July 2012 Business Magazine by MBA Business Magazine

BUSINESS M A G A Z I N E Manufacturer & Business Association

VOLUME XXV, NUMBER 7

JULY 2012

速

21 52$5 7+( 6th Annual Bike Rally Fuels Local Economy

Organizers Estimate More Than 100,000 Visitors to Inject Tens of Millions of Dollars into Region in 2012 / Page 10

21 52$5 7+( July 2012

Blue Ocean Strategy Center

EDITORIAL >

FEATURES >

How you can stay covered with individual health insurance.

Donald Hester, president and CEO of MAJR Products Corporation, discusses the Saegertown, Pennsylvania manufacturer’s products and services, as well as his recent appointment to the Manufacturer & Business Association’s Board of Governors.

7 / Health Matters ANDREA GIOIA

9 / Legal Brief

Strategies for charitable giving in a low interest rate environment. JAMES E. SPODEN

22 / Blue Ocean Strategy

Why it’s important to get strategic sequencing right in order to reduce your risks with new products and services. ANGIE ANGUS

Events

ciation & Business Asso Manufacturer ion Annual Event l tion’s Centra Central PA Divis & Business Associa on May

The Manufacturer n Annual Event was held Divisio in Williamsport. Pennsylvania i Hotel & Suites attended the 15 at the Genett than 100 people , Inc., A crowd of more sponsored by Data Papers political networking event, s delivered by prominent addres with keynote Morris. consultant Dick

Wertz, president s. Chairman Jerry Advisory Board as master of ceremonie Papers, served MBA Central Division sponsor Data of Annual Event

Blue Ocean Strategy

Center

MBA Barbara Deist, s, Sherry Cline, Board Sunburst Electronic , and former MBA John Cline of Deist Industries the event. MBA Board MemberChairman Dale Deist of & Mfg. attended Board of Governors of Industrial Sales Rutkowski Jr. Member James

to Locco Award first Central Division School, shown High n presented the The Associatio (center) of Williamsport Area r. Hostrander r Ryan Hostrande and Karen Hostrande y and earn a Technolog parents Michael here with his nia College of the Pennsylva engineering. plans to attend technology and degree in welding

3 / Spotlight

10 / 6th Annual Roar on the Shore®

Business and community leaders explain why this annual bike rally is good for businesses and the Erie region by injecting tens of millions of dollars into the local economy.

23 / On the Hill

Anna McCauslin, the Manufacturer & Business Association’s state government relations representative in Harrisburg, talks about the need to keep competitiveness in focus and what Pennsylvania can do to be a better friend to business.

Magazine, copy of the Businessn. a complimentary o-business publicatio Each guest received n’s monthly business-t the Associatio

24 / MBA Central Pennsylvania Division Annual Event Central Division

Steel Phillips of Radiant Member Andree Morris to Willliamsport. Advisory Board Dick ker welcome MBA Central Division and Rick Fenstama Products Company

EVENTS > with former MBA Dick Morris mingles reception. Keynote speaker cocktail Sheets at the Member Roger 2012

Advisory Board

.com < July

abizmag 24 < www.mb

See photo coverage from the Manufacturer & Business Association’s Annual Event in Williamsport featuring keynote speaker Dick Morris.

DEPARTMENTS > 4 / Business Buzz 16 / HR Connection

20 / Legal Q&A 25 / People Buzz

Informative. Social. On-the-Go! For the most current Business Magazine updates, visit our new website, www.mbabizmag.com, fan us on Facebook and follow us on Twitter! July 2012 > www.mbabizmag.com > 1

This year, everything is new. The all-new online BusinessMagazine

www.mbabizmag.com Manufacturer & Business Association

INFORMATIVE

SOCIAL

ON THE GO

SPOTLIGHT > by Karen Torres MAJR Products Corporation, incorporated in 1991, is an internationally recognized manufacturer of Electromagnetic Interference/Radio Frequency Interference (EMI/RFI) Shielding Products based in Saegertown, Pennsylvania. President and CEO Donald Hester recently spoke to the Business Magazine about the company’s products and services, as well as his recent appointment to the Manufacturer & Business Association’s Board of Governors.

MAJR Products was once a subdivision of Spectrum Control in Fairview. Soon after you came on board as national sales manager in 1993, you decided to purchase the company. Why was this the right opportunity for you? This was definitely the right opportunity for myself and MAJR’s investors. We purchased a small growing company in a niche market, primarily serving the military and aerospace markets, with an opportunity to expand both our product line and expand the industries that we had not serviced in the past. What we saw was a very niche industry with mature suppliers that were getting too comfortable in their markets and not servicing the customers to the levels that they required. Please explain some of the products and services MAJR provides, and in which markets they are utilized? MAJR provides a wide variety of EMI/RFI gasketing and shielding products and technical services that are used for the elimination or reduction of electronic noise that is generated from inside an electronic enclosure. We have been expanding that line to include absorbers and thermal materials for heat dissipation inside the enclosures and recently have added a new division called HSG that provides a variety of electronic and fabrication products and services. These products are primarily used in the military, aerospace, computer, telecommunications, and health-care equipment markets – anywhere you have electronics inside an enclosure that generate heat or noise. Our new HSG division takes the manufacturing processes that we use for our core products and provides a broad spectrum of products to local manufacturing industries, from laminating and water jet cutting to custom light fabrications. When most companies experienced losses or worse in the aftermath of the 9/11 attacks, MAJR experienced double-digit growth. What do you credit for this positioning? MAJR was in the right market at the right time to be honest. When the military markets slowed under the Clinton administration in the mid-to-late ‘90s, we made the decision to increase our efforts in the military market. When the 9/11 attacks occurred, MAJR’s product and technical mix was perfectly positioned to benefit from the increased spending for homeland and national security equipment and materials. MAJR was one of only a handful of companies able to meet the quality and time requirements for the increased defense and homeland security needs that had been generated from the attacks. What is the current outlook for MAJR in 2012? 2012 will see slower single-digit growth due to the reduction in military contracts for equipment under the current administration and a slow economy here in the United States and Europe. Our longer term outlook for the company is very positive as we continue to add both new products and services, allowing us to increase our customer base and expand our markets. You recently became one of the newest members of the Association’s Board of Governors. What do you believe you can contribute to this position/organization? Where I hope to add value to the Board is from having a smaller business mentality where I believe most of the current members are at, under 50 people. I would like to be one of those voices on the Board that champions small business positions and programs that will benefit all businesses in northwest Pennsylvania, but also keeps that smaller business owner in mind from a program and educational skills perspective. What value does being an Association member bring to your business? Savings and information. With the number of programs that are available from the Association, from electric to health care to education skills, legal advice, general business advice, etc., the number of programs that are available is extremely beneficial to a small company such as ours. Is there anything you would like to add? I want to thank those that nominated me to the position on the Board and know that I will give the position the time and effort that it deserves to benefit all of those involved with manufacturing and business here in northwest Pennsylvania. We all need to make every effort possible to get the area growing again and bringing employment back to levels that will benefit all of the members of the Association and their employees and families. For more information about MAJR Products, visit www.majr.com.

