauber, VP of Marketing, M.S. Industrial Engineering, both of Paradigm Partners. Paradigm Partners is a national tax consulting firm specializing in niche tax services such as the R&D Tax Credit, Sales and Use Tax, the IC-DISC (U.S. Exporters’ Tax Incentive), Hiring and Location Incentives, Section 179 and Cost Segregation. Mark’s email is MLauber@ParadigmLP.com and his phone number is (281) 558-7100 X-105. Our website is www.ParadigmLP.com. o

Business Owner’s Relatives May Qualify for New Payroll Tax BreaksThe Hiring Incentives to Restore Employment Act (the HIRE Act) includes two temporary payroll tax breaks intended to boost hiring. An interesting point about these breaks is that they could be claimed for a business owner’s newly hired spouse. They might also be claimed for wages paid to other newly hired relatives of a minority business owner (a person who owns 50% or less of the employer, after considering both direct and indirect ownership). The information below summarizes how the two tax breaks can apply for wages paid to spouses and other relatives of business owners.

Social Security Tax Exemption for Wages Paid to Eligible New Hires Wages paid by a private-sector business (large and small alike) to a qualified new employee between March 19, 2010 and December 31, 2010, are exempt from the 6.2% employer portion of the social security tax. The maximum amount of employer social security tax savings for

a high-paid employee is $6,622 (6.2% × $106,800 social security tax ceiling for 2010). However, the actual savings realized will be less for high-paid workers who are paid less than $106,800 between March 19, 2010 and year-end.

Qualified new employees are full-time or part-time workers who start work between February 4, 2010 and December 31, 2010, and who provide the employer with a signed IRS Form W-11, Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit, certifying that they were not employed more than 40 hours during the 60-day period ending on their start dates. However, the new worker cannot replace another worker unless that person quit voluntarily or was discharged for cause.

Employer Is a Sole Proprietor. When the employer is a sole proprietorship or a single-member LLC treated as a sole proprietorship for tax purposes, wages paid between the specified dates to the taxpayer’s (owner’s) newly hired spouse are eligible for the temporary social security tax exemption if the spouse meets the preceding definition of a qualified new employee. Wages paid to other newly hired relatives of the owner (including in-laws) generally will be ineligible.

Employer Is a Corporation. When the employer is a corporation, wages paid between the specified dates to a majority shareholder’s newly hired spouse are eligible for the temporary social security tax exemption if the spouse meets the definition of a qualified new employee. (A majority shareholder owns more than 50% of the employer, after considering both direct and indirect ownership.) Wages paid to other newly hired relatives of a majority share-holder (including in-laws) generally will be ineligible. However, wages paid either to a newly hired spouse or other relative of a minority shareholder are eligible if the new hire meets the definition of a qualified new employee and is not a relative of the majority owner.

Employer Is a Partnership. When the employer is a partnership (including a multimember LLC treated as a partnership for tax purposes), wages paid between the specified dates to a majority partner’s newly hired spouse are eligible for the temporary social security tax exemption if the spouse meets the definition of a qualified new employee. (A majority partner owns more than 50% of the employer, after considering both direct and indirect ownership.) Wages paid to other newly hired relatives of a majority partner (including in-laws) generally will be ineligible. However, wages paid to a newly hired spouse or other relative of a minority partner are eligible if the new hire meets the definition of a qualified new employee and is not a relative of the majority partner.

Tax Credit for Retaining Eligible New Hires In addition to the social security tax exemption, employers can also claim a new temporary tax credit of up to $1,000 for wages paid to each qualified new employee who is retained for at least 52 consecutive weeks. Wages paid during the second 26 weeks of the 52-week period must equal at least 80% of wages paid during the first 26 weeks of that period. The definition of a qualified new employee is the same as for the social security tax exemption.

The credit amount equals the lesser of 6.2% of wages paid during the 52-consecutive-week period, or $1,000. To claim the maximum $1,000 credit, the worker must be paid at least $16,130 during the 52-week period.

Here’s the important point: even if the new hire is a spouse or relative of a business owner and is eligible for the social security tax exemption, wages paid to that spouse or relative may also be eligible for the new employee retention credit. That’s because the definition of a qualified new employee is the same for both breaks.

