Volume 41, Number 31

UTAH’S BUSINESS JOURNAL$1.50Feb. 27-March 4, 2012www.slenterprise.com

THIS WEEK

• Industry Briefs •Begin on page 8.

Earnings RoundupSee page 7.

Startup techfirm gets

$1.7 millionSee page 3.

Teryiyakirestaurantchain eyes

UtahSee page 5.

Planners OK32-acre

Sandy projectSee page 8.

• Calendar •See page 13.

Draper greenlights28-acre apartment,retail development

Smart Card Summit speakers: now is the timefor the EMV chip

By Barbara RattleThe Enterprise Ground is expected to be broken in early summer for an approximately 28-acre mixed used project at 600 East and 12300 South in Draper, formerly the site of Day Dairy. The project is being jointly developed by the Utah office of California-based Wasatch Advantage Group and Salt Lake City-based Gardner Co. Adam Lankford, senior development manager at Wasatch Advantage Group, said the project will be constructed in two phases. The first phase, dubbed Villages at Day Dairy, will consist of 288 Class A luxury apartment units in six-plex and 24-plex buildings that will be two and three stories in height. He said the majority of

the units will be six-plexes with garages. Amenities will include a 4,000 square foot clubhouse and pool; there will be a park within the development. The rental units will have one, two and three bedrooms and range in size from about 900 to 1,600 square feet. Lankford said rental rates have not yet been finalized. Wasatch will manage the apartments, which should take about a year to build. Phase one will also include construction of the backbone infrastructure for the project’s retail component, which will be constructed as tenants are signed. None have yet inked leases, but Lankford said the developers have been talking with several potential tenants. “We’ve got some that we’re

EMV chips are embraced around the world far more than in the U.S. The gold-colored chip can be seen on the left side of this card.

Legislators are considering several bills relating to Internet sales taxa-tion. Success getting out of committee has been mixed.

At the Smart Card Alliance Payments Summit held this month in Salt Lake City, the message was clear: migrating to the EMV (Europay-MasterCard-Visa) chip will be the foundation necessary to move to the next level of secure and convenient payments, whether in the form of contact, contactless and/or mobile. “The answer is simple: it’s time,” said Ed McLaughlin, chief emerging payments officer for MasterCard Worldwide, on MasterCard’s recent announce-

ment of its roadmap, which includes the path for migration from magnetic stripe to EMV technology. Referring to EMV as “the foundation of the future of payments,” McLaughlin detailed MasterCard’s plans to encourage the rapid adoption of more secure contact and contactless chip cards by giving more benefits to merchants that invest in secure, dynamic authentication methods. Visa’s Jennifer Fischer, head of U.S. payment system risk,

Bill would cut business owners' personal property taxes

On Capitol Hill, Internet salestaxation continues to be a hot topic

By Brice WallaceThe Enterprise A House committee passed out a bill designed to help busi-ness owners with personal proper-ty tax costs after the bill’s sponsor adjusted a provision about the tax threshold. The House Revenue and Taxation Committee had taken no vote on HB41 at an earlier meet-ing but endorsed the revised ver-sion. The original version exempt-ed from taxes the first $25,000 of taxable tangible personal property for businesses. The latest version calls for an exemption for prop-erty that has a total fair market value per county of $15,000 or less. Current law has a figure of $3,500 or less. Critics had said the original version placed too much of a tax shift onto Utah residents. The lat-est version whittles the shift from

$12 million to $2 million, mean-ing the owner of a $200,000 home might see personal property taxes rise $2 rather than the $8 in the original bill. “It drastically changes that downward by 80 percent,” the bill’s sponsor, Rep. Patrick Painter, R-Nephi, said of the tax shift amount. “That was the goal. That’s what I heard, loud and clear, from the committee, and that’s what I’ve done here.” Painter said that about 30,000 businesses statewide would ben-efit from the bill, down from about 70,000 in the original version. “The goal of my bill is, if I can make life easier and likely reduce the friction costs of having to have a business guy go through an audit, I think I’ve done something good for the little guy that creates the jobs and works his tail off 14 hours a day,” he said. “My goal is

By Brice WallaceThe Enterprise Taxation of Internet sales continued to be prominent at the Utah Legislature, with several bills having mixed success getting out of committee. For example, a second try to get committee approval of a bill requiring a tax-implication notice on Internet purchases ended the same way as the first: rejection. The second failure at the hands of the House Revenue and Taxation Committee came despite an amendment that watered down the notice language. The original version of

HB385 called for out-of-state Internet, catalog and phone sales companies to alert customers that their transactions may be subject to sales or use taxes. It would not have applied to online auc-tion websites or sellers with total gross sales in Utah of less than $100,000. Currently, taxes for online purchases are required to be reported on buyers’ individual tax returns. Before the second vote, the bill was amended to retain the notice that the seller did not col-lect sales or use tax on the sale

see DAIRY page 6

see CARDS page 4

see INTERNET page 2 see PROPERTY page 2

to make life simpler for him — nothing more, nothing less.” But Cache County assessor Kathleen Howell said companies still would need to file tax state-ments and would still be subject to audit. “So what we’ve done is, we’ve widened the [tax] gap, we’ve shrunk the base, which

means the rate goes up,” she said. “So our concern is, what does it resolve? If the issue is the onerous nature of filing, we need to come up with a bill that would resolve that. All we’ve done is increase the exemption.” Salt Lake County Assessor Lee Gardner agreed. “It really doesn’t change anything except give $2 million worth of property tax exemptions that you and I and everyone else who owns property gets to pay,” he said. Candace Daly, Utah direc-tor of the National Federation of Independent Business, reiter-ated that while $15,000 “is a good start,” she would prefer the tax be eliminated altogether. “We think it’s going to be an excellent thing for our small businesses,” she said of the revised bill. “We applaud the efforts of trying to do away with this unfair burden on small business particularly.”

2 The Enterprise Feb. 27-March 4, 2012

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but would have eliminated the lan-guage saying that the sale might be subject to sales and use taxa-tion because it was made on the Internet or other remote method. It retained a suggestion that the buyer consult tax laws about the purchase. Rep. Merlynn Newbold, R-South Jordan, said her amend-ment language was “more factual and less threatening” to Internet customers. The bill’s sponsor, Rep. Wayne Harper, R-West Jordan, said the amendment improved the bill, but ultimately his colleagues disagreed. Harper reiterated that having a tax-implication notice would not place “an onerous bur-den” on Internet sellers. In support of the bill, Rep. Steve Eliason, R-Sandy, said local companies pay a variety of taxes and that it’s “extremely frustrat-ing” when a customer walks into a store and uses a phone app to scan a product and discover it can be purchased online at the same price or cheaper without the sales tax.

“Supporting this [bill] sup-ports our local economy,” Eliason said. But Jonathan Johnson, presi-dent of Utah-based Internet retail-er Overstock.com, said the bill is unfair because it would not treat all retailers the same way. For example, he said, at Walmart there is no notice next to a product that warns consumers that they will pay a sales tax if they buy it. While Overstock.com would not be affected by the bill because it has operations in Utah, Johnson said Harper’s bill and those else-where could lead to a “patchwork solution that will grow across 50 states.” Having 50 different notice requirements would slow transac-tions and “clearly hurt sales,” he said. Instead, a federal law is needed, he stressed. The real solu-tion will be simple plug-and-play software that Internet sellers can use – something especially help-ful to start-up sellers. Without it, Overstock.com has to deal with 10,000 taxing jurisdictions in the U.S. for its more than 1 million online products. “You can see the tangle that is,” he said.

Betsy Burton, owner of the King’s English Bookshop, testi-fied in favor of the bill. She said that brick-and-mortar businesses are at a 10 percent disadvantage to Internet sellers – about 7 percent on the sales tax plus 3 percent for the cost of handling tax matters. Burton said that without tax equity, communities ulti-mately will lose small businesses. Government, she said, assumes that like “a faithful wife, that we’ll always be there.” “I would suggest that if things don’t change – and Internet taxation is a large part of what needs to change – we won’t be here anymore because you can’t expect any small business or busi-ness of any size to operate at a 10 percent disadvantage over time,” she said. “It just doesn’t happen. Can’t happen. We can’t exist.” Reps. Gage Froerer, R-Huntsville, and Joel Briscoe, D-Salt Lake, both said they were concerned about possible lawsuits because the bill might conflict with the commerce clause of the U.S. Constitution. Rep. Jim Nielson, R-Bountiful, said any online

notices would broaden the tax base. “Unless this [bill] is coupled with a corresponding [tax] rate decrease, I cannot support it,” he said. In a later meeting, the House Public Utilities and Technology Committee passed out two bills regarding “remote” sales. One is HB384, sponsored by Harper, designed to keep companies from dividing their operations as a way to avoid tax collection responsibil-ities. The other is HJR14, urging Congress to pass the Market Equity Act of 2011 and the Marketplace Fairness Act – deemed by many as the long-sought “federal solu-tion.” Bruce Johnson, chairman of Utah State Tax Commission, said HB384 focuses on companies that have structured affiliates in a way to avoid tax collection. Jonathan Johnson said the bill would be challenged as uncon-stitutional, and Bruce Johnson agreed that it would be litigated. Both Scott Hymas, CEO of RC Willey Home Furnishings, and Dave Davis, president of the Utah Retail Merchants Association and the Utah Food Industry

Association, echoed Eliason’s anecdote from the earlier commit-tee meeting, of people scouting for products at retail stores but using technology to turn to online sites for purchases. “We’re tired of being the showroom for online retailers,” Davis said. Both Hymas and Davis sup-ported HB384, although they acknowledged it needs work. “Is it a perfect bill? Probably not,” Hymas said. “Is it something that takes us in the right direction? I think so.” As for the resolution aimed at Congress, HJR14, sponsored by Eliason, says the two federal bills “will help level the playing field between traditional brick and mortar retailers and Internet-based retailers.” Still, Jonathan Johnson opposed HJR14. While urging a “federal solution,” he said those two bills are “unfair and flawed.” Rep. Ken Ivory, R-West Jordan, voted against HJR14, saying he favored a resolution that was more conceptual rather than one urging congressional passage of specific bills.