VOL. X X V, NO. 7 JULY 2012 Manufacturer & Business Association Board of Governors

Editor in Chief Executive Editor Managing Editor & Senior Writer Communications Specialist Contributing Writers Cover Photography

Photography

Yvonne Atkinson-Mishrell John Cline Dale Deist Bill Hilbert Jr. Donald Hester Timothy Hunter J. Gordon Naughton John B. Pellegrino Sr., P.E. Dennis Prischak Lorenzo Simonelli Sue Sutto Jerry Wertz Ralph Pontillo rpontillo@mbausa.org John Krahe jkrahe@mbausa.org Karen Torres ktorres@mbausa.org Jessica McMathis jmcmathis@mbausa.org Angie Angus Andrea Gioia James E. Spoden Brad Drumheller Drumheller Creative/ Birds Eye Promotions 814/825-1817 Ron Stephens La Mirage Studio 814/835-1041 Jessica McMathis

Advertising Sales

Design, Production & Printing

Patty Welther 814/833-3200 or 800/815-2660 pwelther@mbausa.org Printing Concepts Inc. printcon@erie.net

ON THE COVER: More than 100,000 visitors are expected to attend the annual Roar on the Shore® bike rally in Erie, Pennsylvania, injecting tens of millions of dollars into the local economy. For full story, see page 10.

Mission Statement The Manufacturer & Business Association is dedicated to providing information and services to its members that will assist them in the pursuit of their business and community interests. – Board of Governors Manufacturer & Business Association 2171 West 38th Street Erie, Pa. 16508 814/833-3200 or 800/815-2660 www.mbausa.org © Copyright 2012 by the Manufacturer & Business Association. All rights reserved. Reproduction or use of editorial, pictorial or advertisements created for use in the Business Magazine, in any manner, without written permission from the publisher, is prohibited. Unsolicited manuscripts cannot be returned unless accompanied by a properly addressed envelope bearing sufficient postage. The magazine accepts no responsibility for unsolicited manuscripts or artwork. The Business Magazine and Manufacturer & Business Association do not specifically endorse any of the products or practices described in the magazine. The Business Magazine is published monthly by the Manufacturer & Business Association, 2171 West 38th Street, Erie, Pa. 16508. Phone: 814/833-3200 or 800/815-2660.

July 2012 > www.mbabizmag.com > 3

Business Buzz BUSINESS RECORDS MANAGEMENT ACQUIRES UNDERGROUND ARCHIVES Business Records Management LLC (BRM) has acquired the records and information storage business, including document destruction, and the related assets of Underground Archives, LLC. Part of a larger strategy to improve and expand BRM’s business in the Information Management Industry, the acquisition also strengthens the company’s position as one of the largest independently owned information management providers in the country. Additionally, BRM will continue to develop the Underground Archives brand name as an international provider of secure underground vital records and specialized film and sound management. Founded in 1986, BRM operates facilities in Pittsburgh, Erie and Johnstown and provides information management services, including physical document storage, secure destruction, data tape management,

MBAAds3_Layout 1 5/3/12 3:10 PM Page 3

electronic vaulting, data center backup services, and document imaging, to organizations throughout western Pennsylvania, Ohio, West Virginia and parts of Maryland and New York. For more information, visit www.businessrecords.com.

FORBES NAMES NORTHWEST ONE OF AMERICA’S 100 MOST TRUSTWORTHY COMPANIES Forbes magazine has named Northwest Bancshares, Inc., parent company of Northwest Savings Bank, to its annual list of 100 Most Trustworthy Companies. The list was based on an accounting and governance risk score (AGR) assigned by GMIRATINGS, an independent financial analytics company based in Los Angeles. Granted on a quarterly basis, the AGR uses a proprietary process to evaluate financial reporting, transparency, fiscal policies, management behaviors, corporate governance, and risk factors. The result is

a list of companies that ”have consistently demonstrated transparent and conservative accounting practices and solid corporate governance and management.” Founded in 1896, Northwest Bancshares, Inc. holds assets of $8 billion and operates 168 community banking locations in Pennsylvania, New York, Ohio and Maryland. For more information, visit www.northwestsavingsbank.com.

DECISION ASSOCIATES AWARDS MORE THAN $30K IN FREE SERVICES TO LOCAL NONPROFITS Decision Associates recently announced expERIEnce Children’s Museum as the recipient of a $30,000 Services Grant designed to build organizational capacity and effectiveness. Approximately 20 organizations applied for the grant opportunity, which was given to the organization that best met the need for capacity building services, the capacity to

Austin Every day E.E.Austin lays its tradition of construction excellence on the line. Our extensive list of satisfied clients is testimony to Austin keeping its longstanding promise: “Do the right thing... all the time”. It’s a promise we’ve kept with pride for more than a century... and it’s our promise to you.

Contractors & Construction Managers Since 1906 Erie, Pennsylvania • Jamestown, New York www.eeaustin.com

4 < www.mbabizmag.com < July 2012

DEPARTMENTS > Contact: Jessica McMathis

benefit from the services granted and total impact on the community.

G.W. BECKER, INC. COMMISSIONS 40/15-TON EOT CRANE

G.W. Becker, Inc., a Hermitage, Pennsylvania-based manufacturer of overhead cranes, recently commissioned a new 40/15 ton â&#x20AC;?Working with nonprofits, weâ&#x20AC;&#x2122;ve seen .LULOD %OYG Ĺ&#x20AC; +HUPLWDJH 3$ Electrical Overhead Traveling (EOT) firsthand how funding continues to Ĺ&#x20AC; )D[ crane for a steel processor in ZZZ JZEFUDQH FRP challenge the nonprofit community,â&#x20AC;? said Farrell, Pennsylvania. Don and Sue Moore, owners of Decision The new crane replaces an Associates. â&#x20AC;?When funding becomes scarce existing EOT crane used in the it is even more important that nonprofits customerâ&#x20AC;&#x2122;s annealing department. )25 ,00(',$7( 5(/($6( look at creative ways to build their capacity. The turnkey project included Doing so will allow them to carry out application assistance, design, manufacturing, and installation of the new EOT crane * : %HFNHU ,QF FRPPLVVLRQV D WRQ (27 &UDQH their mission beyond where they ever to meet all current applicable CMAA, OSHA, ANSI/ASME, and NEC specifications. thought possible.â&#x20AC;? +HUPLWDJH 3$ Âą * : %HFNHU ,QF D PDQXIDFWXUHU RI RYHUKHDG FUDQHV UHFHQWO\ FRPPLVVLRQHG D QHZ WRQ (OHFWULFDO 2YHUKHDG 7UDYHOLQJ FUDQH IRU D VWHHO SURFHVVRU LQ )DUUHOO 3HQQV\OYDQLD 7KLV QHZ FUDQH UHSODFHV DQ H[LVWLQJ Since 1980, G.W. Becker, Inc. has offered a full spectrum of overhead crane-related Established in 1984, Decision Associates (27 FUDQH XVHG LQ WKH FXVWRPHUÂśV DQQHDOLQJ GHSDUWPHQW 7KLV PRWLRQ 9'& &0$$ &ODVV Âł(Â´ FUDQH ZDV LQVWDOOHG products and services including: manufacturing of custom overhead cranes, RQ DQ H[LVWLQJ UXQZD\ V\VWHP RI Âś VSDQ DQG Âś RI OLIW )XOO\ ORDGHG VSHHGV IRU WKH FUDQH DUH EULGJH ISP WUROOH\V maintains core practices including: strategic ISP PDLQ KRLVW ISP DX[LOLDU\ KRLVW ISP 2SHUDWHG IURP DQ HQFORVHG LQVXODWHG FOLPDWH FRQWUROOHG FDE assembly of packaged crane equipment, jibs, hoists, OSHA and maintenance planning, organizational development, ZKLFK KDV GRXEOH SDQH WHPSHUHG JODVV RQ IRXU VLGHV LQFOXGLQJ VOLGLQJ VLGHV IURQW DQG JODVV FRYHULQJ SDUW RI WKH IORRU components, runway surveys and inspections, engineering analysis, design IRU YLVLELOLW\ VWUDLJKW GRZQ 7KH RSHUDWRU VLWV LQ D URWDWLQJ FRQWURO FKDLU ZLWK VSHHG PLOO GXW\ PDVWHU VZLWFKHV DQG RWKHU marketing, executive recruitment, and DQFLOODU\ FRQWUROV ORFDWHG LQ FRQVROHV RI WKH DUPV IRU LPSURYHG HUJRQRPLFV 7KLV WXUQNH\ SURMHFW LQFOXGHG DSSOLFDWLRQ engineering, modernizations, radio controls, runway electrification, DC and AC succession/exit planning for business and DVVLVWDQFH GHVLJQ PDQXIDFWXULQJ DQG LQVWDOODWLRQ RI WKH QHZ (27 FUDQH WR PHHW DOO FXUUHQW DSSOLFDEOH &0$$ 26+$ control panels, automation control and integration, and turnkey installation, as well $16, $60( DQG 1(& VSHFLILFDWLRQV nonprofit organizations. as parts distribution for all makes and models of overhead cranes and hoists. 7KH FUDQH UHSODFHPHQW SURMHFW UHVXOWHG LQ LQFUHDVHG UHOLDELOLW\ ORZHULQJ WKH FRVW RI RZQHUVKLS GXH WR WKH HTXLSPHQW For more information, visit PRGHUQL]DWLRQ DQG UHDGLO\ DYDLODEOH UHSODFHPHQW SDUWV For more information, visit www.gwbcrane.com. www.decisionassociates.net. The runner-up, the Multicultural Community Resource Center, also received a $10,000 services grant.