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Time Is of the Essence If you have questions or want more information about the temporary social security tax exemption or the temporary new employee retention credit, please contact us. The eligibility rules in family business situations are complicated, and these breaks will soon expire. o

Business Insurance, The Forgotten AssetBy: Kevin W. La Mont, ChFC, President Advance Planning and Investments, The La Mont Group

It’s rare for a business or business owner not to have purchased life insurance at one time or another. Life insurance is often acquired to fund a buy/sell agreement, provide additional equity in the event of a key employee’s death, provide additional dollars to back up a business secession plan or just to provide the capital necessary to pay the estate taxes. All are good reasons to acquire life insurance and you’ll never know just how important life insurance is until you need it. Sometimes the insurance is owned by the business, other times it’s owned by the business owner. At times the insurance is term with no cash value and other times its cash value driven. What ever type of insurance you or your company may have, one thing is sure, there may come a time when the insurance you acquired yesterday is no longer needed today. Some of the reasons a person my no longer require their insurance may be the following:

• Under performing policies• Sale of business• Estate tax reform act• Need money for family-owned business to continue• Provide family members with much-needed capital in a weak

economy• Beneficiary predeceases insured

Until now, policy owners only had two options as to what to do with their unwanted policies. One option was to cash it in for its surrender value. The other option was to stop paying the premium in which case, the policy would lapse. Either way, the cost of the insurance was greater than the return.

There is now a third option available to those individuals who may have a policy they no longer need or want; it’s called a Life Settlement. A Life Settlement is the sale of a life insurance policy in exchange for cash in excess of the policy’s cash surrender value – even if none exist. This innovative wealth and estate planning tool removes the burden of expensive insurance premium payments in addition to providing lump sum payment. Life Settlements present a unique opportunity to extract the maximum value from an existing life insurance policy and repurpose those funds for whatever financial need may exist.

Who qualifies for a Life Settlement? Currently most funding groups focus on seniors over the age of 70, or insured’s with serious illnesses of any age. Policies of $100,000 or greater and cash value or term policies qualify.

Recent Cases: Male age 72 $4,000,000 Universal Life PolicyCash surrender $538,000Life Settlement amount $1,041,000

Male age 69$10,000,000 Term PolicyCash surrender $0Life Settlement amount $1,460,000

If a Life Settlement is right for you, only you can answer that question. But keep in mind, being a business owner you do have options and the choices you make today can have profound economic repercussions. So, before you allow your term policy to lapse or you decide you can no longer afford the premiums on your existing policy, check to see if a Life Settlement makes sense.

For more information contact Kevin W. La Mont, at phone: (949) 253-0480, (800) 824-3911 or email kwlplanner@yahoo.com o

Workplace Strategies: Keeping Up with OSHAThe Occupational Safety and Health Administration (OSHA) has been busy this year implementing new policies and aggressively stepping up enforcement against employers. However, by paying attention to a couple of OSHA’s current hot spots, employers can keep themselves out of OSHA’s sights. Recordkeeping OSHA has launched a recordkeeping National Emphasis Program intended to identify employers who are not properly maintaining their OSHA 300 injury and illness logs. OSHA is under the belief that employers are under reporting workplace injuries and illnesses resulting in artificially low injury rates. Consequently, compliance officers have been instructed to carefully review employer’s OSHA 300 logs, workers compensation runs, accident reports and other company records to identify errors and/or unreported injuries and enforce strict compliance with the regulations. (e.g. issue a separate violation and penalty for each error as opposed to a single citation and single penalty for inaccurate logs as a whole). Accordingly, employers should ensure that the person responsible for recordkeeping is properly trained. The OSHA 300 logs are not difficult to keep if the recordkeeper knows what he or she is doing. Unfortunately, too often OSHA recordkeeping is seen as a thankless task and delegated to an untrained employee or, by default, ends up being kept by the human resources department or an untrained “safety manager.” These individuals have never been trained in proper recordkeeping and often make very basic errors that can cost the company thousands of dollars during an inspection. We also highly recommend that the recordkeeper spend an hour reviewing the last three years of OSHA logs against workers compensation runs, accident reports and other company documents to make sure injuries and illnesses are being properly captured on the log. For example, if there were only 10 injuries reported on last year’s log, but there were 25 workers compensation cases, you should take a close look to make sure injuries and illnesses are not being missed. Correct all errors that are found and properly update the logs. Native language training OSHA cannot mandate that safety training be given in any specific language other than English. However, OSHA is concerned that employees for whom English is not their native tongue are being put at risk for accidents and injuries when all of their safety training is given in English. This is especially true for employers with a highly Hispanic workforce. Therefore, OSHA recently announced its Native Language Initiative, directing compliance officers to ensure that employees are receiving their written and oral safety training in a language they understand. Where OSHA finds that employees receive safety training in a language that is not the employee’s native tongue, the compliance officer may issue citations and penalties for failure to properly train the employees.

www.amba.orgAMBA 39

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Accordingly, employers should make sure safety training is being provided in a language that their employees understand. If some of your employees do not speak or read English, then make sure you are providing safety training in their native tongue. Likewise, if your supervisors are giving their crews daily work instructions in a language other than English (e.g. Spanish) you should consider making safety training available in that language as well as English. This also goes for written training documentation. Do not provide employees with safety manuals or have them sign training acknowledgments that they cannot read. Rather, have those documents translated into the relevant language that your workforce understands. Likewise, consider using bi-lingual trainers or offer training sessions given in each language to ensure that your employees will understand their training.