INTERNETfrom page 1

PROPERTYfrom page 1

The EnterpriseFeb. 27-March 4, 2012 3

Startup tech firm gets $1.7 million in funding Scan, a technology firm founded in Provo late last year by three Brigham Young University students, has closed on $1.7 mil-lion in seed funding from several Silicon Valley investors. Menlo Ventures’ Shervin Pishevar led the round, with participation from Ariel Poler, AngelPool, Charles River Ventures, Digital Sky Technologies, Google Ventures, Raptor Group, Transmedia Capital, Social + Capital Partnership, Ludlow Ventures, Atom Factory, Vikas Gupta, Joe Greenstein and Rachel Sheinbein. “We’ve built a simple, easy way for companies to quickly cre-ate a beautiful, optimized mobile presence,” said Garrett Gee, co-founder and CEO of Scan. The firm’s website, Scan.me, enables users to easily create their custom Scan Page, a user-friendly mobile website, accessible via QR code or Scan.me short URL. These Scan Pages bring together items the user wants to share with their audience in one place, including branding, social media, additional information like videos, blogs, other and other content and calls to action. Companies that have already set up their mobile presence using Scan include Barneys New York,

Lady Gaga, Warby Parker, the Boston Celtics and Universal Studios. “Scan changes the way we interact in the world via our mobile devices, by creating a two way conversation,” Pishevar said. “With actions like Scan to Like, Scan to Check-In and Scan to Follow, users can automatically communicate with their audience just by scanning. The site also provides analytics giving instant

feedback of the effectiveness of campaigns.” Alongside the Scan Pages, Scan is the producer of a Utilities app that has more than 10 million downloads in the Apple AppStore since inception one year ago while maintaining a 4.5 star rating. Scan is also available in the Android Marketplace. In addition to Provo, Scan maintains an office in San Francisco.

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Bill would prevent cities, countiesfrom mandating company benefitsBy Brice WallaceThe Enterprise A Senate committee has endorsed a bill that would prohibit cities and counties from requiring businesses to offer their employ-ees certain benefits. “This is an anti-mandate mandate,” the bill’s sponsor, Sen. Mark Madsen, R-Lehi, told the Senate Business and Labor Committee. SB99 would not affect those entities from requiring benefits during their contract bidding pro-cesses. But otherwise, they could not require private employers to offer employees accident and health insurance, life insurance, sick leave or family medical leave. Businesses would be free to offer benefits “they see appropriate,” he said. “We’re living in tough eco-nomic times, and different people react to that differently,” Madsen said. He added that “when gov-ernment pretends to manipulate wages or benefits, it throws cer-tain people out of work and some-times may cause businesses to fold.” Madsen noted that some ben-efits are required by law, includ-ing federal law. “We don’t want to pile on and to create additional difficulties for employers and employees by creating more and more mandates and making busi-ness that much more difficult,” he said. Also, having inconsistent policies throughout the state could lead to some cities being “more viable” for businesses than oth-ers. Melva Sine, president of the Utah Restaurant Association, tes-tified in support of SB99. She said several local governments outside Utah have such benefit mandates. Of particular concern are those requiring sick leave — averag-ing about nine days per year per employee — which she said many small businesses simply cannot afford. “If I can’t afford to offer that benefit to my employees, it shouldn’t be mandated on a busi-ness that they have to do that, either,” Sine said. Maryann Christensen of the Utah Eagle Forum also favored the bill. “This is really an impor-tant protection against more man-dates,” she said. “Because our economy and the health of our jobs in the state depend largely on the small businesses in the state, it’s really important that we pro-tect them from things that make it hard for them to do business.” However, Judi Hillman, executive director of the Utah Health Policy Project, said the bill is “needless or poorly timed” because most health reform efforts are moving away from mandates

anyway. “I can’t imagine any city or town that’s going to want to do some kind of a mandate,” she said. “Again, the whole industry is moving away from that. Even if they did, that should be their business. We should respect local control.” Madsen said “local control” often is invoked “when it’s conve-nient to advance a particular agen-da.” But states get their authority from the people and then act as a check against whatever authority they delegate up to the federal government or down to local gov-ernments, he said. “We have a responsibility, always, to be a check on abuse of local authority. We can’t just wash our hands and walk away. Again, there are no cities currently in the state that have taken this path. This is a trend that is creeping throughout the country and it is wholly appropriate that we take action now to preempt that from happening and make sure that our employees, our citizens, are pro-tected,” Madsen said. Christensen surmised that should the bill fail and benefit mandates materialize, businesses would find ways to skirt them. “Right now, the businesses that cannot afford employee ben-efits, if it’s mandated that they do that, they’ll just cut everybody’s hours so that everyone is a part-time employ so that they don’t have to give those benefits,” she said. “They’ll be hiring more peo-ple but for less hours to protect themselves from those extra costs, and the employees will have to get more part-time jobs and still not have any insurance cover-age. I think it’s a better thing to have the climate where they can take those jobs, knowing that they won’t have those employee ben-efits.”

agreed. She stressed that EMV’s dynamic authentication is critical for a more secure payments indus-try, maintaining that it will lay the groundwork for contact, contact-less and mobile EMV under the same infrastructure. Visa guide-lines promote an “always online” strategy that does not mandate offline authentication with PIN. Issuers have flexibility to choose

cardholder verification options, whether it is online and/or offline PIN, signature or no verification method. Fischer noted that Visa’s issuers have issued one million EMV chip cards in the United States to date. In his presentation, chip card expert and consultant Dr. Toni Merschen urged attendees to learn from other countries that have migrated to EMV. Citing the trend of fraud migrating to the United States because of its weak mag-netic stripe technology, he said, “EMV deployment is the most effi-cient way to decrease fraud,” but added it is critically important to secure card-not-present (CNP) and ATM transactions at the same time as deploying point-of-sale (POS) chip card solutions. Merschen also suggested attendees “not renounce offline transactions,” saying that offline PIN means global interop-erability. Merchants and processors had requests for payments brands in regards to U.S. EMV. NACS pay-ments consultant Gray Taylor said “we need a roadmap that everyone understands and is very clear.” Jamie Henry, the senior director of payments services at Wal-Mart concurred, saying “a detailed plan will help reduce confusion.” The differing mobile wallet solutions emerging in the market-place was also a hot topic, with presenters commenting on con-sumers’ increasing use of mobile

phones to compare prices, browse and purchase. George Peabody, director of Mercator Advisory Group’s Emerging Technologies Advisory Service, called these consumers “weaponized shop-pers.” Both MasterCard and Visa included mobile in their vision of the future of U.S. payments, while Isis and PayPal took the floor to talk commerce. Isis director of sales Jim Stapleton announced that the com-pany’s upcoming summer pilot in Salt Lake City will “transform the way people shop and pay.” Stapleton called the Isis mobile payment infrastructure — a joint venture formed by AT&T, T-Mobile and Verizon — a “convening of the industry” that gives banks and merchants “tinker toys” to develop payment and loyalty programs for customers in the form of a mobile wallet that is “safer than your other wallet.” Patrick Gauthier, head of PayPal’s product strategy and business operations, retail ser-vices, focused on commerce and the consumer experience in his presentation. Citing that in the last few decades payments have driven commerce, Gauthier said that at least in the next 15 years, “commerce will drive what pay-ments need to do.” He suggested that mobile wallet solution provid-ers should roll out infrastructures and programs with merchants’ and consumers’ wants and needs in

mind, as these are the parties that are going to drive usage. Several large U.S. transit agencies talked about their plans to move to open fare collection systems. All were looking to “future proof” systems, and all had aggressive implementation schedules. John McGee, SEPTA’s (Southeastern Pennsylvania Transportation Authority) chief officer of new payment technolo-gies, talked about their recent open payment system contract award, and their goal of a future where virtual ticketing plays a major role. The Chicago Transit Authority (CTA), which recently awarded a $454 million contract to Cubic Transportation Systems, will skip pilots and aim for full implementa-tion of its open payment system in the second quarter of 2014. Eric Reese, general manager of business development, said the main objec-tive is to let consumers use the same payment mechanism across all of the CTA’s areas of service, adding, “NFC (near field commu-nication) is a thought. When that time comes, we will be ready.” The Metropoli tan Transportation Authority (MTA) of New York is ready to commit to open payments as well. Amy Linden, the MTA’s senior direc-tor for new fare payment systems, said that their Tap & Ride project is about consumers being able to “buy fare products anytime, any-

where, and manage accounts any-time, anywhere.” With the goal to mainstream payments and leverage existing payment technologies and networks, Linden said the MTA aims to “go live” within three years of the design notice to pro-ceed (NTP). The Smart Card Alliance is a nonprofit, multi-industry asso-ciation working to stimulate the understanding, adoption, use and widespread application of smart card technology. Most of the world has fully migrated or is in the process of migrating to EMV chip technol-ogy for debit and credit payments. According to EMVCo, approxi-mately 1.2 billion EMV cards have been issued globally and 18.7 million POS devices accept EMV cards as of Q1 2011. This rep-resents 40.1 percent of the total payment cards in circulation and 71 percent of the POS devices installed globally. Given the prevalence of EMV chip technology in the rest of the world, many have questioned if and when the United States would move to EMV. U.S. financial insti-tutions started issuing EMV chip cards to their frequently traveling customers; however the country seemed to be a long way off from acceptance. All of this changed on August 9, 2011, when Visa announced plans to speed up chip migration and adoption of mobile payments in the United States.

4 Feb. 27-March 4, 2012The Enterprise

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CARDSfrom page 1

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Work to begin on upscale Kaysville housing project Having experienced a pickup in demand for more expensive homes, Murray-based Perry Homes plans to break ground in early April for the first phase of Shadow Crossing, a 56-lot subdivision at 55 N. Angel St., Kaysville. Company president Jeff Taylor said the first phase of the 33-acre project will consist of 22 homes, each on lots of a half acre or larger. Homes will range in size from roughly 3,800 to 4,800 square feet and will be priced from about $380,000 to the high $400,000s, including basement, he said. Buyers will be able to select from some 16 home plans, from ramblers to two-story residences. “We’re excited to bring this on. This actually was a development that we had gotten approved many years ago,” Taylor said. “When the market slowed down like it did, especially in the more expensive product, the larger homes, we decided to hold on it. We’ve had a quite a bit of interest in it already as we began the approval process again. Our residential market has been really good lately in all of our price ranges. We’re not out of the woods with this market, there’s still a battle, no question. But we

have just seen enough of a pickup in the more expensive product that we feel like we can go develop this and make this work. We bought it at a reasonable price and we think it’s time to go ahead and get this moving.” It is anticipated that infrastructure work will be

completed by June. Selling and building will begin at that time. A model home should be completed by this fall. Shadow Crossing will be marketed in-house by an affiliate, Perry Realty. Perry Homes has operated in Utah for more than 40 years.