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15,142 CHILDREN 15,142 CHILDREN IN ERIE COUNTY LIVE IN POVERTY. ININ ERIE ERIE COUNTY COUNTY LIVE IN IN POVERTY. POVERTY.

HELP THAT. HELP US US CHANGE CHANGE THAT. Too many families in our region are forced to forgo one basic need over another - such as housing, healthcare, childcare or food - due to lack of income. According to some estimates, a typical family of four needs to earn as much as two and a half times the federal poverty level ($22,050) to be able to survive without any form of public and private assistance. In 2010, approximately 30,000 Erie County families were below this self-sufficiency benchmark.

United Way of Erie County’s Bold Challenge to the Community: Reduce the number of families struggling to meet their basic needs by one-third before 2025. We have embarked on a bold journey: one that links solid, research-based community strategies to the resources needed to implement them. By connecting families to the building blocks of economic stability - Education, Income, and Health - United Way and our partners will ensure people have the tools they need to thrive. United Way’s work goes well beyond our historical role of funding strong nonprofit partners. Today we are mobilizing all our assets: funding, volunteers, legislative advocacy, technology, in-kind resources and corporate partnerships to deliver transformative, measurable results. Visit our website (www.unitedwayerie.org) to learn more about our plan to reduce poverty and our Education goal to prepare at least two-thirds of our high school graduates to succeed in education after high school by 2025. We fully understand we cannot achieve these results alone. So let’s roll up our sleeves and help people move out of poverty one by one, family by family, neighborhood by neighborhood. That’s what it means to LIVE UNITED.

Bill Jackson President, United Way

GIVE. ADVOCATE. VOLUNTEER.

United Way of Erie County unitedwayerie.org

James B. Ohrn Board Chair, United Way Vice President, Custom Engineering

Health Matters

EDITORIAL > By Andrea Gioia

Know Your Options: How You Can Stay Covered With Individual Health Insurance For most employers and employees, the concept of individual health insurance plans is likely not something they have thought much about. For many reasons — including the cost and comprehensiveness of coverage — employer group plans have long been the best — and, for some, the only — option when it comes to health insurance. That is no longer necessarily the case. Economic uncertainty has resulted in an increase in the number of unemployed persons. Technology advances have increased the number of self-employed persons. And rising health-care costs have forced more and more small businesses to reconsider whether they can afford to provide health coverage for their employees. Add to that the fact that more health insurers are creating more choices for consumers in the individual market and suddenly individual plans become something that an increasing number of people are interested in learning more about. Things to Look for in Individual Plans One of the advantages of getting an individual plan is that you can have a health-care policy that better fits your specific needs. To do so, however, means that you need to find the plan that makes the most sense for you and your health situation. You can have direct control over your policy and its benefits. You can choose to

have certain provisions included or excluded. And, you can choose your deductible amount and the cost of co-payments. You also should be sure to choose a plan that enables you to choose the hospitals and doctors you want. Some individual plans do not offer maternity or behavioral health benefits, so if those things are important to you, you should look for them. In all plans, preventive care is covered in full. And, naturally, if you have insurance through your employer, once you leave your job, you also leave your health insurance. An individual plan goes with you wherever you need to go with your career. Disadvantages of Individual Plans Price. Individual policies can be very expensive, especially for those considered to be high risk or someone who has preexisting conditions. Potential rejection. Some preexisting conditions, such as congestive heart failure, Parkinson’s disease, and cystic fibrosis, can cause an applicant to be rejected for coverage. Types of Individual Plans • Traditional fee-for-service • Health maintenance organization (HMO)

• Exclusive provider organization (EPO) Despite the changing marketplace, it is unlikely that individual plans will supplant employer group plans any time soon. Employer group plans continue to be the most popular, in large part because they offer the most comprehensive coverage, because the employer largely subsidizes them and because there are tax breaks associated with them. For the consumer, such plans are generally less expensive than individual plans and that will continue to make them a popular choice. Persons interested in UPMC Individual Advantage can access information and tools at www. upmchealthplan.com, or call 877563-0292 and speak one-on-one with a UPMC Health Plan sales representative. Andrea Gioia is executive director for Product Innovation for UPMC Health Plan, which is part of the integrated partner companies of the UPMC Insurance Services Division. These include UPMC Work Partners, LifeSolutions, UPMC for You (Medical Assistance), Askesis Development Group, Community Care Behavioral Health and E-Benefits – and which offer a full range of insurance programs and products.

• Preferred provider organization (PPO) • Point of Service plan (POS)

July 2012 > www.mbabizmag.com > 7

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logo and the McGladrey Alliance signatures are used under license by RSM McGladrey, Inc. and McGladrey & Pullen, LLP. The McGladrey Alliance is a premier affiliation of independent accounting and consulting firms. The McGladrey Alliance member firms maintain their name, autonomy and independence and are responsible for their own client fee arrangements, delivery of services and maintenance of client relationships. The McGladrey Alliance is a business of RSM McGladrey, Inc., a leading professional services firm providing tax and consulting services. McGladrey is the brand under which RSM McGladrey, Inc. and McGladrey & Pullen, LLP serve clientsâ&#x20AC;&#x2122; business needs. McGladrey, the McGladrey logo and the McGladrey Alliance signatures are used under license by RSM McGladrey, Inc. and McGladrey & Pullen, LLP.