Taken from the August 3, 2010 issue of Seyfarth Shaw Management Alert. o

Succession Planning… Why So Many Family Business Owners Fear It and How to Calm Those FearsBy: Irving Blackman

The 32nd president (FDR) said in 1933, “Fear paralyzes those who succumb to it.” Some things are downright scary. Try taxes… especially estate taxes. Can you guess what area in estate tax planning causes the most anguish? … Hands down it’s business succession.

Most successful business owners started their business from scratch… many took over the business from their dad or other relative… some bought the business. Few came to be the owner in some other way. All share a common future (no exceptions): someday they will have to pass the management baton.

Whether the reason for stepping down is age, illness, a desire to travel or play more golf, give into your wife’s pleading to “spend more time with me,” or a host of other reasons, the fear factor is almost always a player.

Following are the six questions (yes, there are many more) that lead the unwelcome-fear-factor parade:1. How high will my income tax/capital gains taxes be if I sell to the

kids (or employees) now?2. If I don’t sell now, how much will the increasing value of the

business increase my estate tax liability?3. What if the kids mess up? Will I get paid? Will I be able to

maintain my (and my spouse’s) lifestyle?4. Will the bank let me off the hook for the business loans that I

guaranteed?5. How can I treat my non-business daughter fairly?6. What’s the number one fear?... Control! It is rare that a business

owner is willing to give up control of his business… even if you satisfy the owner with a perfect answer to all of his other questions and concerns.

Here’s an example of the control-fear factor at work: About one out of every three business owners who call me to do their estate plans own 51% of their business, while the kids own the other 49%. Why 51%? … Hey, the fear of losing control. Worst of all, in my experience, few professionals know what to do to calm the control fear. Read on, to learn the simple solution.

Let’s face it, the author of this article has neither the power nor the know-how to change human nature, which includes the fear factor. Yet experience – having done hundreds of business succession plans – has taught us how to get the succession job done and done right. Our job,

40 AMBAwww.amba.org

as consultants, is to come up with solid (accepted by the IRS) solutions that will calm the business owner’s fears.

Just how do we do that? We take every fear, question or concern that you, as an owner, have and turn it into a goal. Then we show you how to apply the correct strategy (that we have used over and over again for other owners) to accomplish each of your goals.

Following is a true-life example of a reader/business owner (Joe) of this column. Joe is married to Mary. His son Sam (age 31) works in the family business (Success Co.) David (age 36 and the key employee) – not related to the family – has natural business instincts, is respected by the employees and helps Joe run Success Co.

Let’s list Joe’s fears and concerns, which we have turned into goals. The goals are in italics.

#1. Keep control for as long as Joe lives. Joe owns 100% of the stock of Success Co. (an S corporation). We recapitalized (a fancy word for having voting and nonvoting stock) Success Co. so Joe now had 100 shares of voting stock and 10,000 shares of nonvoting stock… a tax-free transaction. The strategy is for Joe to keep the voting stock (and control) to the day he dies. The nonvoting stock will be transferred to the kids (#2, following).

It should be pointed out that if Joe had owned only 51% of Success Co., the strategy would work the same, but after the recapitalization, Joe would own only 51 shares of the voting stock (keeping control) and 5,100 shares of the nonvoting stock.

#2. Transfer Success Co. to Sam now (freeze the value) without getting beat up with income/capital gains taxes. Sell the nonvoting stock to an intentionally defective trust (IDT). The tax beauty of an IDT is that Joe legally avoids capital gains tax on the sale (say the price is $8 million – paid with a note – and the profit is $6 million). No capital gains tax is owed on the $6 million profit and no income tax is due on the interest Joe is paid on the $8 million note.

Typically the note is paid in full over five to eight years, using the cash flow of Success Co. When the note is paid in full the trustee of the IDT distributes the stock to the trust beneficiary (Sam). As you can see Sam never pays even a dollar to own the nonvoting stock. Neat!

An IDT sure wins taxwise over a typical sale to Sam. Why?... The huge tax burden on Sam for a typical sale disappears. For example, if the income tax rate is 40% (state and Federal combined), Sam must earn about $167 dollars, pay $67 in income taxes to have $100 left to pay his dad. With an $8 million price, Sam must earn over $13 million to pay Joe the $8 million. Ouch! So bless the IDT.

#3. Make sure that Joe and Mary can maintain their lifestyle for as long as they live.First, a little more information: Sam does a good job as one of 80 employees at Success Co… Is well liked by his fellow employees, but simply does not have what it takes to now or ever manage the business. Yet, Joe and Mary want to keep Success Co. in the family… So Sam then is the only choice. But what to do about management?

David, the key employee, is the logical choice. We created a non-qualified deferred compensation plan that gives David the benefits of ownership – a share of the profits, gets paid if he gets sick (covered by insurance) and $1 million (again insured) for his family if he gets hit by a bus… all without owning any Success Co. stock.