Car dealers back bill barringmanufacturer 'coercion'By Brice WallaceThe Enterprise Car dealers in Utah are back-ing a bill that would prevent auto manufacturers from “coercing” or setting dealers’ prices for certain products and services. The Senate Transportation and Public Utilities and Technology Committee passed out SB68 despite warnings from the manu-facturers that they might refuse to offer any car-buying incentives in Utah should the bill become law. Most of the provisions of SB68 had been ironed out by stakeholders. However, the ban on “coercing or requiring” a dealer to establish prices for certain prod-ucts or services remained a point of contention. The ban would cover agreements, programs and incentive provisions. Craig Bickmore, executive director of the New Car Dealers of Utah, testified that manufactur-ers have the right to control prices for the cars, parts and accessories that dealers obtain from their fac-tories, but the bill would protect dealers’ ability to control prices on aftermarket products and ser-vices. Lincoln Shurtz, representing General Motors, said he agreed that manufacturers should never coerce dealers to do anything. But any voluntary agreement between dealers and manufactur-ers will always contain a list of requirements for each side. Those requirements would be banned under the current bill version, he said. He favored the elimination of the “agreement, program and incentive provision” phrase. But the bill’s sponsor, Senate Majority Leader Scott Jenkins, R-Plain City, said the programs

and incentives are where the coer-cion takes place. Shane Topham, an attorney for the New Car Dealers of Utah, said removing the coercion phras-es “essentially eviscerates” that portion of the bill. “The manufacturer will put out a program that seems vol-untary but if the dealer doesn’t participate in it, then the dealer’s business is materially adversely affected,” Topham said. One example of a coercive contract involves a preferred pric-ing program, he said. The manu-facturer could set a price for the dealer to handle sales documents and it could be less than what the dealer wants to charge. That docu-ment handling “has nothing to do with the manufacturer,” he said. “What we’re saying is that we don’t think that, on these few limited things, the manufacturer should have the ability to reach into the dealer’s business, whether by agreement or by a gun to the head, and cause the dealer to act in a particular way, sell things for a particular price, whatever,” Topham said. As for incentive programs, if dealers do not like the manufac-turers’ terms, they don’t have to participate, Shurtz said. Frank Pignanelli, represent-ing the American Alliance of Automobile Manufacturers, said the bill gets into the “minutiae” of a dealer-manufacturer relation-ship. The result might be that manufacturers stop offering incen-tive programs to dealers. “What we’re doing is, we’re eliminating the incentive to incen-tivize the dealers” with the bill, he said.

Las Vegas-based Teriyaki Madness, a restaurant chain with seven locations in Nevada, is seeking franchisees to bring its fresh, Asian-inspired dishes to the Utah market. Company plans call for four restaurants in the next five years. The firm rolled through the recession, growing same store sales by nearly 22.8 percent between 2008 and 2011. The average ticket price for lunch at Teriyaki Madness ranges from $10-$12, while dinner is around $13. The average total investment to open a Teriyaki Madness franchise is between $198,098 and $390,213, which includes the initial franchise fee. Each restaurant occupies approximately 1,800-2,000 square feet of space, seats approximately 50-75 guests and employs, on average, 12 people.

By Brice WallaceThe Enterprise A House committee has passed out a bill that would extend the life of the Motor Fuel Marketing Act, designed to pre-vent big gasoline retailers from killing smaller competitors by undercutting prices. The act is set to expire this summer, but HB325 would extend its provisions until mid-2017. It bans motor fuel retail marketers from selling fuel below cost. That allows small businesses to have “a fair and equitable shot,” the bill’s sponsor, Rep. Don Ipson, R-St. George, told the House Business and Labor Committee. Without the act, a large com-pany could move into a market, offer below-cost prices and drive out the small companies, ultimate-ly leaving the large company with “a free run” at the market and higher prices for consumers, he said. “The free-market people might tell you that the market ought to drive this, but I don’t think it’s fair to drive small employers and small businesses out of business by unethical con-duct by larger businesses,” Ipson said. Rep. Steve Eliason, R-Sandy, who worked five years as an exec-utive of a Utah-based oil com-pany, said a retailer would sell below cost to “run the competition out. … What happens once the competition is gone, the prices go up. When there’s less competition, it’s just a market mechanism, the prices go up.” Without the act, “you’ll immediately begin to see predatory pricing and it will just

be a matter of time before the small guys are put out of busi-ness, and then will be the time that those that can flex their muscle will do so,” he said. Larry Hansen, president of the Utah Petroleum Marketers & Retailers Association, said preda-tory pricing is “a big issue” and agreed that prices will rise without the act. John Hill, the association’s executive director, said the local market has “a few big players that are controlling the market.” “We are not trying to protect inefficient small operators,” he said. “We’re just trying to keep a mix of small, independent, middle-sized and large marketers working together for the benefit of the consumer.” Hill said the act is “keeping the market somewhat in balance.” Others, however, said the act is not needed. Matthew Piccolo, policy analyst for the Sutherland Institute, said such regulation of a free market often does more harm than good. “Stiff competition can be very tough for any company to deal with, but stiff competition is exactly what drives the free mar-ket. It’s what drives innovation,” Piccolo said. “That’s one of the best things about it. I don’t think it would be wise to limit competi-tion in this particular industry.” Rep. Jim Dunnigan, R-Taylorsville, also favored the free market approach. “I just don’t understand why you’re holding on to this in the belief that it’s saving people [money]. … Why don’t we just let the free markets work and then if there’s a problem, maybe we address it?” he said. Kirk Torgensen, chief deputy in the Utah Attorney General’s office, said the act is not a free market statute, which puts it in conflict with the state Constitution, which promote free markets. He also noted that his office has never had the funds to enforce the act. He suggested the AG’s office be taken out of the bill’s language or be given the funding to enforce its provisions. Ipson said it is impossible to know what the business land-scape in Utah would have been without the act in place. He said he believes it has been a deterrent to unethical behavior. “I think in the long run, we will be better served with this than without it,” he said. Speakers said that stores that offer rebates on gasoline when a customer buys other merchan-dise are unaffected by the act. An example is a grocery store offer-ing gas rebates after grocery pur-chases. Also, a competing retailer would be able to match that rebat-ed price and still comply with the act.

6 The Enterprise Feb. 27-March 4, 2012

focusing on,” he said. “The whole project is designed to be an upscale mixed-use project so those are the tenants we’re going after. There are smaller pads and then a place for a mid-box.” Wasatch and Gardner have the vacant land under contract, Lankford said. Architect is Babcock Design Group while the general contractor will be Wasatch Regional Builders, Wasatch’s in-house construction group. “It’s been a long time coming,” Lankford said of the development. “We think it’s a great time to bring on a project like this, where you have a mix of uses. It’s a good time to build apartments. Bringing in 228 new families will be a huge plus for the retail. Draper City has been really good to work with; it’s a great opportunity to pick up 28 acres on 123rd in Draper. Pieces like that don’t come along very often.”

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Extra Space Storage Extra Space Storage Inc., based in Salt Lake City, reported unadjusted funds from operations of $34.4 million, or 35 cents per share, for the fourth quarter of 2011. That compares with $23.9 million, or 26 cents per share, for the fourth quarter of 2010. Net income in the most recent quarter totaled $16.3 million, or 17 cents per share. That compares with $8.9 million, or 10 cents per share, for the same quarter in 2010. For the full year 2011, unad-justed FFO was $115.8 million, or $1.20 per share. That compares with $83.7 million, or 91 cents per share, in 2010. Net income was $50.4 million, or 54 cents per share. That compares with $26.3 million, or 30 cents per share, in 2010. The company owns and oper-ates self-storage properties in the U.S. “With strong property per-formance and robust acquisition activity, we produced 32 percent annual growth in our FFO per share over 2010 and delivered an excel-lent return to our stockholders,” Spencer F. Kirk, chairman and CEO, said in releasing the results. “We are intensely focused on the fundamentals that drive our busi-ness. Strong execution on the basics and continued innovation will drive our success and allow us to capital-ize on an environment marked by higher occupancy, stronger pricing and limited supply.”

SkyWest SkyWest Inc., based in St. George, reported a net loss of $18 million, or 35 cents per share, for the 2011 fourth quarter. That com-pares with net income of $37.2 million, or 67 cents per share, for the same quarter a year earlier. The company said half of the difference between the quarters was attributable to a reduction in pre-tax earnings and non-operational activities related to foreign invest-ments. Operating revenues in the most recent quarter totaled $899.9 million, up from $796.3 million a year earlier. For the full year 2011, SkyWest reported a net loss of $27.3 million, or 52 cents per share. That compares with net income of $96.4 million, or $1.70 per share, in 2010. Operating revenues for 2011 totaled $3.65 billion, up from $2.77 billion in 2010. SkyWest is the holding com-pany for two passenger airline operations and an aircraft leasing company. The passenger airlines are SkyWest Airlines, also based in St. George, and ExpressJet Airlines, based in Atlanta. Combined, the company has 3,700 daily flights in the United States, Canada, Mexico and the Caribbean and a fleet of about 730 regional aircraft. “We experienced some unan-ticipated expenses in the fourth

quarter; however, I remain con-fident in our ability to respond to these challenges,” Jerry C. Atkin, chairman and CEO, said in announcing the results. “We have an action plan in place for 2012 that we have started to execute and is expected to return us to profit-ability for the year. Having said that, we expect the first quarter of 2012 to be challenged but some-what mitigated from our fourth quarter 2011 results.”

Skullcandy Skullcandy Inc., based in Park City, reported net income of $12.3 million, or 44 cents per share, for the 2011 fourth quarter. That com-pares with a net loss in the prior-year quarter of $9.7 million, or 69 cents per share. Sales in the most recent quar-ter totaled $83.4 million, up from $64.6 million a year earlier. For the full year 2011, the company reported net income of $18.6 million, or 79 cents per share. That compares with a loss of $9.7 million, or 69 cents per share, for 2010. Sales in 2011 totaled $232.5 million, up from $160.6 million in 2010. Skullcandy produces head-phones, earbuds and other audio and wireless products. “We are pleased with our fourth quarter results and momen-tum heading into 2012,” Jeremy Andrus, president and CEO, said in announcing the results. “We ended the best year in Skullcandy’s his-tory with strong net sales growth and sequential margin improve-ment. We made key acquisitions during the year and continue to make investments in critical areas of the business to support long-term growth, including product development, international expan-sion, interactive media and point of sale merchandising.”