Legal Brief

EDITORIAL > By James E. Spoden

Charitable Giving in a Low Interest Rate Environment With the economy still recovering and state budgets being cut, charities need assistance from private individuals more than ever. Following is a brief discussion of common strategies that charitably inclined individuals may want to consider and the current advantages/disadvantages of each. CRATs and CRUTs CRATs (and CRUTs) — Charitable Remainder Annuity Trusts and Charitable Remainder Unitrusts, respectively — are trusts in which the grantor reserves an annuity (or a unitrust) payment for a period of years. At the expiration of the term, the remaining balance of the CRAT (or CRUT) is distributed to charity. With the currently low Internal Revenue Code Section 7520 Rate (”7520 Rate”) — 1.2 percent for June 2012 — the value of the remainder interest can be quite low. Therefore, the charitable deduction the grantor is permitted to take is currently much lower than in periods where the 7520 Rate is high. Further, in order to qualify as a CRAT, the Trust must meet two standards. First, the remainder value must have an actuarial value of at least 10 percent of the property transferred to the CRAT. When the 7520 Rate is as low as it currently is, this standard becomes quite difficult to achieve. Second, at funding, there can be no more than a 5-percent probability that the CRAT will be exhausted before the charitable remainder vests. When you are calculating the remainder value based on a 1.2-percent interest rate, there becomes a much higher probability that the Trust will exhaust prior to vesting. For these reasons, a CRAT (or CRUT)

is not ideal in a low interest rate environment. Charitable Lead Annuity Trust (”CLAT”) A CLAT is a trust that provides for an annuity payment to a charity for a period of years, with the remainder being gifted to children or another designated beneficiary. The value of the gift over at the termination of the CLAT is determined by valuing the remainder interest on the date of the gift. The remainder is valued by reference to the 7520 Rate. Therefore, if the CLAT’s investment performance over the term exceeds the 7520 Rate, you will be gifting such excess to your designated beneficiary free of gift tax. Gift of Remainder Interest in Residence An individual may want to consider reserving the use of their personal residence for the remainder of his or her life and gifting the remainder to charity. The remainder interest is again valued by reference to the 7520 Rate. The lower the 7520 Rate, the higher the remainder value of the gift, which the individual is permitted to take as a charitable deduction on his or her income tax return. Private Foundation If you are interested in setting aside a large sum of money for charitable purposes, a private foundation may be of interest. A private foundation allows your family members to maintain control over the investment of the funds while at the same time permitting them to select charitable beneficiaries each year. The primary drawback to a private foundation is that administrative costs can be high, so it should only be considered for large gifts.

Donor Advised or Donor Directed Funds Donor advised or donor directed funds are typically administered by a local community foundation. The community foundation invests your gift and applies the principal and income from it to the causes that you direct. These funds can last for an extended period of time. Gift of IRA at Death If you plan on making a large charitable gift at death, you may want to consider naming a charity as a beneficiary of all or part of an IRA, rather than making a specific charitable bequest under your will. By naming the charity as beneficiary, neither death taxes nor income tax will be paid on the portion of the IRA designated for charity. Even in periods of slow economic growth, there are estate-planning strategies available for the charitably inclined individual. For more information about these strategies, contact James E. Spoden at MacDonald Illig at 814/870-7710 or jspoden@mijb.com.

James E. Spoden is a partner at MacDonald Illig. He concentrates his practice in the areas of corporate, commercial and business law, with a special emphasis on taxation and estate planning for small business owners. He received his Juris Doctor from DePaul University College of Law and his Master's of Law in Taxation from DePaul University.

July 2012 > www.mbabizmag.com > 9

21 52$5 7+( 6th Annual Bike Rally Fuels Local Economy

Organizers Estimate More Than 100,000 Visitors to Inject Tens of Millions of Dollars into Region in 2012

In 2007, the Manufacturer & Business Association Board of Governors decided to create a community event that would stimulate the local economy, draw thousands of visitors to the region and raise funds to donate to a worthy cause. The result is Roar on the Shore®, the fastestgrowing motorcycle rally in the northeast United States. Entering its sixth year in 2012, Roar® is expected to attract an estimated 100,000 people and has raised an estimated $590,000 to fund cancer research, veterans programs and a children’s hospital, as well as build a sanctuary for abused children and help to complete Phase I of the Flight 93 National Memorial. Last year, Roar® was voted Erie’s Choice Community Festival, a strong testament from the community. ”The support for this event from the entire community has been inspiring and instills a sense of pride in all of us,” says Dale Deist, chairman of the MBA Board of Governors.

A Highly Anticipated Event

When more than 100,000 bikers converge on the shores of Lake Erie for the sixth annual Roar on the Shore® rally on July 19, 20 and 21, business owners like Kelly Lapping will be eager to see these guests roll into town. A longtime supporter and sponsor of the largest free charitable motorcycle rally of its kind in the United States, Lapping, who owns HarleyDavidson of Erie with his wife, Susan, says the Roar® brings increased sales of motorcycles, parts and accessories, and service work from travelers. Harley’s motorcycle rental business also is sold out each year. Harley, which hosts the annual Thunder on the Isle: The Mayor’s Ride and donates a motorcycle for raffle each year, also is marking a new chapter in their store’s history with the opening of their new store at 3712 West 12th Street in Millcreek Township.

Roar on the Shore® has truly become an event that has been embraced from all walks of life. The Bringin’ in the Roar Bike Parade is now an annual tradition for thousands of people who line the parade route.

”Obviously, a motorcycle rally is good for our business,” notes Lapping, ”but more importantly, we support the rally because we feel very strongly that the rally is a wonderful event to attract visitors to our community and showcase all the amenities that make Erie such a wonderful place to live.”

”We are very proud of the work our staff does, not only during Roar on the Shore® but throughout the entire year. They literally start working on next year’s event the day after this year’s event,” Deist says.

Such a sense of pride is shared by sponsors like Joe Askins, who anticipates thousands of bikers will visit his Victory of Erie/Off-Road Express locations for the annual Roar to the Vineyards and first-time Ladies Only rides.

”This event,” he adds, ”has discovered how a great community can have fun and, at the same time, find ways to fund precious community assets like the Kanzius cancer research, the children’s hospital, say thank you to our veterans with vet program support, assist in abused children support with the playground project, and how to pay homage to the ‘American Spirit' that refused to let terrorists dominate America in recognizing and supporting the heroes of Flight 93 by helping fund the national memorial.”

”Our dealership sponsors rides because that’s what everyone here loves to do — ride — and if we can share our passion for riding and host rides from our dealership, that’s a great day…,” Askins says. ”Many of the outof-town guests enjoy visiting the dealership and love the huge selection of motorcycles along with the apparel and parts, and many return to purchase the bike of their dreams.”

10 < www.mbabizmag.com < July 2012

Over the years, Askins has helped bring in some celebrity motorcycle guests to participate in dealership rides, including bike builders Arlen and Cory Ness and stunt rider Bill Dixon. This year, he is bringing in bike builder Rick Fairless, who owns Strokers Dallas bike shop in Texas â&#x20AC;&#x201D; voted the No. 1 biker hangout in Texas. â&#x20AC;?The dealership sponsored ride is a great place for riders to hang out with friends, ride with a celebrity guest, and see what our dealership has to offer,â&#x20AC;? he adds.

Great Lakes region, but RoarÂŽ has been helping to book hotels and motels within a 60-mile radius. â&#x20AC;?Our hotels and restaurants are filled throughout the week of the event,â&#x20AC;? explains Erie Mayor Joe Sinnott. â&#x20AC;?In addition, there is a â&#x20AC;&#x2DC;spillover impactâ&#x20AC;&#x2122; as visitors use other services in our community. Once these visitors to the community see what Erie has to offer, Iâ&#x20AC;&#x2122;m confident theyâ&#x20AC;&#x2122;ll return for future events and vacations.â&#x20AC;?

