October 2011 Business Magazine

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

Skinner Power Systems, LLC Pennsylvania Manufacturer Powers Innovation, Customer Service for More Than a Century / Page 14

VOLUME XXIV, NUMBER 10

OCTOBER 2011

Special Issu Made in e:

PA

TRIED AND TRUE. You have pride in your business. You have built and groomed your business to be the success that it is today. All that you do is tried and true.

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Our local specialists can draw upon national and international resources. We pride ourselves in providing you with tried and true best practices tailored for your specific needs. That’s value.

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When you are ready for tried and true service, give us a call.

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World Class service for World Class clients.

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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 clients’ business needs. McGladrey, the McGladrey logo and the McGladrey Alliance signatures are used under license by RSM McGladrey, Inc. and McGladrey & Pullen, LLP.

14

October 2011

Blue Ocean Strategy Center

EDITORIAL >

FEATURES >

Urgent care centers offer convenient and cost-effective health-care solutions.

Rick York, owner of Lake Erie Portable Screeners in Lake City, Pennsylvania, discusses his company’s new line of portable screeners and the importance of the “Made in the USA” label.

7 / Health Matters STEPHEN PERKINS, MD

9 / Legal Brief

Why the growing gas industry in Pennsylvania is testing the limits of local government regulation.

14 / Skinner Power Systems, LLC

How interstate activities impact your company’s tax compliance.

KEVIN T. OVIATT

35 / Blue Ocean Strategy Executing your strategic plan to overcome cognitive hurdles.

ANGIE ANGUS

3

Discover how a rich heritage in steam, proven products, customer service and Pennsylvania manufacturing have separated this 143-year-old enterprise from the competition.

RUSSELL S. WARNER

11 / Financial Adviser

3 / Spotlight

26

26 / Manufacturing Showcase See our listing of companies that are proud to manufacture in Pennsylvania.

33 / On the Hill State Senator Jane Earll (49th District – Erie County) explains how legislative improvements in Harrisburg are moving Pennsylvania in the right direction.

BM UA SG IN ES S A Z I N E Manufacturer & Business Associati

on

VOLUME XXIV, NUMBER 10

OCTOBER 2011

INSERT / Training Catalog Find out about the Association’s upcoming professional development and computer training courses in our new quarterly Training Catalog!

EVENTS > 40 / Let’s Roll Flight 93 Memorial Ride

DEPARTMENTS > 5 / Business Buzz 24 / HR Connection

28 / Legal Q&A 45 / People Buzz

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22

Pennsylvania Manufacturer Powers Innovation , Customer Service for More Than a Century / Page 12

Special Iss Made in ue:

PA

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October 2011 > www.mbausa.org > 1

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SPOTLIGHT > by Jessica Crocker Lake Erie Portable Screeners (LEPS) is a Lake City, Pennsylvania-based manufacturing company with more than 35 years of related experience in the construction equipment business. Owner and mechanical engineer Rick York, who also owns the precision-machined parts and custom engineered assemblies operation, York-Seaway, recently spoke with the Business Magazine about LEPS’s new line of portable screeners and the importance of the “Made in the USA” label.

You have more than 30 years of experience in manufacturing. What is it about this industry that prompted you to make it a career?

When Bucyrus-Erie (BE) closed their Erie manufacturing operations in the mid 1980s, we were just recovering from the loss of business caused by the decline of the steel industry. Since our founding, nearly 80 percent of our business had been tied to steel. BE was looking for companies diverse enough to help in manufacturing replacement parts for their aging fleet of machines. With our background in working with all aspects of the steel industry, we were a perfect fit for their needs.

This closeness to their products and engineering challenges opened our eyes to the potential this industry had to offer.

York-Seaway was founded in 1975. What can you tell us about the evolution of the company and its subsequent sister operation, Lake Erie Portable Screeners? Why did you decide to maintain these operations in northwest Pennsylvania?

We started out in a 2,800-square-foot building in 1975, added on in 1978 and again in 1987.

In 1994, we were expanding and looking for opportunities and found that the Ajusta-Buckets Company (AB) was for sale. Their product lines of ground-engaging tools were a good fit and positioned us to provide private-label buckets for a major OEM here in the States. In 1997, a new 32,000-square-foot building was constructed for the machining segment of the business. Lake Erie Portable Screeners was established to create new business, which in turn provides job security for the existing employees, along with the creation of new job opportunities. I was born and raised in Erie, so my home will always be in northwest Pennsylvania. We’ve had offers to move to Jacksonville, Florida; Memphis, Tennessee; and Amarillo, Texas, but none offer the historical talent and expertise found around the Great Lakes Region.

Tell us about your new line of Pitbull™ portable screeners, which are widely used in the construction industry. How are they unique to others in the market?

When we first began exploring the screener market, we listened to what owners and previous owners of screeners had to say and incorporated their numerous comments to make our product unique. For example, the height of the loading area will accommodate a loader, excavator and a skid steer. The double-screening decks are fitted with split screens on each deck, with independent tighteners for ease in handling. We also added a double conveyor system, which allows the product to be quickly moved away from the work hopper and onto the stacking conveyor. The hydraulically controlled stacking conveyor can be lowered to five feet and elevated to 13 feet, so you can load a pick-up truck or build a stockpile. Our Torflex axle also is hydraulically operated, allowing the PitBull to be lowered onto the ground for fast setup at the job site.