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David immediately took over as president of Success Co. and took over the day-to-day management of the company. Joe continued as chairman of the board and consulted with David regularly. Interesting, Joe technically had absolute control (owned all the voting stock) but never (so far, two years after the sale to the IDT) found a reason to exercise the control.

Joe continued to work, at full salary, but only worked half days. The intent is for Joe to cut his salary and days worked once his IDT note is paid in full.

An interesting note: Success Co. has grown in sales and net profit since David took over.

#4. Remove Joe’s bank guarantee for Success Co.’s loans? That was easy. A meeting at the bank caused the term-loan provisions to be rewritten, removing the guaranty once the IDT loan to Joe was paid.

#5. Treat Susan (the nonbusiness child) fairly. Besides Success Co. Joe and Mary have only $4.5 million in other assets, not enough to treat Susan equally, which is their definition of fairly. Remember, Success Co. is an S corporation and every year the IDT will receive a dividend from Success Co. equal to about that year’s profit. Here’s the strategy: We had the IDT buy second-to-die life insurance on Joe and Mary. Susan is the beneficiary of the IDT for the amount of the insurance, enough to treat Susan fairly. Where do the premium dollars come from?... The dividend distributions, each year, are first used to pay the insurance premiums, and the balance to pay the $8 million IDT note. Finally, let me point out that most succession plans are similar to the hundreds of others we have done through the years. Yet each one, like Joe’s above, has some unique fears, problems and concerns. Do you have a business succession fear/problem?.. with or without a unique twist? We would like to write about your story and the proper solutions (without revealing your identity) in a future column. Please contact me by fax (847-674-5299), phone (847-674-5295) or email (Blackman@estatetaxsecrets.com). I’d love to hear your story.

In the meantime, if you have a question concerning the succession of your closely held business, call me (Irv) at 847-674-5295. o

Five Trends of Family BusinessA client recently asked me an interesting question regarding family business: what are the five major trends you see in family business? The question is a good one. If you wanted to answer this on your own, you could try to get through the Wall Street Journal or your local newspaper (if you still have one), if for no other reason than to add credence to the trend that reading is the leading cause of depression. I would not advise it because even a simple escape article on fashion offers tips on how to dress for the recession.

So in order to protect you from any further depression, I offer my take on the five mega-trends that I see in family business in 2009 and beyond without the E or R words (that is economy and recession in case you have not been paying attention).

1) The new demography. In every inch of the world the human species is changing and doing so very quickly. While it might not feel like it sometimes, humans are better off today in terms of health, wealth, and the basic human condition than at any time before. The result is that we areliving longer, and this alone is straining society. Another complication is that technology and industry have made us a very mobile and

interconnected society particularly regarding business and culture. The impact on family businesses is tremendous in terms of succession planning, which now is further complicated by people living longer.

But perhaps the most profound impact, is the “stack-up” of various generations in the family and the business that has resulted from longer life-spans and delayed retirement. Furthermore, cultural and societal norms are stressed by the melting pot of positions, expectations and perceptions that are all culturally and generationally valid. The problem is that there is no easy way to make decisions when everyone is right from their own perspective, and when the old rules no longer apply.

Hot Spot to Watch: China’s life expectancy has increased eight years in the last 20 years, as well as the documented disparity of males to females (currently estimated at 20 million more males than females), and then add into the mix of ancient cultural norms of birth order, birth right and gender clashing with the modern generational pressures.

2) The new diversity - generational differences. In the United States we are faced with the new reality that we have five distinct generations in the same house and work place. The five generations GI Generation (1905-1924); Silent Generation (1925-1944); Baby Boomers (1945-1964); Generation X (1965-1980); and Generation Y (1981-20??). Each generation has its unique outlooks, perspectives, communication styles, and perceptions. The result is a living “Tower of Babel” where each generation has a difficult time understanding, communicating and working with each other. Family businesses must pay careful attention to build bridges and understanding between the generations.

Hot Spot to Watch: The “stack-up” of ownership with the GI Generation and/or Silent Generation, as Baby Boomers wait for their turn to lead and own, while right on their heels are their own Generation X and Generation Y children expecting their shot at ownership/leadership.

3) What is family? Many people might not be aware of the fact that one of the most contested debates amongst academics, government officials, sociologist, anthropologist, psychologist, and theologians is how to define the modern family. Forty years ago most Americans defined family as that of kinship through blood and marriage. The current demographic realities represent a society with a decline in marriage, rise in cohabitation, increased divorces, multiple remarriages, and re-parenting. The question for the family business is how do we define family? This basic question should be asked often, as the dynamics of the family continues to change over time. My experience with clients that ask this question that are able to talk about whether they choose “blood” only, or have the most open definition, is that they spend time thinking about and discussing this fundamental question that propels the family business.

Hot Spot to Watch: With an increase in remarriages and the phenomenon of “his”, “her” and “our” kids succession and estate planning can be complicated and the role of an outside expert can be extremely helpful for a family business to navigate these challenging areas with the hope of still having a good holiday season.