Plus, it supports the rally, which in turn benefits the community. â&#x20AC;?I feel as a business owner it is important to support the Roar on the ShoreÂŽ because of what it does for our local economy,â&#x20AC;? says Askins. â&#x20AC;?The attendance each year continues to grow and so does the amount of consumer spending and it really benefits all local businesses and not just downtown, the entire region benefits from this eventâ&#x20AC;Śâ&#x20AC;?

presents:

Spending Power

Thousands of bike rallies are held across the United States every year, but the ones that draw large followings are bringing in major spending dollars. In 2011, for example, the City of Sturgis calculated that the Sturgis Motorcycle Rally had an estimated $816.9-million total economic impact annually on the City of Sturgis, the Black Hills, and the state of South Dakota. The estimate was based on a weighted average spending of $250 each day. For the three-day RoarÂŽ, rally organizers estimate the economic impact to be in the tens of millions of dollars â&#x20AC;&#x201D; or more. â&#x20AC;?If you walk up and down State Street, it is standing room only in most, if not all, of the bars, taverns and restaurants within The Hubâ&#x20AC;&#x2122;s 15-block footprint,â&#x20AC;? explains rally spokeswoman Tammy Polanski. â&#x20AC;?And business owners from all over the region tell us that they need to hire additional people to handle the enormous increase in volume.â&#x20AC;?

Many local businesses and organizations support and sponsor the rally each year, including: <09>A B?>=B>A <09>A B?>=B>A

Bev Walker, who co-owns Sherlockâ&#x20AC;&#x2122;s/Park Place with Thomas â&#x20AC;?Tippyâ&#x20AC;? Dworzanski and annually sponsors the Miss Roar on the Shore contest with the Boardwalk Complex, run by Matt Orton, says that each year they ramp up staffing for major summer events, like RoarÂŽ. The bar hours are adjusted to open earlier to accommodate the foot traffic from the rally during the day with added staff during jam-packed nighttime concerts held on North Park Row.

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â&#x20AC;?Weâ&#x20AC;&#x2122;ve got regular traffic through our doors until closing,â&#x20AC;? says Walker, â&#x20AC;?whether it is sitdown or food or beer to go.â&#x20AC;? Walker says that many of her patrons â&#x20AC;&#x201D; including out-of-towners â&#x20AC;&#x201D; like what they see during RoarÂŽ and have returned year after year. Best of all, the benefits of supporting the rally can help both businesses and the community.

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â&#x20AC;?It brings so many new customers into your operation that may be return customers,â&#x20AC;? says Walker. â&#x20AC;?Youâ&#x20AC;&#x2122;ll get a lot more if you give a little bit.â&#x20AC;?

A Summer Travel Destination

The summer season is typically a busy time of year for lodging in the

July 2012 > www.mbabizmag.com > 11

Lisa DiLuzio, general manager of the Bel-Aire Clarion Hotel and Conference Center, agrees, saying that the hotel often sees repeat customers from Pittsburgh, Buffalo, Cleveland and Canada, who are interested in reserving rooms for the following year. The rally, she notes, ”has a great following and a great name that I think impacts Erie more than an individual site, venue or restaurant. It puts us on a map as a city.” John Oliver, president of VisitErie, agrees that Roar®, as one of the region’s major summer events, has become important to Erie’s tourism product and economy. Visitors like what they see and tell others about it. ”We are drawing people into the community for an event like this and they are leaving with an impression of Erie that, I believe, we will see not only visitors return but they are out telling more people about how great the community is,” Oliver says. ”Any time you can make a visitor a repeat visitor, it definitely benefits the economy and those people for sure are telling more people about their positive experiences in Erie.” One only needs to scan the parking lots at area hotels, motels, bars and restaurants during Roar® to understand the picture he’s painting. More motorcycles — with more out-of-state license plates — can be found almost anywhere during the event, especially during the Bringin’ in the Roar Bike Parade, the rally’s official kickoff.

”They believe in what we are doing for the Erie community as a whole,” adds Polanski, ”and the economic impact that it brings to everyone who lives and works here. ” But that economic impact would never be realized without the key people who plan and work on the rally as soon as the current one ends. In fact, the MBA staff meets regularly throughout the year to plan for the next year’s rally. ”It is truly a pleasure for me to work with such a dedicated group of people who are genuinely interested in the continued success and growth of Roar,” says 2012 Chairman Frank Polanski. ”The MBA Board and Roar on the Shore Board of Directors all have a common goal to make the rally enjoyable for all who attend, support the community, and donate the proceeds.” Polanski says that without the support of the Manufacturer & Business Association Board of Governors, a three-day, free motorcycle rally would not be possible. ”Their vision and support help enable us to create an event unlike any other in our city’s history.” For more information about the 2012 Roar on the Shore®, visit www.roarontheshore.com. 2)),&,$/

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When those bikers roll into town, they are spending money to eat, sleep and ride — which means more money for the local economy. ”With visitors who come in by automobile, you see cars parked at the Mall, restaurants, bars, attractions and other places, and it doesn’t have the same impact as seeing motorcycles at all these locations,” explains Oliver. ”I think that really assists us in showing that, yes, when visitors come into a community, it impacts a lot of businesses throughout the entire community.”

Business Support

It all started with the Manufacturer & Business Association’s vision to create an event that would raise charitable funds, encourage visitors to the area, and impact the economy in a very powerful way. The MBA’s Board of Governors supports Roar on the Shore® in every aspect and, in six years, has created one of the fastest-growing motorcycle rallies in the United States.

The Official 2012 Roar on the Shore® Pocket Guide includes a schedule of events, contest and ride information, and much more.

However, a rally of Roar’s® size requires a lot of support — both in time and money. That is why the business community’s buy-in and sponsorships are so critical to Roar’s® success. ”There is no question that no one organization has a big enough checkbook to put on an event of this size for 100,000 people,” explains spokeswoman Tammy Polanski. ”We simply could not do it without those sponsors and without those partners helping to participate, many of which also create special events for us as part of their sponsorship.” For example, Sherlock’s/Park Place and the Boardwalk hold the Miss Roar on the Shore contest and actively promote the contest in the weeks leading up to it, getting folks to come in and participate. Other sponsors, like Off-Road Express, host different rides or events, while some businesses opt to make gift or monetary donations.

12 < www.mbabizmag.com < July 2012

Each July, Roar® draws bikers and bike enthusiasts to the shores of Lake Erie, to enjoy three days of rides, bands, bike contests, custom motorcycles, bike accessories and more. This year, the Bringin’ in the Roar Bike Parade set for Thursday, July 19, will be led by celebrity grand marshal and professional motocross racer Rob Van Winkle, who began racing motorbikes as an eight-year-old in Dallas, Texas, and who, from ages 15 through 17, won three straight titles at the Grand National Championships. Van Winkle, who is known to many by his stage name Vanilla Ice, is currently host of the homemakeover series ”The Vanilla Ice Project” on the DIY Network. Also part of the entertainment lineup are metal legends Great White, Slaughter and Kix, which will rock the Roar® stage on Thursday, Friday and Saturday nights, starting at 9 p.m. For a complete schedule of events or to view the 2012 Pocket Guide, visit www.roarontheshore.com. Pocket guides also are available at participating sponsor locations and in The Hub during the rally.

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Erie Gives

Itâ&#x20AC;&#x2122;s a GREAT DAY to help a nonprofit.