Usana Usana Health Sciences Inc., based in West Valley City, reported net income of $13.2 million, or 87 cents per share, for the 2011 fourth quarter ended Dec. 31. That is up 6.2 percent from $12.4 million, or

75 cents per share, for the year-earlier quarter. Net sales totaled $145.9 mil-lion, compared with $137.5 million in the prior-year quarter. For the full year 2011, the company reported net income of $50.8 million, or a company-record $3.26 per share. That compares with $45.7 million, or $2.86 per share, for 2010. Net sales grew 12.4 percent to $581.9 million,

compared with $517.6 million in 2010. The company said 2011 marked the ninth consecutive year of record sales. “Usana’s 2011 record top-and-bottom-line results were the result of the significant effort put forth by our management team, employees and associates around the world to drive financial per-formance, despite the challenges

we faced during the year,” CEO Dave Wentz said in announcing the results. “Our planned market-specific promotions and events in the quarter contributed to our strong results and created positive momentum for the business going into 2012.” Usana develops and manufac-tures direct-sales nutritional, per-sonal care and weight-management products.

• Earnings Roundup •

The Enterprise Feb. 27-March 4, 20128

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Business today is more challenging, tasks more varied. People move constantly from focused individual work to one-on-one meetings, project sessions to impromptu collaborations, a series of planned and unplanned interactions throughout the day, and 5 o’clock is no longer day’s end for most workers with colleagues spread across time zones and countries. A recent IBM study of human resource executives found that 80 percent of organizations want workers to collaborate more. Given the increasingly distributed and mobile workforce, however, they aren’t quite sure how to do it: 78 percent of executives want their organizations to be better at it. Meanwhile, o�ces in every organization stand empty for hours each day simply because business has changed while o�ces have stagnated. Running a successful business requires teamwork and frequent collaboration, but rare is the o�ce that can ably host even a two-person meeting. Technology and tools are often hard to access and operate. Teams are needed to tackle most business problems, yet workers search in vain for meeting rooms and dedicated project space. Space in�uences behavior, so if you want people to share information, collaborate better and innovate more, you have to invest in the kinds of spaces that help them do that.Organizations have tried to o�er choices. A recent study of businesses throughout North America and Europe by Steelcase and CoreNet Global shows that 86 percent of companies o�er alternative work strategies such as home o�ces, hotelling and mobile work. The rationale is that technology is mobile, information can be accessed anywhere, and alternative work strategies can help support work-life balance. Yet few workers are rushing to set up shop o�-site. Nearly half of the companies reported that 10 percent or less of their employees regularly work remotely. In that same study, 72 percent of workers say the o�ce is the best place to interact with colleagues. It’s also the place to access tools and technology. Besides the need to choose how and where you work, people need a sense of participation in the collective enterprise, as well as a connection to the organization’s culture. The best place to meet all of these needs is the o�ce.

Grandeur Peak Global Advisors, Salt Lake City, said that the Grandeur Peak Funds, which were launched October 17, 2011, have already surpassed $100 mil-lion in assets under management. “As one of the first firms to tackle small/micro cap investing on a global scale, we weren’t sure how quickly the market would appreciate our global approach,” said Grandeur Peak CEO Robert Gardiner. “It takes a disciplined screen-ing process and a tremendous per-sonal travel commitment to sift through the 30,000+ companies that are in our consideration set globally,” added chief investment officer Blake Walker. “We are

finding great, relatively undiscov-ered companies all around the world and believe foreign micro caps are probably the single most interesting segment of the global equities landscape for the coming decade.” The Grandeur Peak six-per-son research team has logged trips to Asia, Europe, South America, North America, Australia, and Africa since the firm began just last year. This winter/spring the team has trips planned to Japan, India, Indonesia, Malaysia, Taiwan, Singapore, Hong Kong, U.K., Canada, Boston, Atlanta, Chicago, Los Angeles, and South Carolina, and will likely add other trips as well.

Startup investment fund has more than $100 million in assets under management

Hamilton Partners, Salt Lake City, has received approval from the Sandy City Planning Commission of a master plan for approximately 32 acres at roughly 120 E. Sego Lily Dr. Separate site plans will be submitted to the city on a phase-by-phase basis. According to a planning commission staff report, there have been several efforts over the years to master plan the Utah Transit Authority-owned property. Last year, UTA put out another request for proposals for groups interested in developing the property into a transit-oriented development. Hamilton Partners was selected. The overall project area is shown in the master plan to have a phased build-out over the next seven to 10 years. Hamilton is proposing approximately 1,185

residential units, 300,000 square feet of office space and 59,000 square feet of service retail. About 25 percent of the property would be preserved as open space. Phase I is proposed to have three mixed-use buildings totaling 250,000 square feet, consisting of 30,000 square feet of service retail space, 168 residential units and 340 structured parking stalls. Hamilton proposes to keep 570 existing UTA park and ride surface parking stalls, which would remove roughly 622 from the site to accommodate phase one. Eventually, the structured parking stalls that would be created in phase one would be shared with UTA patrons, allowing the other UTA surface stalls to be replaced with more mixed use development.

Sandy planners OK master plan for 32-acre project

• Industry Briefs • ACCOUNTING • Oni Ruiz, an accoun-tant with the Leverich Group, Salt Lake City, was one of four Westminster MBA students who won first place in Round 1 of the ACG Case Cup Competition on Feb. 15. Other team members were Daniel Reed Smith, David Pang and Ryan Schoenrock. Ruiz, a native of Venezuela, recently was awarded the 2010-2011 Scholarship from the Utah chapter of American Woman’s Society of Certified Public Accountants. Westminster’s win-ning team received a $1,000 cash prize and tickets to the Capital Connection Conference coming up in March (400 investors attend this event). The winning team will also compete at the state competi-tion on March 7, and will have the opportunity to win $5,000. BANKING

• Mountain America Credit Union was honored recently with two awards from the U.S. Small Business Administration’s Utah District — the 2011 Lender of the Year and the 2011 Blaine Andrus Memorial Award. The first award, SBA Lender of the Year Award (large lender cat-egory), recognizes larger finan-cial institutions for their business lending performance. The second award, which is named for Utah native Blaine Andrus, who helped lead the Utah SBA office until his death in December 2008, recog-nizes the credit union’s commu-nity efforts and the diversity of its small business lending programs. ECONOMIC INDICATORS • The just released Small Business Barometer from Western Union Payments reveals that 60 percent of small busi-

The EnterpriseFeb. 27-March 4, 2012 9

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nesses are funded by personal savings; control and creativity are cited as the best parts of owning a business. Revenue generation (46 percent) and positive cash flow (17 percent) are two issues that keep small business owners up at night. Fifty-five percent report forgetting to invoice a customer; 66 percent invoice late. Forty-two percent have past due invoices; 37 percent neglect other priorities to address collections; 16 percent don’t like the confrontation. • The International Franchise Association, based in Washington, D.C., forecasts a 5 percent rise in economic output by franchise businesses in 2012 — from $745 billion to $782 bil-lion. It also predicts a 1.9 percent jump in the number of franchise establishments and 2.1 percent increase in workers, which could result in an increase of 168,000 jobs nationally.

EDUCATION/TRAINING • To commemorate the found-ing of the University of Utah on Feb. 28, 1850, the University of Utah Alumni Association will celebrate the accomplishments of four outstanding graduates and one honorary alumnus at the annual Founders Day Banquet on Feb. 22 at The Little America Hotel, 500 S. Main St., Salt Lake City, beginning with a recep-tion at 6 p.m. and dinner at 7 p.m. This year’s recipients of the Distinguished Alumnus Award are actress Klea Blackhurst, BFA ‘85, businessman H. Roger Boyer, BS ‘65, former U vice president J. Michael Mattsson BS ‘60, and scientist Arthur L. Ruoff, Ph.D. ‘55. Gary Crocker, a Utah entrepreneur who founded Research Medical, will receive the Honorary Alumnus Award, in recognition of his support of the university. More information can be found at www.alumni.utah.edu/u-news/november11/founder-sday.php. • Allen Communication Learning Services, a Salt Lake City-based provider of custom corporate training and instruction-al design, has been named a 2012 Bersin & Associates Learning Leader in the Vendor Innovation in the Learning and Talent Management category. Allen is recognized for DesignJot, its iPad app designed to help instructional designers, trainers and perfor-mance consultants build better training. DesignJot includes two independent yet interrelated com-ponents — analysis and design. Allen recently released an update for the app that improves the exist-ing functionality and incorporates new functionality requested by users. The app is available for

download in the iTunes Store.

FINANCE • Paragon Wealth Management, a registered investment adviser firm based in Provo, launched a video series to complement its eBook titled Seven Steps for Building Wealth. The first video in the series was released Jan. 31. A new video will be released every Tuesday following that date on Paragon’s YouTube channel, YouTube.com/ParagonWealth. Three videos have been released. Four more will be released in the upcom-ing weeks. The Seven Steps for Building Wealth eBook is avail-able for download on Paragon Wealth Management’s website, www.paragonwealth.com, or in print version at no cost. • The Wayne Brown Institute is now accepting sub-missions from entrepreneurs for The Deal Forum on March 28 in Salt Lake City. The Deal Forum provides venture-based mentoring and advice from venture profes-sionals that help accelerate the growth of startup and early stage companies. Candidates should have a high growth potential of $30-$100 million a year in rev-enues after three to seven years, have sales or be quick to cash flow. The management should also have relevant experience in the industry. Through the Deal Forum process, all companies are reviewed by and given feedback from members of the angel and investment community. Selected companies are mentored on their lasting impressions, presentations and attractive deals. Along with being mentored, companies will also increase networking oppor-tunities, receive world-class edu-cation and are given a head start in investment opportunities. The two-hour event will begin at 3:30 p.m. in the Zions Bank Founder Room located on the 18th floor at 1 S. Main St., Salt Lake City. Those interested in submitting a deal to be considered for an upcom-ing Deal Forum or would like to attend should visit http://www.venturecapital.org/vc-events-deal-forum.