4) Power of spouses. Some time ago, Dr. Leon Danco’s classic book Beyond Survival warned the family business leaders’ lack attention to the in-laws and spouses was the quickest recipe to family business disaster. With more generations in the mix, along with the increased complexity of family roles, Danco’s point is even more important. Today spouses and in-laws are far more likely to be inquisitive, expect to be involved, and are more

42 AMBAwww.amba.org

aggressive in voicing their opinions. Let’s face it, the family business has tremendous influence on all relationships within the family and the stress that resonates from a family business can severely impact every relationship. To be successful, the family business must look at the system of family ownership and management like a good party where everyone brings something. This means that each person has at least one clear role, an opportunity to contribute, and has a free flow of communication.

Hot Spot to Watch: Failure to communicate and educate spouses about the business and leave time for the family leads to misunderstanding and poor communication. At the same time, failing to respect the contributions of spouses and the boundaries between family and business is certain to lead to serious problems.

5) I am too busy. I am known by family and friends for making silly but simple New Year’s resolutions. A couple of years ago I decided that I would attempt to go the entire year without saying the phrase “I am too busy”, or I would find myself and/or be publicly admonished by my family or friends. I can tell you this was one of the most challenging New Year’s resolutions and it took me until about October to break the habit.

The point is that we are all very busy as our lives are packed with social, work, personal, family, community, commitments, and events that run our lives. The simple fact is that is there nothing more important than our families. And if we have a business, it also needs to be a high priority. We know that in today’s world if it is on our calendar we usually get it done. Then doesn’t it make sense that we put time on our calendar to spend time with our family to get to know each other as adults socially? This is not only important for one generation but it makes the time for the next so they can build their relationships as adults and business partners.

Hot Spot to Watch: In the model of generational handoffs of siblings to cousins we must acknowledge the fact that our time together as siblings and cousins has diminished as we become more mobile and geographically dispersed, as well as the increasing time constraints placed on us by busy calendars and lives. We must make the space in our lives as family business people to interact socially if for no other reason than to build bonds with our children and expand our knowledge of each other as adults. Check how many times you say, “I am too busy”.

Reprinted with permission of Family Business Consulting Group® at www.familybusiness.co. o

Another Tidbit - A “How To” Resource!In business, we ask a lot of “How To” questions. Here is a great resource: www.ehow.com/business/ Just as a sample, I entered, “How to best advertise locally?” in the search box. Among, other links, here was what I found: www.ehow.com/how_2305152_advertise-locally-free-internet.html Another question I searched answers for was, “How do I reduce the cost of my employee’s health insurance?” I found some solutions: www.ehow.com/how_5658477_reduce-employee-health-insurance-costs.html o

Business Success StrategiesBusiness Success Strategies

Achieving Greatness: The Value of AssociationsBy: Don Yaeger Association leaders and corporate executives have long recognized that great lessons – lessons in leadership, team building, handling adversity, and managing success – can be learned from their peers in the world of sports. This explains why some of the most sought after public speakers at corporate events are sports greats – Miami Heat President Pat Riley, Duke basketball coach Mike Krzyewski, former Pittsburgh Steeler running back Rock Bleier and former LSU basketball coach Dale Brown are among the most popular speakers on the circuit. The lessons they teach and exhibit in their world translate perfectly into yours. In my 20-plus years as a writer for Sports Illustrated and author of more than a dozen books, I have been blessed to spend hours interviewing great winners like Riley, Krzyewski, basketball legend Michael Jordan and Hall of Fame running back Walter Payton. Some of the best lessons I have learned, however, have come at the foot of the greatest winner of them all, the late John Wooden, former UCLA basketball coach and winner of unprecedented 10 NCAA championships. Wooden also was an oft-tapped corporate consultant on the subject of leadership. Before Wooden’s passing, I often traveled to Los Angeles to talk with him about greatness and the traits of those who have achieved it. One characteristic he was passionate about was that the truly “great” understand that value of Associations. They know they can only become great if they surround themselves with others who are headed in that direction. Just a couple of years ago, the then 97-year-old Wooden, his mind sharp as any 30-year-old I had met, got a twinkle in his eyes when told me he had a story to share, one I enjoy sharing with others. “Many people, when they ask me about coaching great players, always ask me about my two most famous centers, Lew Alcindor (who became Kareem Abdul-Jabaar) and Bill Walton,” the coach said, “But one of the greatest I have ever coached is a player many wouldn’t suspect. It was Swen Nater.” I think Coach enjoyed the look of surprise on my face. I remembered Nater, but just barely. What I remembered was that he was cut from his high school basketball team as because, even at 6-foot-11, he was too clumsy to offer the team any value. He didn’t give up, though, and several years later made a community college team. He became talented enough that several four-year colleges offered him scholarships. At the time, UCLA and Wooden were in the middle of one of the most spectacular runs in all of sports, winning seven of eight national championships. Alcindor had graduated, but Wooden had a new center, Walton, who he thought might be even better. Nater’s community college coach asked Wooden to consider his player. “I was told he could, at the very least, be a great practice opponent for Walton,” Wooden recalled. “So I spoke with Swen. I was honest. I told him he could go to a small school and play all the minutes he wanted, or he could come to UCLA, where he likely would never start a game, but where he could play against the best center in the country every day. That’s the best I could offer him.” Nater didn’t flinch. He accepted the opportunity and, as Wooden had promised, he didn’t start a single game at UCLA. “Swen understood that to become the best he needed to associate himself with the best he could find,” Wooden said. “There was no better than Bill Walton.”