... ...................................... August 14, 2012

Itâ&#x20AC;&#x2122;s back. That one day when your donation can really make an impact. Last year, nearly $800,000 was raised for local nonprofits on Erie Gives Day. On August 14, just go to www.ErieGives.org and donate $25 or more to any of your favorite nonprofits. And a prorated match from a pool of $101,000 will be added to your donation. Special thanks to GE Transportation for adding $25,000 to the pool this year!

14 < www.mbabizmag.com < July 2012

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HR Connection REPORT: NONPROFIT GROUPS ARE GROWING SOURCE OF JOBS With nearly 1.5 million nonprofit organizations across the nation, the sector has become an important part of the U.S. economy, according to a recent report published by Scripps Howard News Service.

University. According to the report, the nonprofit sector employed around 10.7 million workers in 2010, making it the third-largest U.S. work force after retail trade and manufacturing.

Nonprofits accounted for 9 percent of all wages and salaries in 2009, according to the Urban Institute’s National Center for Charitable Statistics. They contributed 5.4 percent of the country’s Gross Domestic Product that year, and they held a total of $4.3 trillion in assets, up from $2.4 trillion in 1999 — a 39-percent increase after adjusting for inflation.

MAGAZINE RANKS 100 BEST CORPORATE CITIZENS As consumers clamor for companies to embrace social responsibility, good corporate citizenship is becoming a vital part of many companies’ success. Corporate Responsibility Magazine recently ranked the top 100 companies that are focused on more than just the bottom line.

In terms of jobs, nonprofit employment increased at an average rate of 1.9 percent from 2007 to 2009, according to a recent study by the Center for Civil Society Studies at Johns Hopkins

The list, in its 13th year, ranks the Russell 1000 index of large-capitalization companies on the following factors: environment, employee relations, human rights, governance, finance and philanthropy.

16 < www.mbabizmag.com < July 2012

For the full article, visit www.scrippsnews.com.

Consistently on the Corporate Citizens list is Intel, which sends its employees to help teach technology in developing countries and ensures its supply chain is conflict-free by implementing tracking and tracing programs in places such as the Congo. Microsoft is also a cornerstone of the Corporate Citizens list, donating $844 million in software to 46,886 nonprofits in 2011. The tech corporation also created and used cloud solutions to help relief organizations, governments, businesses, and the public during natural disasters. According to the magazine, other companies making the list include: BristolMyers Squibb Co., IBM, Johnson Controls, Accenture, Spectra Energy Corp., Campbell Soup, Nike and FreeportMcMoran Copper & Gold, Inc. For the full list, visit www.thecro.com.

DEPARTMENTS > Contact: Stacey Bruce

Make Your Meetings Valuable, Effective in Four Simple Steps On paper, meetings make sense. Unfortunately, the execution of meetings often falls short of expectations. It doesn’t have to be this way. If you follow a few simple rules, meetings can be productive, invigorating, and even fun. 1. Keep it short. The average person loses interest in 45 minutes. If you have items left to discuss, schedule another meeting. Once you run over the announced finishing time, people stop paying attention to you and start thinking about what they could be doing. Start on time, too. Once people know that you start late, they will be showing up whenever they feel like it. Not the way to control a meeting. 2. Have an agenda and stick to it. The agenda should be in writing and should be distributed a few days

before the meeting. If you spring an agenda on people when they enter the room, they have no time to prepare questions or comments on the topics. If you pass it out too early, it gets lost. 3. Invite participation. Ask direct questions. Break them into groups to discuss the hot topics. Assign agenda topics to participants for them to lead the discussion. Make them feel a part of the process and they will gladly participate. 4. Is it necessary? Do not make meetings your default communication tool. Oftentimes a phone call, an email, or a face-to-face can suffice.

With more than 15,000 participants trained, the Manufacturer & Business Association is the leading resource for professional development and computer training in the area. For more information, please contact me at 814/8333200, 800/815-2660 or dmonaghan@ mbausa.org. I also encourage you to visit the Association’s website, www. mbausa.org, to learn more about our upcoming offerings.

Dan Monaghan is the director of Training at the Manufacturer & Business Association.

Effective meetings demand planning, interaction and goals. With just a little effort, people will look forward to your meetings with anticipation, not dread.

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Who can focus on work when living with violence at home?

of senior executives say domestic violence has a harmful effect on productivity. Moreover, employees are often stalked at work by their abuser, raising safety concerns for all.

47%

We can help your employees deal with DV issues and help your company apply best practices as suit your needs. Call us in Erie today at 814-455-1774.

July 2012 > www.mbabizmag.com > 19

Legal Q&A

We have seen the future, and it is ours.

WE WANT TO BRING SEVERAL SUMMER INTERNS ON BOARD THIS SUMMER. CAN THE INTERNS SIGN AN AGREEMENT STATING THAT THEY AGREE AND UNDERSTAND THAT THEY ARE NOT EMPLOYEES AND, THEREFORE, ARE NOT SUBJECT TO THE MINIMUM WAGE AND OVERTIME REQUIREMENTS OF THE FEDERAL FAIR LABOR STANDARDS ACT (FLSA)? While many interns may be willing to accept unpaid internships or volunteer work in exchange for on-the-job experience and a potential connection to a future job, interns cannot simply agree to be interns; they must meet the appropriate test under the FLSA to determine whether they are an intern or an employee. No person may waive their statutory right to

receive minimum wage and overtime, even if they truly want to work voluntarily as an intern. OUR ORGANIZATION IS A NONPROFIT ENTITY. DOES THE DEPARTMENT OF LABOR (DOL) SIX-FACTOR TEST APPLY TO OUR INTERNSHIPS? In 2010, the DOL issued a ”Fact Sheet,” available at www.dol.gov/ whd/regs/compliance/whdfs71.pdf, regarding the six-factor test. In a footnote, the DOL indicated that it ”recognizes an exception for individuals who volunteer their time, freely and without anticipation of compensation for religious, charitable, civic, or humanitarian purposes to nonprofit organizations as volunteers” (emphasis added). The footnote went on to explain that the DOL is ”reviewing the need for additional

Call today at 814/833-3200 or 800/815-2660.

CELEBRATE

July 4, 2012 Liberty Park Amphitheater Fireworks - Live Music - Food

n July 4, join thousands of your friends and neighbors by bringing your picnic baskets, lawn chairs, and blankets to the Liberty Park Amphitheater at 5 p.m. Purchase local delicacies, enjoy live music, partake in activities for children, and end the night with a spectacular Zambelli International fireworks display at dusk – there’s no more appropriate way to celebrate our nation’s independence!

20 < www.mbabizmag.com < July 2012

HAVE A LEGAL QUESTION? GET ANSWERS FROM THE ASSOCIATION’S FREE HR/LEGAL HOTLINE. The Manufacturer & Business Association knows that issues can arise on a moment’s notice in the workplace. As an Association member, you have free, unlimited access to our certified HR specialists and employment law attorneys for advice on a variety of workplace-related issues.

INDEPENDENCE DAY WITH PERRY 200

he Perry 200 Commemoration simultaneously honors both the actions of Commodore Oliver Hazard Perry during the War of 1812 as well as the city of Erie’s role in the construction of his fleet and his flagship, the U.S. Brig Niagara, which almost single-handedly led to the transformation of Erie from a quiet frontier village to the bustling maritime port and manufacturing center it is today. Over the course of the next 16 months, the Perry 200 Commemoration presents a series of lectures, concerts, and other community events.

guidance on internships in the public and nonprofit sectors.” Therefore, since the DOL did not indicate an alternative test for unpaid internship programs for nonprofit employers, you should continue to evaluate internship programs using the DOL’s six-factor test.