FOOD SERVICE • Nicholas & Co., a Salt Lake City food services firm, has revamped its website and cre-ated a presence on Facebook and Youtube. The website’s new functions include a virtual tour of the facility and relevant indus-try information, product catalogs, access to the past four issues of the FoodTrends magazine, prod-uct search and company oppor-tunities. Nicholas & Co. has cre-ated a presence on Facebook by

sharing community events, news and resources for its customers and partners. The Nicholas & Co. YouTube channel shares instruc-tional and informative videos that can be accessed through the web-site or the YouTube page. The videos assist customers with new products, innovations, menus and cost saving ideas.

GOVERNMENT • West Valley City has been presented with a certificate of

achievement for Excellence in Financial Reporting Award for the 2010-2011 fiscal year by the Utah chapter of the Government Finance Officers Association. It is the city’s 18th consecutive award from GFOA and its 19th overall. GFOA considers the cer-tificate of achievement the highest form of recognition in government accounting and financial report-ing. • Due to technical issues with an e-mail system last week,

any e-mail messages, appoint-ments or e-mail attachments sent to Utah Labor Commission offi-cers and employees between Feb 20 and Feb. 21 have been lost and more likely were not received by the Labor Commission. Those who have sent electronic com-munication to the commission probably have no indication that e-mail messages and attachments have not been received. The com-

continued on page 14

The Enterprise Feb. 27-March 4, 201210

On March 2, 1962, an unbreakable basketball record was set. I’m a Wilt Chamberlain fan. I have been since the late 1950s. Chamberlain grew up in Philadelphia. (I grew up in Philadelphia suburbs.) He went to Overbrook High School and then decided to go the University of Kansas. He dropped out of college after two seasons, and because in those days you could not enter professional basketball until after your senior class had gradu-ated, he played one-and-half years with the Harlem Globetrotters. In the summer of 1960, while I was attending Pine Forest (a sum-mer camp), Wilt came as a Harlem Globetrotter. (He had previously been a kitchen boy at the camp.) He put on a brief exhibition and signed autographs. I was 14. I had the presence of mind to ask Wilt for his autograph on a postcard. At camp we were required to write home every day. The postcard I sent home that day read: Dear Mom and Dad, I played ball with Wilt the Stilt today. Here’s his autograph. Please save this postcard. Love, Jeff My mother, rest her soul, saved the postcard for 25 years. I found it with all the other postcards and letters she had saved as I was going through her personal artifacts after she passed away. That was a moment all by itself. I don’t know the value of a 1960 Wilt Chamberlain authentic autograph, but I do know that if someone offered me $100,000, I would pass. Some things have no price in spite of the clichés you may have heard. Back to Wilt. You can argue the fact that Wilt was the best basketball player of all time. Many will agree. Many will disagree. I don’t really care about the people who disagree. Wilt Chamberlain’s records are still on the books. He was the only NBA player to score 4,000 points in a season. He set NBA single-game records for most points (100), most consecutive field goals (18), and most rebounds (55). His most mind-boggling stat was the 50.4 points per game he averaged during the 1961-62 season. He also aver-aged 48.5 minutes of play per game that same year (that’s every minute, of every game, plus overtime). Wilt entered the NBA as a Philadelphia Warrior (based on the territorial draft sys-tem that was in place at that time), briefly went to San Francisco when the Warriors went there, then rejoined Philadelphia as a 76er, and ended his career in Los Angeles as a Laker. When Wilt retired: • He was the all-time leader in career points with 31,419. (Later passed by Kareem Abdul-Jabbar, Karl Malone and Michael Jordan.) • He held the record for most rebounds with 23,924. (Will never be passed.) • He led the NBA in scoring for seven years in a row. Most games with 50+ points: 118. Most consecutive games with 40+ points: 14. Most consecutive games with 30+ points: 65. Most consecu-

tive games with 20+ points: 126. Highest rookie scoring average: 37.6 per game. Highest field goal percentage in a season: .727. (And with many of these records, the player in second place is far, far behind.) INTERESTING FACT ABOUT WILT: He never fouled out of a basketball game during the entire length of his career, yet he also led the league in blocked shots and rebounds. THE RECORD: On March 2, 1962,

while playing against the New York Knicks, in Hershey, Penn., in front of about 4,500 people, Wilt scored 100 points. It’s a record that is celebrating its 50th birth-day, and a record that will most likely never be broken. The game was untelevised. I listened to it on the radio. The reason I’m writing this

piece is that Wilt Chamberlain did not just set records, he set standards. His athletic prowess was so great that he changed the rules of the game. Wilt was so massive and such a great rebounder that they widened the foul lanes to prevent Wilt from complete basketball domination. He was a game changer AND a rule changer. What are you able to change about your career or process? What level are you playing at? Top, middle, or below average? What records are you setting that will last 50 years? What contributions have you made? Wilt Chamberlain was colorful and controversial. You either loved him or hated him. I loved him. Most people don’t realize that Wilt wasn’t just a basketball player, he was a world-class athlete. He set a state high school record in high jump, and after he retired from professional basketball, he won the two-man volleyball championship more than once. Please don’t confuse this article as just a tribute to the late, great Wilt Chamberlain. Rather, it’s a commentary on setting stan-dards, breaking records and the ability to have so much skill that the rules are changed to level the playing field. That’s what Wilt Chamberlain was to basketball. What standards have you set? If you’d like to see some amazing images of Wilt, including a copy of the postcard I sent to my parents back in 1960, go to www.gitomer.com and enter the word WILT in the GitBit box.

Jeffrey Gitomer is the author of The Sales Bible, Customer Satisfaction is Worthless Customer Loyalty is Priceless, The Little Red Book of Selling, The Little Red Book of Sales Answers, The Little Black Book of Connections, The Little Gold Book of YES! Attitude, The Little Green Book of Getting Your Way, The Little Platinum Book of Cha-Ching, The Little Teal Book of Trust, The Little Book of Leadership, and Social BOOM! His website, www.gitomer.com, will lead you to more information about training and seminars, or email him personally at salesman@gitomer.com.

© 2012 All Rights Reserved

Where are you in the game of sales? Setting standards? Making quota?

Jeffrey Gitomer

The Department of Labor is imple-menting new regulations for 401(k)s this year to address some longstanding issues. The intention is to make indirect plan costs visible and leave plan participants better informed. Beginning April 1, the DOL is requir-ing 401(k) plan sponsors to disclose fees and expenses related to the operation of the 401(k) to all plan participants. Specifically, the expense ratios of the funds within the plan must be disclosed, along with the amount per $1,000 that it would cost partic-ipants to be invested in a particular fund. A 2011 AARP survey found that 62 percent of 401(k) participants didn’t know how much they were paying in fees, demonstrating that this move may be long overdue. As a plan sponsor, the new regulations will impact you in three ways: • You now have to assume greater degrees of vigilance and dili-gence. • You will have a new obliga-tion to gauge the acceptability of the plan vendor’s fees and costs. • It will be wise to take a “total systems” view of your 401(k) and test it periodically to check that the “end users” are being well-served by the plan vendor’s offering. As a plan fiduciary, you will have three ongoing duties. These duties are required by the new DOL 408(b)(2) regula-tion. Periodically, you must: • Check to see that the plan vendor has sent you suitable fee and expense dis-closures. (This should be routine.) • Review these disclosures to make sure they conform to federal law. (Are you receiving sufficient information on fees and plan costs?) • Audit the plan with the input of an independent consultant to see if the fees are fair. (Is the existing service arrangement reasonable or are plan participants getting gouged?) In previous years, plan sponsors rou-tinely delegated these tasks. No more. If you fail to do this, it could constitute a breach of fiduciary responsibility.

The new rules — 408(b)(2) and 404(a)(5) — come out of concern that plan vendors may obscure avenues of indirect compensation as they communicate with plan sponsors. How can you step up and meet these new responsibilities? Employers will now have to look at their 401(k)s from a holis-tic perspective. It could be illuminating, it could be dismaying, as some businesses may learn that a plan vendor with whom they have had a long relationship has been less than forthcoming about certain fees and other factors. It is the right time to ask for help?

An experienced, independent retirement plan consultant can help you with an annual audit of the 401(k) fees and expenses, and contribute insights to help you meet these challenges and obligations with knowledge and confidence.

Mark Lund is a portfolio manage-ment specialist, investor coach, speaker and author of The Effective Investor. To get a free report

titled “8 Myths Killing Portfolio Performance” go to www.StonecreekWealthAdvisors.com. Lund offers investment management ser-vices through Stonecreek Wealth Advisors Inc. an independent fee-only Registered Investment Advisor Firm in Utah. He can be reached at 11650 So. State Street, Suite 360, Draper Utah 84020 or (801) 545-0696.All information is believed to be from reliable

sources; however we make no representation as to its completeness or accuracy. Please note: investing involves risk, and past performance

is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage

the services of a competent professional. This information should not be construed as invest-ment, tax or legal advice and may not be relied on for the purpose of avoiding any federal tax penalty. This is not a solicitation or a recom-mendation to purchase or sell any investment

or insurance product or service, and should not be relied upon as such. All indices are unman-aged and are not illustrative of any particular

investment.

Federal fee disclosure rules for 401(k)s

Mark Lund

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UTAH’S BUSINESS JOURNAL

The EnterpriseFeb. 27-March 4, 2012 11

Last week’s column talked about the rebound in U.S. manufacturing that is both under way and likely to continue. The American manufacturing sector is expected to add jobs in 2012 for the third consecutive year, after years of painful job eliminations. The column also focused on some of the “common wisdoms” about manufacturing, U.S.-made auto quality and other issues that further inspection shows to be misguided. Another common wisdom: The United Stares and other major manufac-turing nations simply cannot compete with the extremely low costs of “doing business” in China when it comes to manufacturing. Times they are a changin.’ The Boston Consulting Group (BCG) in a recent study of global manufacturing noted that Chinese wage rates are rising at about 17 percent per year, while the Chinese currency, the yuan, continues to rise in value, signifi-cantly reducing that nation’s prior competitive advantage At the same time, a powerful shift is under way within the U.S. The BCG study noted that in 2000, China’s average wage rate, adjusted for productivity, was 36 percent of that in the U.S. By the end of 2010, that gap had shrunk to 48 percent, with a BCG estimate that it will be 69 percent in 2015. To note Hal Serkin of BCG, “the spread is getting down to a smaller and smaller number. Increasingly what you’re seeing [in cor-porate boardrooms] is a discussion not necessarily about closing production in China but about ‘where will I locate my next plant?’”