Or John Wooden.

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When his three years at UCLA were complete, Nater had been part of a team that won a record-breaking 88 straight games and had played for three more national championships – all as Walton’s backup. Nater then made history when he became the first player selected in the first round of the professional basketball draft without ever starting a college game. He played 12 years professionally and now is a senior executive in the corporate offices of COSTCO. His career “is absolutely and directly the result of having made the decision to associate myself with folks who were the very best,” Nater told me. “I learned that you are who you associate yourself with.” Coach Wooden was succinct: “Mark these words…You will never out-perform your inner circle. If you want to achieve more, the first thing you should do is improve your inner circle.” At its core, that is exactly why associations hold annual events. Those conventions are a member’s opportunity to improve his or her inner circle, to learn and associate with the very best. Like Swen Nater, I hope that each of you have identified those in your profession from whom you could learn, those who share your passion for greatness. Then, while attending your national conventions, introduce yourself, spend time asking and learning what it is they do that makes them successful. These lessons are often transferable.

Then take the lessons home with you. Make your aspirations known to your staff and your membership because they want to associate themselves with greatness, too. You’ll be amazed by what you can achieve when you surround yourselves with those headed in the same direction. At each of these steps you’ll understand why John Wooden agreed that the value of Associations is one of the most significant traits of greatness.

Don Yaeger is a nationally acclaimed inspirational speaker, “New York Times” best-selling author and longtime associate editor of “Sports Illustrated”. He speaks on the subject of Greatness, taking lessons from the world of sports and translating them to business and professional audiences. He can be reached through his website: www.donyaeger.com. o

Update on Section 529 PlansA section 529 plan is a program established and maintained by states or instrumentalities of the state that allows taxpayers to contribute to either a prepaid educational service account (i.e., prepaid tuition account) or an education savings account (which is similar to a Roth IRA) for a designated beneficiary. All contributions to 529 plans made by the donor grow tax free and are distributed tax free as long as the funds are only used to pay for a student’s qualified education expenses at an eligible educational institution.

Qualified education expensesEligible expenses are any expenses required for enrollment or attendance at an eligible educational institution. These expenses include:

• tuition• room and board• fees• books• computer equipment and services (i.e., internet access and

educational software) – only for 2009 and 2010. In general, computer technology expenses are not qualified expenses for other education credits like the American Opportunity credit, Hope credit, or Lifetime Learning credit.

44 AMBAwww.amba.org

Eligible educational institution529 Plans can only be used for higher education expenses. Eligible educational institutions are any college, university, vocational school, or other postsecondary educational institution, including graduate programs, eligible to participate in a student aid program administered by the Department of Education

Contribution limitationsWhile there is no income threshold limiting who can contribute to a QTP, the total amount that can be contributed has an upper limit. This limit varies from state to state, but the range is from $224,465 for Louisiana to $386,600 for Pennsylvania. The limits are an effort to deter contributions “in excess of those necessary to provide for the qualified higher education expenses of the beneficiary” [Sec. 529(b)(6)]. There is no ceiling on annual contributions.

Since contributions to a 529 plan are for the benefit of the designated beneficiary, the amounts are treated as gifts; however, contributions that are in excess of the annual gift exclusion do not necessarily have gift-tax consequences. When setting up a QTP, it is possible for each taxpayer to elect to use up to five annual exclusions for each beneficiary, and therefore each parent or grandparent can contribute up to $65,000 ($13,000 gift-tax exclusion x 5 years) without any tax consequences. It should be noted that by contributing in this manner the taxpayer will impact one’s ability to gift in the four succeeding years.

Distribution rulesDistributions from 529 plans are not taxable as long as they do not exceed the student’s adjusted qualified educational expenses, which comprise the total of all qualified expenses less any tax-free educational assistance such as scholarships or grants for the related tax year. Any distributions that do exceed the qualified expenses are to be included in the beneficiary’s gross income subject to tax as well as an additional 10% penalty.

What to do with an underperforming 529 planMany taxpayers are reassessing all of their investments after the difficult times the market faced in 2008 and 2009, and while many are wary of any plan that can be market sensitive, 529 plans have built in a great deal of flexibility for investors when things are not going their way.