Untreated mental illness costs the United States over 100 billion dollars each year. Unemployment, unnecessary disability, substance abuse, homelessness, inappropriate incarceration, suicide and wasted lives — without treatment the consequences of mental illness for both the individual and society are staggering.

We can help

Talk About It Employee Assistance Program Visit www.StairwaysBH.org/EAP or call 814.453.5806 to learn more.

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DEPARTMENTS > Contact: Tammy Lamary

Internship Programs: Valuable Opportunity for Interns, Potential Risk for Employers As summer approaches, many employers are planning to welcome summer interns into their organizations. Many of these internship programs will be paid, while others will be unpaid â&#x20AC;&#x201D; replacing pay with enhanced resumes and valuable experience. Although these unpaid internship programs seem innocent enough, in recent months, several lawsuits have been filed by former interns, seeking to recover unpaid wages and overtime. As a result, employers developing unpaid internship programs should review the six-factor test the U.S. Department of Labor (DOL) uses to assess whether interns, externs, graduate assistants or similar individuals are â&#x20AC;?traineesâ&#x20AC;? or â&#x20AC;?employees.â&#x20AC;?

actual operation of the facilities of the employer, is similar to that which would be given in an educational environment; â&#x20AC;˘ The training is for the benefit of the trainees or students; â&#x20AC;˘ The trainees or students do not replace regular employees but work under their close supervision; â&#x20AC;˘ The employer that provides the training derives no immediate advantage from the activities of the trainees or students, and on occasion its operations may actually be impeded; â&#x20AC;˘ The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and

According to the DOL, an individual â&#x20AC;˘ The employer and the trainees or stuis an intern, as opposed to an employee, dents understand that the trainees or only if all of the following factors are met: students are not entitled to wages for the time spent in training. â&#x20AC;˘ The training, even though it includes

Employers in violation of these terms may be subject to: 1) penalties from federal agencies, and 2) lawsuits brought by individuals who worked as interns without pay. This does not mean employers should discontinue their unpaid internship programs; however, they should be careful that those opportunities comply with the law. For more information on the legal issues regarding internships, please contact me at 814/8333200, 800/815-2660 or tlamary@mbausa.org.

Tammy Lamary is Labor & Employment Counsel for the Manufacturer & Business Associationâ&#x20AC;&#x2122;s Legal Services Division.

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30 July 2012 > www.mbabizmag.com > 21

EDITORIAL > by Angie Angus

Getting the Strategic Sequencing Right Can Reduce Your Risks With New Products, Services Angie Angus is the manager of BOS Programs and Support Services.

Editor’s Note: Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, by authors W. Chan Kim and Renée Mauborgne, is an international bestseller that has been written in 44 languages. This article is part of a series that features excerpts from the book.

Most companies or organizations, at some point, have introduced a new product or service that didn’t attain the success they had envisioned. It either didn’t achieve the expected market share, or the cost to produce the product or provide the service was too high and they weren’t able to make a large enough profit. Why didn’t people see the value in the product and flock to purchase it? Why wasn’t the company able to make a good profit from this valuable service? Chances are they didn’t get the strategic sequencing correct. Blue ocean strategy provides a sequence for developing and testing new ideas while minimizing risk. Once your company has developed some of their blue ocean ideas on a strategy canvas, it is time to check the viability. Blue Ocean Strategy explains, ”The next challenge is to build a robust business model to ensure that you make a healthy profit on your blue ocean idea. This brings us to the fourth principle of blue ocean strategy: Get the strategic sequencing right. With an understanding of the right strategic sequence and of how to assess blue ocean ideas along the key criteria in the sequence, you dramatically reduce business model risk.” Buyer Utility A blue ocean strategy needs to be constructed in the following order: buyer utility, price, cost and adoption (See diagram). The utility to the buyer always comes first because if there is no demand for the product, the idea is going to fail before it gets started. With blue ocean strategy, you are looking to reach a mass market, so you need to ensure that the product unlocks exceptional utility for the masses that may buy it. Price Once you’ve established that your idea will offer exceptional value for buyers, develop a price that makes the product attractive to the majority of the market. Many companies previously calculated their costs first and then set the price. The problem here is that the price may not be one that buyers are willing to pay. Production Cost The first two steps — buyer utility and price — are both geared toward the revenue-generating side of your business model. You have developed a product or service that offers dramatic buyer utility at the right price for people to purchase it. Now you must 22 < www.mbabizmag.com < July 2012

determine whether you can produce the product at a cost that allows you to make a healthy profit. If you can’t produce your product at the target cost, then you must either scrap the idea or rethink your business model to determine if there are ways to drive costs down without sacrificing the buyer utility. Adoption Once the first three steps are achieved, you must determine if there are any blocks to adopting the model successfully. The majority of strategic plans fail during execution. It is important to scrutinize the final step, adoption, as closely as the first three areas. If you have successfully addressed all four of these areas — buyer utility, price, cost and adoption — then you should have a blue ocean viable idea with minimal risks. The next few articles will delve into more detail on how to successfully evaluate and achieve these four steps. If you are interested in learning more about how your company can explore blue oceans of opportunity, please visit mbausa. blueoceanstrategy.com or contact me at aangus@mbausa.org.

OntheHill

DEPARTMENTS > Contact: Lori Joint

Keeping Competitiveness in Focus: What Pennsylvania Can Do to Be a Better Friend to Business Anna McCauslin is the state government relations representative for the Manufacturer & Business Association in Harrisburg. Contact her at 717/525-7213 or amccauslin@mbausa.org.

Competitiveness is a word, and an ideal, tossed out by many legislators here in the state capital. Unfortunately, competitiveness is a moving target. During the Rendell administration, Pennsylvania was often at a standstill, and sometimes sliding backwards. Neighboring states like Virginia were steadily marching upwards in many indices and boasting a budgetary surplus. Meanwhile, Pennsylvania dissolved into the lowest rankings and had a $4-billion deficit just two years ago. In 2009, Pennsylvania ranked 46th in economic performance and 42nd in economic outlook in a study titled Rich States Poor States done by the American Legislative Exchange Council (ALEC). This year, the same 15-policy variables measured Pennsylvania as 30th in economic performance and 40th in economic outlook. One major reason for this is that Governor Tom Corbett did not raise taxes to fill the deficit. Although Pennsylvania, through the leadership of Governor Corbett and House Majority Leader Turzai, eliminated the general fund deficit and passed strong legal reform, there is still a long way to go. We cannot rely on states such as New Jersey, New York and Maryland’s inhospitality to business to make the Commonwealth look good. We must strive to make Pennsylvania a better place to live, work and own a business. Labor Changes Changes in labor policy, especially the enactment of rightto-work and true employee choice legislation, would be the single biggest relief for employers in Pennsylvania. However, we have identified a cohort of six to 10 House Republicans who are actively working against leadership to ensure that no such changes are made. Even a relatively low-hanging fruit of raising the prevailing wage threshold to $185,000, merely adjusting to the rate of inflation, became an all-out assault on the business community by labor organizations. Another change that would give Commonwealth job creators a boost is true unemployment compensation reform. Pennsylvania is one of the most generous states in which to be unemployed. Pennsylvania ranks third behind California and New York in average total weeks claimed and, until