Simply More Competitive More flexible U.S. work rules, lower labor and land costs, higher global fuel and transportation costs and financial incentives from many local communi-ties and states have made the U.S. much more competitive as a low-cost base for supplying the American market (The Agurban). Consulting firm AlixPartners reported that in 2005, Chinese-produced parts arrived at U.S. destinations an aver-age of 22 percent cheaper than compa-rable products domestically. By the end of 2008, the average price gap had dropped to 5.5 percent (Jones Lang LaSalle). That differential has no doubt been eliminated since then. It brings into question the need to justify the risk and complexity of pro-ducing halfway around the world. In addition, the issue of Chinese piracy of technology, theft of intellectual property and massive turnover of key per-sonnel makes life difficult half a world away. Chinese authorities talk of the need to protect global patents and limit illegal and counterfeit products. Good luck with that one. A story in Time magazine notes that the average manufacturing wage in China is still only about $3.10 hourly, compared to $22.30 in the U.S. In the eastern part of China it is up to 50 percent more than that. For the vast majority of companies, whether small, medium-size or huge mul-tinationals, the decision about where to produce a product is always driven by multiple factors, of which the cost of

labor is but one. “For lots of companies over the past two decades, the disparity was such that labor costs often drove the decision,” notes economist Daniel Rosen, the China director and principal of the Rhodium Group, a New York city-based consulting firm. “Now, increasingly, that’s no longer the case.”

In the Neighborhood As one might expect, China has many competitors when it comes to the low wage game. Such nations as Vietnam, India, Laos and Cambodia are attracting some of the cheapest labor manufacturing operations.

At the same time, China will remain a dominant player. The enormous size of its popula-tion, its rising consumer afflu-ence and spending power and its stature as an enormous market of opportunity for companies to sell products from A to Z won’t change.

A Vast Chinese Market It is one thing to (1) manu-facture goods in China with the

intent of then shipping those goods to the U.S. or Europe, and (2) produce with the intent of selling such goods in a rapidly expanding Chinese consumer market. The second option will drive much of the global investment into Chinese manufac-turing in coming years. Rapidly expand-ing Chinese wages, including a sharp increase in the minimum wage in recent years, bodes well for rising demand for Chinese-produced goods across China. Such rising affluence also boosts oppor-tunities for U.S. and other manufacturers and service providers (such as Coke and KFC) to establish or expand operations in China. The same Time magazine article noted that in a survey eight years ago, 75 percent of the members of the American Chamber of Commerce in South China were focused mainly on exports. Today, 75 percent of such members are primarily focused on serving the rapidly expanding Chinese market.

Mexico I will talk in coming weeks about the rising role likely to be played by Mexico as an alternative to Chinese and Asian production of goods destined for the U.S. Given the rise in transportation costs, can you say $100+ oil? Mexico is likely to gain more U.S. manufacturing, as will many communities across the U.S. The fact that goods produced in Mexico can reach most of the U.S. within a day or two versus at least 21 days by container ship from China is a significant advantage (The Agurban). At the same time, the voracious violence between Mexican drug cartels, the police and the military, combined with limited skills availability and poor infrastructure, will limit Mexican manufacturing gains.

Jeff Thredgold is the only economist in the world to have ever earned the CSP (Certified Speaking Professional) inter-national designation, the highest earned designation in professional speaking. He is the author of econAmerica, released by major publisher Wiley & Sons, and serves as economic consultant to Zions Bank.

Renaissance manufacturing, part two

Jeff Thredgold

I’m on an airplane returning from an engagement in Orlando, where I addressed the members of the Independent Jewelers Organization. And while they are all inde-pendent, they have two things in common. They’re all jewelers, and they all act alike. And in this case, that’s good. As a marketing speaker, I address groups all over North America, and I have noticed a very interesting phenomenon. All groups act alike. Every group takes on a personality of its own. And I have to say, seldom is this fact remarkable. But the IJO crowd is different. The IJO members are a serious group of professionals who are dedicated to growing their individual business-es. They are individually open to, and actively seeking, better answers and better solutions to better their enterprises. And they are collectively finding those answers. IJO only accepts one member in any given geographic area. This encourages the members to be willing to share their suc-cesses, because they don’t fear competitive “poaching.” How did I get the gig? One of my very best and most successful clients, Ashley Miller, the owner of Green’s Jewelers in Roxoboro, N.C., referred me to the group with a strong recommendation because Ashley grew her business, well over 30 per-cent in the first year she worked with me and increased by double-digits again the second year. (Her Valentines sales were up 25 per-cent alone this year.) So Ashley wanted to share me with her colleagues. You don’t see that in other groups all that much. What is even more impressive about IJO members is their propensity to take immediate action. I’m a good speaker and my addresses are generally well received by all kinds of audiences. But while every group has its go-getters who embrace and act, what impresses me about the IJO crowd is the sheer volume of go-getters. Within minutes of the conclusion of my first session, all the promotional materials I had brought for all my sessions were almost instantly snatched up. I was deluged by people asking for appointments, more infor-mation and how to directly and immediately benefit from what I had to offer. Don’t misunderstand. Of course this is flattering to a speaker, but I’m not blowing my horn here, I’m blowing theirs. Most groups are far more timid. Most groups actually fear following through. I’m not sure whether it’s fear of being “sold” something, or fear of not being able to suc-ceed. But it is fear, and it’s often almost pal-pable. It’s ironic that they join these various groups, ostensibly to improve their business acumen, but balk at going all the way to actu-ally doing it, especially in the most vital area of their business for their long-term success — marketing. Why this phenomenon of homogeny in groups? Is it simply that birds of a feather flock together? Well, perhaps to a degree. But I believe that it’s more than that.

I believe that every group is a reflection of its leadership. From a group as small as a couple or families to our national society at large. And I believe this all happens quite naturally and automatically, regardless of whether the members of the group even think they’re a member of the group or are consciously aware that they are. For example, do we think of ourselves as part of a collective? Well, on some level.

We claim to be “Americans,” for example. But do we realize that we “Americans all act alike?” Don’t believe me? Ask the French. And we all know all the French act alike. You see, we’re trained by our leadership to believe, think, talk and act certain ways. For example, perhaps Bill Clinton’s biggest (notice I did not say great-

est) legacy to the country — and I have to say Congress and his party were complicit in this — is that he made it OK for all of us to cheat on our spouses and lie about it. I’m dead serious about this. Bill Clinton got caught with his pants down — literally — and we as a society, through our press, Congress and political process, decided to look the other way and say “no big deal.” Since then we have had all kinds of scandals, some with consequences, some without, but generally it appears we’ve all said “no big deal.” But what is the marketing lesson for all of this? You have a group that is affiliated with you. They’re your customers. And for the most part, they all act alike. You’re the leader of this group. They act, toward you, the way you’ve taught them to act. Are they always asking for discounts? You taught them that. They don’t do that with other merchants, because when they’re doing business with another, they’re part of that group, and the other merchants have taught them not to ask for discounts. Do they buy from you frequently enough or not? Whichever it is, you’ve programmed them to act that way. Do they trust you? Do they always have to “think about it?” Is each transaction large enough and do they say yes when you ask them to add something on, in their own best interest? Whatever your answers to these questions, you’ve taught them to act that way. Now, if you like the answers to all those questions, this principle is a powerful advan-tage for you. If you don’t like the answers, you’ve got a problem. Because once a group develops a personality, it’s tough to change it. Like steering an aircraft carrier, group behavior doesn’t turn on a dime. It takes a long time. But the good news is the ship can be steered. You start by reprogramming yourself: the way you talk to your group, the frequen-cy with which you interact with them, the stories you tell them, the examples you hold

Great minds act alike, and so do non-great minds

Jim Ackerman

see ACKERMAN next page

The Enterprise Feb. 27-March 4, 201212

up, the messages of expectation you send. In short, the relation-ship you develop with them. It will take time, but through a dedicated, consistent effort, you can have the IJO of clientele. A group that will enthusiastically embrace and endorse you; a group that will trust you and buy from you; a group that will love you and each other. And you, and each member of your group, will pros-per together.

Jim Ackerman is a Salt Lake City-based marketing speaker, marketing coach, author and ad writer. For his speaking services, go to www.marketingspeakerji-mackerman.com Subscribe to his VLOGS at www.YouTube.com/MarketingSpeakerJimA, where you get a video marketing tip of the day, and at www.YouTube.com/GoodBadnUglyAds, where Ackerman does a weekly ad cri-tique and lets you do the same.

©2012, Jim Ackerman, All Rights Reserved

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ACKERMANfrom previous page

There is more than one satisfactory solution to a pros-pect’s needs. Many products are equally good and several com-petitor companies can have stel-lar reputations. Guarantees and warrantees can be similar and service is frequently overstated. Every salesperson offers the lowest price, the best quality, excellent service and the perfect solution. With everyone looking the same, the only differ-ence in the sales equation is you. Let me take a few minutes and talk about five principles that will set you apart from your competition. • Listen to your prospect. Most salespeople tell, thinking that telling is selling. If you will take the time to listen to what the prospect is telling you, you will know what is important to them. Once you know what is important to them, you can tailor your presentation to their needs. • Understand their situation. Know precisely what they need to solve their problem. Ask insight-ful and probing questions. Don’t just respond to the first need they present to you. Discover the whole picture so you know how the solu-tion to this specific need fits with the big picture. • Treat your prospect’s com-pany as if it were your own. What would you do? What would be the best solution to their problem from your perspective? Help them assess the relationship between price, quality and service. • Evaluate all possible solu-tions and make sure you pres-ent the most viable solution. If your product is not the best solu-tion, make a recommendation and move on. They will respect you for your honesty and probably give you an opportunity to solve future needs. • Through effective ques-tioning, seek to understand the

prospect’s position relating to price and quality. Very often the prospect becomes so focused on price that they sacrifice value. Lowest price in most cases is not lowest cost. Price is what the prospect pays for the product and cost is their total investment using

that product. A salesper-son can offer the low-est cost to the customer and yet have the highest initial price. Make sure you understand what they need and they understand what you are offering. • There is service and then there is real service. Real service involves you, the salesperson. It requires your involve-

ment with the customer to insure they are happy and satisfied with their decision to purchase from you. No one else is responsi-ble for your customer, only you. The buck stops here. Others may be involved, but the happiness of your customer rests on your shoulders. When they know that you care, they will be around for a long time. The difference between you and every other salesperson is not price, quality or service, it is you. The difference is found in your ability to solve their problems and your sincere concern for their situ-ation. The customer knows if you care about them, and caring makes all the difference in the world. When all things are equal, it is the salesperson that makes the differ-ence. Apply these five principles and enjoy the difference.