• The first and simplest way to reverse a declining 529 plan is to change your investment choices within the plan. Once a year, the asset allocations of a plan can be changed and, depending on the stability of the market, the IRS has been known to allow two investment allocation changes, as they did in 2009. Investors and their advisors should take advantage of this benefit to annually evaluate the investment advantages and disadvantages of their current 529 plans. When analyzing a 529 plan, emphasis should be placed on factors such as the length of time until the funds will be used, investment costs, and current market conditions.

• Another way to turn around an investment that is not performing is to transfer 529 plans. Annually, taxpayers can transfer funds tax free from one plan to another as long as the transfer takes place within 60 days. A major benefit of this option is that changing the plan or the beneficiary can alter the investments available or the length of the plan, creating a better investment situation. However, if the taxpayer is transferringfroma plan in State A to a plan in State B, special attention should be paid to whether there are any limitations or penalties with each state-specific plan.

• The final option is to close the account. If the current fair market value of the assets is less than what was originally contributed to

the plan, you can fully liquidate the account and take an ordinary loss. This loss is treated as a miscellaneous itemized deduction subject to the 2% floor. However this is not beneficial for those taxpayers who are subject to Alternative Mminimum Tax. The amount that is withdrawn when the account is closed is not subject to federal tax and is not penalized federally, but there may be state tax consequences.

Illinois Bright Start college savings programWhile most states offer their own college-savings plans, Illinois’s stands out as having one of the lowest investment costs with expense ratios ranging from 0.20% to 0.22%. An additional benefit for Illinois resident taxpayers is that any contribution to an Illinois plan, up to $10,000 for individuals and $20,000 for married couples filing jointly, is deductable on their Illinois income tax return. Note, there is no carryover of excess deductions from year to year.

Thirty-four states and the District of Columbia offer some form of tax incentive for investing in their college-savings plan. Taxpayers should contact their tax preparer or account representative to verify state-specific information.

Selecting the most beneficial 529 plan can require a great deal of time and research since most plans offer a wide variety of investment options, from stock and bond funds to money market accounts to federally insured certificates of deposit. Yet this can be time and money well spent because the tax incentives of 529 plans outweigh the potential risks. Benefits include no AGI limitation for contributions, the ability to change investment allocations and plans annually, and earnings and distributions that are tax free as long as they pay for qualified education expenses.

Taken from the August 2010 issue of Blackman Kallicks Tax Highlights.o

AMBA Answers Have you used “AMBA Answers”? The AMBA offers this unique networking option that you can use right from your office! It’s located on the AMBA website under “My AMBA”.

My AMBA is part of the “Members Only” section of the site. You can post a question to AMBA Answers and your question will be broadcast to all the AMBA members. If you have a question that you need assistance with, please visit the AMBA Answers section of the website and post your question! Your fellow members will be happy to help you out and get you the answers that you need! Here are some examples of the kinds of questions and responses you’ll find on “AMBA Answers.”: Question: We generally “guarantee” our molds for one million cycles. This is usually adequate because we are confident in our mold’s quality and we generally manufacture low cavitation tooling. We are now quoting a 64 cav mold and the customer wants to know our guarantee. With the 64 cav’s and an estimated cycle of 10 sec. Our normal guarantee would expire in six months! Also, the customer claims that they guarantee their tools (they build molds and mold parts) for 10 years. I was thinking I’d go the 10 years provided they return the mold bi-annually for PM... What are your typical mold guarantees? Posted 5/14/10 Answer:I can’t believe anyone guarantees a mold for 10 years unless there

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Tech CornerTech Corner

are a large number of conditions that go with that. There are a lot of considerations when guaranteeing a mold: 1. What is the polymer material being used? Polypropylene or 30% glass-filled nylon? Big difference!! 2. Will they maintain the mold in accordance with the recommendations in the mold manual and have written proof that this was done? 3. Bringing the mold back to the original mold manufacturer once per year for a thorough inspection is a good idea -- I’d make this an absolute must for a 10-year guarantee. 4. Workmanship and mold fit and function, and conforming parts are guaranteed, but components that wear out due to normal wear and tear that occur from high-cavitation, high-volume parts molding are not covered, as are other items that wear such as parting lines, etc. 5. A condition in the guarantee that any damage to the mold done by improperly processing the mold, using sharp instruments to dislodge a stuck part, or other damage caused by inept personnel at the molders, lack of proper cleaning and regular maintenance, or failure to return the mold annually to the moldmaker for inspection, makes the 10-year guarantee null and void. If a mold is only going to run several thousand parts a year, it might make sense to guarantee a mold for 10 years, but if it’s going to run 2 million parts a year, a moldmaker must protect himself with conditions for that. I’d ask the other moldmaker for his conditions for guaranteeing his molds for 10 years, then duplicate those (if they cover some of the things listed above) o

Smart Solutions for Mist Collection Technology! Since 1951 Amano Corporation has been providing environmental solutions that improve the workplace and now introduces its filter-less model of oil and water soluble mist collectors. With collection efficiency greater than 99.9% of 2 micron without a filter, four models sizes are available with applications for all types of machining applications: machining center, turning centers and grinding machines.