recently, there was not an active work search requirement on the books. Just last month, the state General Assembly passed legislation that allows the state Department of Labor and Industry to issue bonds of up to $4.5 billion to pay off the $3.9-billion debt owed to the federal unemployment compensation fund. The bill attempts to create solvency by paying down the debt over 30 years. The bill also made small changes to workers’ eligibility, and increased the employer’s wage base from $8,000 to $10,000, while reducing the adjustment factor to 0.75 percent. When major reform was proposed last summer, HB 916 was shot down — it was the last vote the business community has had on a major issue. The other issues have not received a vote, and the same gang of six is allowed to hide and say they would approve the issue if it would come for a vote. Tax Improvements Broad indices, such as ALEC’s Rich States Poor States, show Pennsylvania making strides; however, according to a recent study by the Tax Foundation, Pennsylvania ranks 50th overall for mature operations and 49th overall for newly established operations. The Tax Foundation study only looked at the narrow measures of corporate headquarters, research and development facilities, retail stores, distribution centers and labor-intensive manufacturing, to name a few. To spur economic growth and improve the overall competitiveness of the Commonwealth, the legislature and governor should work toward real tax changes, such as eliminating the cap on net operating loss carryforwards, reducing the corporate net income tax, implementing the single sales factor and continuing the phase out of the capital stock and franchise tax. Another suggestion is to not get obsessed with ”closing” the mythical ”Delaware Loophole,” which is merely a tax deduction for multi-state businesses similar to the mortgage deduction for homeowners. Companies that have holding companies in other states comply with established Pennsylvania law for paying their business taxes. Replacing this law with new, unclear regulations does not guarantee high-tax revenues from businesses; rather, it only promises more confusion, litigation and potentially reduced collections. July 2012 > www.mbabizmag.com > 23

Events

Manufacturer & Business Association Central PA Division Annual Event The Manufacturer & Business Associationâ&#x20AC;&#x2122;s Central Pennsylvania Division Annual Event was held on May 15 at the Genetti Hotel & Suites in Williamsport. A crowd of more than 100 people attended the networking event, sponsored by Data Papers, Inc., with the keynote address delivered by prominent political consultant Dick Morris.

MBA Central Division Advisory Board Chairman Jerry Wertz, president of Annual Event sponsor Data Papers, served as master of ceremonies.

The Association presented the first Central Division Locco Award to Ryan Hostrander (center) of Williamsport Area High School, shown here with his parents Michael and Karen Hostrander. Hostrander plans to attend the Pennsylvania College of Technology and earn a degree in welding technology and engineering.

Keynote speaker Dick Morris mingles with former MBA Central Division Advisory Board Member Roger Sheets at the cocktail reception.

24 < www.mbabizmag.com < July 2012

Blue Ocean Strategy Center

MBA Board of Governors Vice Chairman John Cline of Sunburst Electronics, Sherry Cline, Barbara Deist, MBA Board of Governors Chairman Dale Deist of Deist Industries, and former MBA Board Member James Rutkowski Jr. of Industrial Sales & Mfg. attended the event.

MBA Central Division Advisory Board Member Andree Phillips of Radiant Steel Products Company and Rick Fenstamaker welcome Dick Morris to Willliamsport.

Each guest received a complimentary copy of the Business Magazine, the Associationâ&#x20AC;&#x2122;s monthly business-to-business publication.

People Buzz MAXPRO TECHNOLOGIES NAMES FIELD SALES ENGINEER Maxpro Technologies recently promoted Don Nixon to field sales engineer. According to the company, this newly created position will provide customers in Pennsylvania and West Virginia with strong, personal field support and is reflective of Maxpro’s commitment to build and maintain continued growth in the high-pressure industry, particularly in the Marcellus gas market. Nixon, a registered professional engineer, has more than 20 years of experience in operating, field service and design engineering, including the last six at Maxpro as a mechanical engineer. Maxpro Technologies, headquartered in Fairview, Pennsylvania, specializes in high-pressure products, including valves, fittings and tubing and liquid pumps, air amplifiers and gas boosters. G.W. BECKER, INC. HIRES REGIONAL SALES MANAGER G.W. Becker, Inc., based in Hermitage, Pennsylvania, has hired Art Goforth as regional sales manager. Goforth brings more than 35 years of experience in the crane and hoist industry and will be responsible for all aspects of maintaining and developing the Northeast Ohio territory. Since 1980, G.W. Becker, Inc. has offered a full spectrum of overhead crane-related products and services.

DEPARTMENTS > Contact: Karen Torres

ERIEZ ANNOUNCES HIRES, PROMOTIONS Eriez®, a world authority in advanced technology for magnetic, vibratory and inspection applications, has hired three technical sales representatives — Craig Lorei, Christopher Ramsdell and Jayne Corey. Lorei earned a bachelor’s degree in marketing as well a master’s degree in business administration from St. Bonaventure University. He was formerly employed at Alliance Plastics as a business development specialist. Ramsdell earned a bachelor’s degree in business management from Pennsylvania State University, University Park. He went on to earn a master’s degree in business administration from Pennsylvania State Erie, The Behrend College. Ramsdell comes to Eriez from KD Industries, where he was involved in inside sales, sales support and purchasing. Corey earned a bachelor’s degree in business administration from Eastern Connecticut University and a master’s degree in business administration and public administration from Gannon University. Corey previously ran her own interior design company, worked in a family-owned civil engineering business and was employed in the industrial engineering department at Murata Electronics. In addition, John Blicha has been appointed to the newly created position of marketing communications manager. Blicha will be responsible for overseeing Eriez’ website and promotional activities including advertising, public relations, social media and trade show exhibitions. Blicha brings 16 years of experience as a marketing executive within the software, aerospace and manufacturing industries. Also, Jaisen Kohmuench has been promoted to the newly created position of deputy managing director, Eriez Flotation Division-USA. Kohmuench joined Eriez more than 10 years ago as a research engineer and most recently served as manager-R&D Process Group. In this new role, his responsibilities include management of all aspects of the daily operations for Eriez Flotation Division-USA.

THE ERIE COMMUNITY FOUNDATION NAMES THREE NEW BOARD MEMBERS; APPOINTS NEW CHAIR FOR 2012 The Erie Community Foundation (ECF), which is a collection of charitable endowments operating under the administrative umbrella of a single public charity, now has three new Board members, including: Thomas B. Hagen, chairman of Erie-based Custom Group Industries — Custom Engineering Co., Venango Machine Company and Lamjen, Inc. A retired U.S. Navy captain, Hagen served a total of 30 years both on active and reserve duty. For 40 years, he worked for Erie Insurance Group, where he rose from file clerk to chairman and chief executive officer. From 1995 to 1997, he served as Pennsylvania’s 28th and last Secretary of Commerce. Under Governor Ridge, he became the first Secretary of the Department of Community and Economic Development. Tim Hunter, president and CEO of Erie-based McInnes Rolled Rings, which manufactures forged steel seamless rolled rings, for various industrial applications. Hunter has spent the majority of his business career in manufacturing and currently serves on the boards of the Erie Regional Chamber & Growth Partnership and the Manufacturer & Business Association. In addition, he recently completed a term on the board of the North American Forging Industry Association, where he served as president. Lynn M. McBrier, Esq., president and CEO of Lyndal Enterprises doing business as Little Caesars Pizza. McBrier earned her Juris Doctorate degree from the University of San Francisco and practiced civil law in Huntington, New York at McSherry and Flynn, as well as at Conner & Associates in Erie, Pennsylvania. In addition, ECF has named Robert Dwyer as chair for 2012. Dwyer is a lawyer at the Knox McLaughlin Gornall & Sennett firm. He is licensed as a certified public accountant in Virginia and Pennsylvania. His practice concentrations are corporate law, business law, estate planning and estate administration. July 2012 > www.mbabizmag.com > 25

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