Tim Huffaker is the president of The Business Performance Group, a sales training and coaching firm headquartered in Salt Lake City. The company teaches core sales principles and skills, allowing cli-ents to double their sales. Huffaker is the author of hundreds of sales articles and can be contacted at (801) 557-4571 or tim@bpgutah.com.

In the world of sales, when all things appear equal, the difference is you

Tim Huffaker

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• Calendar • • Feb. 28, 1 a.m.-noon: “Leading Organizational Transformation - Evolve to a Higher Level of Sustained Performance,” sponsored by The Employers Council. John Lee, president of Alpha Quality Consulting, will provide an under-standing of the art and science of leading change. Topics to be covered include why transforma-tion is necessary; basic model of organization transformation; fun-damental elements of organiza-tional transformation: personal transformation, cultural trans-formation and tools transforma-tion; what a functional organiza-tional culture looks like; who is responsible for cultural change; and how to become influential enough to change organizational culture. Location is the Radisson Hotel, 215 S. West Temple, Salt Lake City. Cost is $129 for coun-cil members, $209 for nonmem-bers, and includes a full breakfast buffet beginning at 7:30 a.m. in addition to materials and parking. Enrollment is limited. Download the registration form at http://ecu-tah.org/2012springleadership.pdf. • Feb. 28, 5:30 p.m.: Salt Lake City Entrepreneur Circle Meetup. Speakers will be Park City residents Susan and David Odell, who transitioned from careers at KPMG and Barclay Capital into being owners of an online food business. Location is the University of Utah’s Technology Commercialization Office, Fort Douglas Officers’ Club, 150 S. Fort Douglas Blvd., Salt Lake City. Networking will begin at 5:30 followed by the Odells at 6:30. Free, but attendees must register at http://www.bit.ly/FebMeetup. • March 6, 7 p.m.: “What’s

Next? Unconventional Wisdom on the Future of the World Economy,” presented by Westminster College and the Utah Council for Citizen Diplomacy. The lecture will be presented by Lyric Hughes Hale, an accom-plished China analyst and speak-er. She is the editor in chief of EconVue Inc. Location is the Vieve Gore Concert Hall in the Emma Eccles Jones Conservatory at Westminster College, 1840 S. 1300 E., Salt Lake City. Free. • March 9, 7:15 a.m.-4:30 p.m.: 2012 Association for Corporate Growth Utah Intermountain Growth Conference and ACG Capital Connection. Breakfast keynote speaker will be George Feiger of Contango Capital Advisors. Lunch keynote speak-er will be Urban Meyer, former Florida Gators and Utah Utes coach and two-time BCS National Championship winner (subject to Ohio State schedule). The event will provide opportunity for busi-ness owners, executives, devel-opment officers, intermediaries and service providers in Utah to network, learn about how to maxi-mize growth opportunities and to meet with the principals of more than 30 Utah-focused private equi-ty groups and mezzanine lenders representing billions of dollars of growth and buyout capital, includ-ing Serent Capital, Sorenson Capital, Valor Equity Partners and Weston Presidio. There will be a number of workshops. Location is the Grand America Hotel, 500 S. Main St., Salt Lake City. Cost ranges from $200 to $250 based on early-bird registration and the registrant’s affiliation with certain other industry groups. Register at http://www.acg.org/utah/2012conferenceagenda.aspx.

• March 13, 8-9 a.m.: “The State of the Economy,” spon-sored by Bank of Utah and the Economic Development Corp. of Utah. Guest speaker will be Lt. Gov. Greg Bell. Bank of Utah president Douglas L. DeFries will host the event and provide his per-spective on the economy. Location is the Marriott City Center, 220 S. Main St., Salt Lake City. Free for Bank of Utah customers. Those who are not Bank of Utah cus-tomers pay $20. A breakfast buf-fet will begin at 7:30 a.m. Self-parking will be free. Register at https://www.bankofutah.com/eco-nomic_breakfast.html. • March 21, 11:30 a.m.-1 p.m.: Society of Marketing Professional Services Utah Chapter Networking Event. Those in the architectural, engi-neering and construction indus-tries are encouraged to attend. Speakers will include Todd Provost from the Utah Transit Authority and Terry Johnson from the Utah Department of Transportation. Location is the Little America Hotel, 500 S. Main St., Salt Lake City. For cost information and to register, visit www.smpsutah.org. • March 21, 8 a.m.-4:30 p.m: ARC FLASH Compliance Training, hosted by Hunt Electric. Participants will learn how to reduce the chances of violating OSHA rules when it comes to electrical safety. Instructor will be Joseph Gierlach Jr., vice president of technical training and support at TEGG Corp. He will be available to answer questions. Location is the Hunt Electric Training Center, 1863 W. Alexander St. (2410 S.), West Valley City. Cost is $140 if registered by March 14, $160 thereafter. The cost is $120 per person for groups of five or more

from the same company. Sign-in begins at 7:20 a.m. A continental breakfast and lunch will be pro-vided, along with a certificate of participation. Register at www.huntelectric.com/training.htm or by calling Cheri Holbrook at (801) 975-8844 ext. 8851. • April 8, 6 p.m.: Salt Lake Chamber 125th Anniversary Gala. Location is the Grand America Hotel, 555 S. Main St., Salt Lake City. Cost is $100 per person. A reception will begin at 6 p.m. followed by dinner and a pro-gram at 7 p.m. For more informa-tion, visit www.slchamber.com.

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mission is strongly encouraging everyone to re-send information or messages sent to it between Feb. 20-21.

HEALTH CARE • Utah business and com-munity leader Douglas C. Black has been appointed chairman of the board of SelectHealth, Salt Lake City, effective April 14. The SelectHealth board is comprised of 15 individuals who volunteer their time without pay to direct the nonprofit organization. Black is vice chairman of Intermountain Healthcare’s board of trustees. SelectHealth is a nonprofit health insurance organization serving members in Utah and Idaho. It is a subsidiary of Intermountain Healthcare, Salt Lake City.

HOSPITALITY • R&O Construction, Ogden, has completed a new Springhill Suites by Marriott at 12105 S. Factory Outlet Dr. in Draper. It opened on Feb. 24. R&O’s scope of work included construction of the hotel, site improvements, underground utili-ties, exterior lighting and land-scaping. The four-story hotel has 124 suite-size rooms in a 72,581 square foot building on a 2.5-acre site. Amenities include a compli-mentary hot breakfast, pool, hot tub and meeting space for large or small groups. Woodbury Corp., Salt Lake City, will own and oper-ate the hotel. Rates begin at $139 per night. • The 125 year-old Homestead Resort, Midway, is in the midst of a four-month clo-sure while significant upgrades are made to the lodging and rec-reation properties. Multiple guest room enhancements include replacing mattresses, which has given the Legacy Resorts-owned and Gemstone Hotels & Resorts-managed property the opportunity to give back to the community. The Homestead selected various local nonprofit organizations to

receive a donation of 150 mat-tresses. The recipients include St. Lawrence Catholic Church, Wasatch County School District’s Refugee Program, the Salvation Army, various Latter Day Saints wards and employees. All mat-tresses that were deemed in good condition were donated.

MANUFACTURING • Profire Energy Inc., Lindon, has experienced the second highest growth rate percentage, as calculated by the International Business Times, among com-panies listed in the Energy Equipment and Services Industry in the first annual International Business Times IBT 1000 World’s Fastest Growing Companies list. Profire Energy ranked No. 380 overall among all companies list-ed. Profire is a manufacturer and installer of oilfield combustion management systems and related burner products. • Vandor LLC, a Salt Lake City designer, marketer and dis-tributor of licensed consumer goods, reported a record 36 per-cent increase in revenues in 2011 over the previous year. Vandor features a roster of A-list licensed properties including Star Wars, The Beatles, John Wayne, Dr. Seuss, Elvis Presley, Hello Kitty and Marvel Comics. Images of these cultural icons adorn prod-ucts such as drinkware, stationery, totes and home décor.

MEDIA/MARKETING • Scandinavian apparel maker Bergans of Norway and startup premium sport trailer man-ufacturer Road Warrior Sports have named What’s UP Public Relations, Denver, and SOAR Communications, Salt Lake City, as agency of record to promote and establish the brands in the U.S. While both agencies focus primar-ily on public relations, the new partnership has opened opportuni-ties for What’s UP PR clients to access SOAR’s broader marketing and creative services, and existing SOAR clients are benefiting from What’s UP’s history in the snows-

ports industry and media relation-ships. • The Utah Office of Tourism has lowered the price on its 2012 official scenic calendar. Copies are now available for $7 each at www.visitutah.com or at the Zion Natural History Association book-store at Council Hall, 300 N. State St., Salt Lake City, Utah 84114. More information is available at (801) 538-1900 or (800) 200-1160. In its 40th year, the calendar program is aimed at promoting Utah’s scenic attractions, outdoor activities and events through pho-tography and graphic design. This year’s calendar features a cover photo of Delicate Arch taken by Utah photographer Scott T. Smith. Other photos highlight Utah’s national and state parks, national monuments, ski resorts, national forests and other attractions. This year’s calendar was designed by graphic artist Scott Hardy, who has worked on the state’s scenic calen-dars for the past 26 years. Twenty thousand copies were printed by Rastar in West Valley City. The Utah scenic calendar is recognized annually for design and photogra-phy. The 2011 edition was honored with 13 awards in the National and World Calendar Awards competi-tion, including a Gold Award for Best Graphic Design. REAL ESTATE • NAI WEST president Mike Falk, director of corporate servic-es David Bauman, and vice presi-dent Jason Smith received Elite Global Top Producer awards at NAI Global’s annual conference held recently in Las Vegas. The award recognizes the top 1 percent of 5,000 candidates in 350 global offices. Falk and his team, who are consistently recognized as top producers, were awarded Platinum Elite Producer for generating more than $25 million in assignments to other global offices in 2011. Bauman and Smith, as members of the Global Corporate Solutions team that operates from the NAI WEST offices in Salt Lake City, were both honored for their 2011 production. The Salt Lake City team is consistently recognized as one of the top producing groups in the NAI Global network. Bauman was named a Gold Elite member and Smith an Elite member for their team’s work making more than $18 million in global assign-ments. • Park City resident and Main Street commercial property devel-oper Kenneth Abdalla has entered into a contract to acquire the Sky Lodge Resort Hotel in Park City. The acquisition is the culmina-tion of nearly a year of effort by Abdalla and his team to acquire the Sky Lodge and several other

Main Street commercial buildings in order to form a portfolio of properties.