Amano Corporation also has a full product line of electrical and filter mist collectors along with its line of dust collectors.

Contact information: Scott Fernandez 800.228.2969 or www.vega-tool.com o

YRC Shipping Discounts

Discounts with New Penn, Holland, and Reddaway are available to AMBA members. If you would like to take advantage of your member benefits or you need more information, please call your association benefits coordinator, Krista Appleton, at 800.647.3061, Ext. 6549.

IS’TECH Sequential Valve Gating SystemSISE is introducing the IS’TECH Sequential Valve Gating System, which is capable of handling up to 20 valve gates and up to five openings & five closings per cycle and per valve gate. This new system provides the following:

• Valve gates triggered by any Sensor Signal (from either the mold or the press)

• Six Standard Mold Signals (four for Pressure & two for Temperature)

• Mold Recognition Plug (1 to 128 Molds) • Integrated Multilingual Interface (more than nine standard languages) • Very Fast Reaction Times • 48 Mold Setting Saved in Controller • Enhanced Windows-Operated Monitoring System:

o Memorization of All Cycle Curves o SQL Database Management System o Cycle-To-Cyle Parameters Monitoring o Indicators Creation Device (Viscosity…) o Standard USB Cable Connection o Increased Performance & User-friendliness

For more information contact : Pierre CROZET - North American Operations Manager - pcrozet@sise.fr, Phone: 404-784-8676, Web: www.sise-plastics.com o

New Anti-Drool Sprue Bar Device for Stack Molds - Melt Design IncMelt Design, Inc. (MDI), a leading manufacturer of runnerless injection molding systems, introduces a new Anti-Drool Sprue Bar device. Specially designed for use with stack molds, MDI’s new, patented shut-off device puts plastic drooling problems to rest and can be installed on new sprue bars or retrofitted to fit existing, non-functional ones. Other exclusive features include: * No internal springs or components to contaminate; guaranteed to function flawlessly * Dual engagement surface action assures perfect alignment between the sprue bar and molding machine * Anti-drool technology is located between the machine nozzle and sprue bar, which will keep molds running. No messy cleanups needed. * No material waste equals more cost savings * This device can also be used on hot runner systems running on horizontal injection presses with vertical clamp * Compact and easy to install “Since introducing this device to market, customers who are using our Anti-Drool Sprue Bar device have seen a return on their investment in less than three months’ time,” says Tom Siwek, General Manager at MDI. “In a world where lean is a top priority, this is one device that can help a company achieve its cost-saving goals very quickly.”

For more information, call 800-MDI-ONLY (800-634-6659), or visit www.meltdesign.com. Outside the U.S. dial 1-630-443-4000. o

46 AMBAwww.amba.org

Advertiser’s Index

Alliance Laser Sales ......................................... 16

Alliance Specialties .......................................... 11

Crystallume Engineered Diamond ................. 28

CVD Diamond Corporation ........................... 36

DME Company ................................................ 25

Duro-Chrome Industries ............................... 15

Edro Specialty Steels, Inc. .............................. 43

Ellwood Specialty Steel ................................... 48

A. Finkl & Sons Co. ......................................... 35

Graphic Products North America ................... 26

The Gund Company ........................................ 46

Hasco America ................................................. 43

Incoe Corporation ............................................. 7

Makino ............................................................. 47

Millstar LLC ..................................................... 40

MoldMaking Technology Magazine ................. 6

Osco ................................................................ 46

PCS ................................................................... 26

Proceq USA, Inc. ............................................. 32

Progressive Components .................................. 2

Rocklin Manufacturing Co. ............................ 36

Ultra Polishing ................................................. 10

Wisconsin Engraving Co., Inc. / Unitex ......... 17

Yellow Transportation, Inc. ........................... 39

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PAIDMedinah, IL

Permit No. 20

The specialty steel industry is not as big as somemay think. In reality, buyers only have 2 choiceswhen it comes to specialty steel suppliers in North America.

One supplier is posing as three separate compa-nies, but operates as a joined enterprise. And theother is a bit more nimble.

Ellwood Specialty Steel is the number-one choicefor fast service and faster delivery, on the day promised or earlier. Whether you need a quote orhave a question, ESS stands ready to meet andexceed expectations, every time.

For more information on how to avoid the 3-headedenterprise or to get a fair and independent quote,please visit http://nostrings.elwd.com

Ellwood Specialty Steel - Ready and Reliable.

United StatesEllwood Specialty Steel800-932-2188esssales@elwd.com

CanadaEllwood Specialty Metals877-978-2772esmsales@elwd.com T O O L S T E E L P R O D U C T S

M A D E I N T H E

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