RESTAURANTS • Costa Vida Fresh Mexican Grill, Salt Lake City, one of the nation’s fastest growing fast casual dining concepts, achieved 74 percent unit growth for its fiscal year 2011. In 2010, Costa Vida reached an agreement to aggressively convert many of the Bajio Mexican Grill restaurants to the Costa Vida brand. With those conversions, plus new stores in new markets, Costa Vida opened 17 locations throughout Utah, Arizona, Idaho, Missouri and Washington. The 39th and 40th units opened in Missouri and Utah, respectively.

RETAIL • Minneapolis-based Target plans to open a new store in West Valley City in July 2012. The store will be one of the 20 stores the company plans to open in 2012, including the first five CityTarget locations. The new store, located near 5600 West Street and Lake Park Boulevard, will offer shop-pers what they have come to expect from Target, in addition to a selection of fresh produce, fresh packaged meat and pre-packaged baked goods. The store will be approximately 135,000 square feet and employ approximately 200 team members. • Harmons Grocery Stores is sponsoring its 18th Annual Frozen Food Month in March to ben-efit Special Olympics Utah. The family-owned and operated grocer hopes to raise $200,000 to support the charity’s educational programs and athletic events for Utahns with intellectual disabilities. Beginning Feb. 27 and throughout March, Harmons is encouraging the com-munity to buy frozen food at its 16 stores and Harmons will donate a percentage of its frozen food net sales to the charity. Customers can also donate $1, $3 or $5 at cash registers, and purchase root beer floats on the weekends to benefit individual teams.

SECURITY/DEFENSE • The Center for Security Policy in Washington, D.C., said President Obama’s 2013 budget would not allow Utah businesses to escape the 9 and 18 percent cuts in defense. The center said public data for 2010 shows Utah businesses earned over $2.66 bil-lion supporting America’s defense, but under the 10-year defense cuts of at least 9 percent, Utah annual business losses could be greater than $239 million. And at the “sequestration” level of at least 18 percent in defense cuts, Utah

annual business losses could be greater than $478 million. For more information, visit www.forthecommondefense.org.

SERVICES • The Salt Lake City office of Protiviti Inc., a global consulting firm, has promoted Daniel Hansen, Tyler Jacobsen, Ben West and Scott Grygla. Hansen is now associate director in the Internal Audit and Financial Controls solution. He was previously a senior manager. Jacobsen has been promoted to senior manager in the Internal Audit and Financial Controls solution. West has been promoted to senior manager in the IT Consulting solution. They were previously managers. Grygla has been promoted to manager in the Internal Audit and Financial Controls solution. He was previously a senior consultant. Proviviti helps companies solve problems in finance, technology, operations, governance, risk and internal audit.

TRANSPORTATION • Two Men and a Truck of Greater Salt Lake assisted nonprofit organizations and families in need by providing 134 hours in donated moves in 2011. The in-kind donation equates to more than $7,000 worth of moving services. In addition, the firm organized Truckload of Warmth that benefited Road Home, Crossroads Urban Center and Mothers without Borders. Two Men and a Truck bills itself as the largest franchised moving company in North America, with more than 200 locations and more than 1,300 trucks on the road. Each location is independently owned and operated.

TRAVEL/TOURISM • Gov. Gary R. Herbert has appointed a new chairman and vice-chairman to the Board of Tourism Development following the recent addition of two new members and the reappointment of five others to the board. The new chairman is Joel Racker, president and chief executive officer of the Utah Valley Convention and Visitors Bureau Inc. (UVCVB) in Provo, who represents Utah, Summit, Juab and Wasatch counties. Nathan Rafferty, president of Ski Utah, has been appointed as the vice-chairman. The 13-member policy board works with the Utah Office of Tourism, an agency of the Governor’s Office of Economic Development. Board members oversee the state’s $7 million Tourism Marketing Performance Fund that is used to promote the Utah Life Elevated brand to out-of-state visitors.

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During a recent Fox News Channel debate about the Obama administration’s tax policies, Democrat Bob Beckel raised the issue of “fairness.” He pointed out that a child born to a poor woman in the Bronx enters the world with far worse prospects than a child born to an affluent couple in Connecticut. No one can deny that. The relevant ques-tion, however, is: How does allowing politicians to take more money in taxes from successful peo-ple, to squander in ways that will improve their own reelec-tion prospects, make anything more “fair” for others? Even if additional tax rev-enue all went to poor single moth-ers — which it will not — the multiple problems of children raised by poor single mothers would not be cured by throwing money at them. Indeed, the sky-rocketing of unwed motherhood began when government welfare

programs began throwing money at teenage girls who got pregnant. Children born and raised without fathers are a major prob-lem to society and to themselves. There is nothing “fair” about increasing the number of such

children. A more fundamental problem with the “fair-ness” issue raised by Beckel and many others is the slippery vague-ness of the word “fair.” To ask whether life is fair — either here and

now, or at any time or place around the world,

over the past several thousand years — is to ask a question whose answer is obvious. Life has sel-dom been within shouting dis-tance of fair, in the sense of even approximately equal prospects of success. Countries whose politi-cians have been able to squander ever larger amounts of a nation’s resources have not only failed to make the world more fair, the con-

centration of more resources and power in these politicians’ hands has led to results that were often counterproductive at best, and bloodily catastrophic at worst. More fundamentally, the question whether life is fair is very different from the question wheth-er a given society’s rules are fair. Society’s rules can be fair in the sense of using the same standards of rewards and punishments for everyone. But that barely scratch-es the surface of making prospects or outcomes the same. People raised in different homes, neighborhoods and cul-tures are going to behave dif-ferently — and those differences have consequences. The multi-culturalist dogma may say that all cultures are equal, or equally deserving of respect, but treat-ing cultures as sacrosanct freezes people into the circumstances into which they happened to be born, much like a caste system. While talk about “fairness” may provide a fig leaf to cover

politicians’ naked attempts to grab more and more of the nation’s resources to spend, there is no assurance that raising tax rates on “the rich” will result in any more tax revenue for the government. High tax rates have too often sim-ply caused wealthy people to put their money into tax-free securi-ties or to send it overseas. Four years ago, TV inter-viewer Charles Gibson pointed out to candidate Barack Obama that raising capital gains tax rates had on a number of occasions led to less capital gains tax rev-enue being collected — and, con-versely, lowering the capital gains tax rates had on other occasions increased the amount of capital gains revenue collected by the government. Obama readily admitted that. But he said that “fairness” justi-fied a higher tax rate on “the rich.” Yet how does a higher tax rate on paper, without a real increase in the amount of taxes actually col-lected, promote fairness?

However, raising tax rates on “the rich” pays off politically, even if the government loses revenues when the rich put their money into tax shelters. High tax rates in the upper income brackets allow politicians to win votes with class warfare rhetoric, painting their oppo-nents as defenders of the rich. Meanwhile, the same politicians can win donations from the rich by creating tax loopholes that can keep the rich from actually paying those higher tax rates — or per-haps any taxes at all. What is worse than class warfare is phony class warfare. Slippery talk about “fairness” is at the heart of this fraud by politi-cians seeking to squander more of the nation’s resources.

Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University, Stanford, CA 94305.

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The 'fairness' fraud

Thomas Sowell

What is most striking about the showdown over contracep-tive freedom is not the politi-cal victory that President Obama earned by standing up for wom-en’s reproductive rights, although his Republican adversaries are certainly helping him to make the most of it. Those adversaries don’t seem to realize they have fallen into a trap, whether the White House set them up intentionally or not. While the Catholic bishops and their allies on the religious right insist that this is an argument over the First Amendment, their true, longstanding purpose now stands revealed to the public. They would begin by imposing their dogma on every woman unlucky enough to work for an employer who shares it — an agenda that is deeply unpopular even among the

Catholic faithful, let alone the rest of the American electorate. Then they would impose it on everyone, as the theorists of the religious right suggest every time they deny the separation of church and state. The bishops have nothing to

lose except their flock, whose respect for the hierarchy has plunged anyway over its resis-tance to reform and its failure to punish abuses far graver and more sin-ful than contraception. If they had to stand for elec-tion, not many of them would be left standing.

And if they had to face a referen-dum on this current matter, they would lose resoundingly to the president, according to the latest survey data. In a poll taken this month for the Coalition to Protect Women’s Health Care, Public Policy Polling

found that 57 percent of Catholic voters endorse the Obama “com-promise” that would ensure contin-ued prescription birth control for women working in religious insti-tutions, without requiring those institutions to pay directly for that coverage. Only 29 percent sided with the bishops, the religious right and the Republicans, while 5 percent actually think the reli-gious institutions should pay for contraceptive coverage regardless of their doctrine. The cross-tabs of the PPP poll show that Latino Catholics, Catholic independent voters and Catholic women sup-port the Obama solution by wide margins. (The most recent poll by Fox News Channel shows the same overwhelming approval for the president’s position among the general public, with 61 percent of voters on his side versus only 34 percent against.)

Those statistics are no threat to the bishops, of course, but rep-resent a profound problem for the Republican leaders and candidates who have signed up for this male geriatric crusade against moder-nity. Mitt Romney, for instance, seems to believe that by stok-ing evangelical paranoia about a supposed “war on religion” by Obama, he will subdue evangeli-cal paranoia about his Mormonism (which, by the way, expressly per-mits birth control). His pandering commenced when he announced his 2012 candidacy, but grew still more intense this week when he accused the president of perpetrat-ing an “assault” on religion. Such tactics are unlikely to placate the prejudices arrayed against Romney — and even if they did, he will pay a very high price next fall for joining the angriest and most extreme

culture warriors on this issue. Congressional Republicans will be courting the same danger if, as promised, they propose legislation that would overturn the Obama compromise and deprive women working for religious institutions of equal rights to contraceptive services. The president should hold fast. He has proved that it is pos-sible to uphold the principle of full access to birth control, which has been the pro-family social policy of the American majority for half a century, while respect-ing the religious convictions of all Americans. The wild ranting of his enemies is only helping him now — and may yet ruin them in November.

Joe Conason is the editor in chief of NationalMemo.com.

Copyright 2012Creators.com.

Will Catholic bishops and the religious right save Obama?

Joe Conason

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