Who are your typical customers and where are they located?

Among our many customers are recycling centers, scrap yards, developers and gravel pits around the world. We have sparked some interest from as far as Alaska, Hawaii, Africa and the Middle East.

Your company touts its products as having “exceptional Made in the USA quality.” How important is the “USA” label in terms of competitiveness and value?

We are proud that we are trying to promote our country by manufacturing a machine that can be used to benefit the global consumer. Our ultimate goal is to have everything manufactured here in the United States and to eventually purchase only American-made products, materials and machinery to manufacture these components. Given the state of the world economy, products made in the States are a bargain. USA = ITQ: Inexpensive Top Quality.

What’s ahead for Lake Erie Portable Screeners in the near term?

We are currently working towards a smaller version of the original design. Our PitBull Pup will have a greater appeal to the smaller contractor for those seeking “made in the USA quality” at a lower cost.

Is there anything you would like to add?

We are the only country with the opportunity and responsibility to do the right thing by investing in ourselves – and it may be the only way we can save ourselves from our current economic problems.

Opportunities are only as far away as your dreams, so never be afraid to go out on a limb, because that is where the fruit is. Remember: “Endeavor to persevere.”

For more information about Lake Erie Portable Screeners and York-Seaway, visit www.pitbullscreeners.com and www.yorkseaway.com.

VOL. X XIV, NO. 10 OCTOBER 2011 Manufacturer & Business Association Board of Governors

Editor in Chief Executive Editor Managing Editor & Senior Writer Communications Specialist

Yvonne Atkinson-Mishrell John Cline Dale Deist Bill Hilbert Jr. Timothy Hunter Dan Ignasiak Richard Knight J. Gordon Naughton John B. Pellegrino Sr., P.E. Dennis Prischak Robert S. Pursell Lorenzo Simonelli Phil Tredway Ralph Pontillo rpontillo@mbausa.org John Krahe jkrahe@mbausa.org Karen Torres ktorres@mbausa.org Jessica Crocker jcrocker@mbausa.org

Contributing Writers

Angie Angus Kevin T. Oviatt Stephen Perkins, MD Russell S. Warner

Photography

Ron Stephens La Mirage Studio 814/835-1041 Will Babin Imagepoint Pittsburgh 412/621-3165 Lake Erie Portable Screeners Veronica Pusa

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: With a tradition of reliable products, fair price and customer support, Skinner Power Systems, LLC has powered innovation and customer service for more than a century. For more information, see Page 14.

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 2011 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.

October 2011 > www.mbausa.org > 3

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Business Buzz LORD CORPORATION RECEIVES OUTSTANDING CUSTOMER SERVICE AWARD LORD Corporation – a leading supplier of thermal management materials, adhesives, coatings and encapsulants to the electronics, LED and solar industries – has been recognized for outstanding customer service by Vicor.

An industry leader in the manufacture of modular power components and power systems headquartered in Andover, Massachusetts, Vicor sells its power converters and systems to the communications, data processing, industrial control, test equipment, medical, and defense electronics markets. LORD was one of only five companies recognized for outstanding customer service at Vicor’s annual supplier day that took place earlier this year.

"LORD Corporation prides itself on customer service," said Jim Greig, sales and marketing manager, Electronic Materials.

"To be recognized by Vicor for exceptional performance in this area is a great reward for the whole team."

Since the early 1990s, LORD Corporation has been a major supplier to Vicor.

DEPARTMENTS > Contact: Jessica Crocker

Initially using a LORD thermally conductive epoxy potting system for its DCDC converters, Vicor went on to apply several LORD formulations to its production process. LORD has developed thermally conductive silicone encapsulants and thermally conductive low-modulus silicone materials that allowed Vicor to advance its production methods for surface-mount devices.

Further custom formulations were developed for Vicor in the early 2000s for military and aerospace applications.

For more information, visit www.lord.com.

MILLCREEK COMMUNITY HOSPITAL INCREASES TRANSITIONAL CARE UNIT Millcreek Community Hospital’s transitional care unit (TCU) – the region’s only hospital-based unit – recently increased in size from 14 to 24 beds. Part of the LECOM Institute for Successful Aging, the unit opened to patients in early June. Additionally, the Institute expanded its Acute Care for the Elderly (ACE) unit, from eight to 14 beds.

The TCU and ACE are unique to the region and offer benefits to patients and the community that can be summarized

MAXPRO TECHNOLOGIES EXPANDS FACILITY, HOSTS OPEN HOUSE

as “better care at less cost,” said James Y. Lin, D.O., the Institute’s director and the Hospital’s vice president for Senior Services and Adult Living.

“Transitional care units improve care by helping elderly patients recover more fully after their release from acute-care units following surgery or hospitalization for serious illness,” said Lin. “Our goal is to restore or enhance their previous level of independence.”

Millcreek Community Hospital’s TCU is the region’s only sub-acute rehabilitation unit located in a hospital with 24-hour physician coverage and immediate access to lab, X-ray and other ancillary services.

For more information, visit www.millcreekcommunityhospital.com.

PENN STATE BEHREND RECEIVES $3.7-MILLION GIFT FOR MEDICAL PLASTICS INITIATIVES The School of Engineering at Penn State Erie, The Behrend College, recently received state-of-the-art SIGMASOFT® 3D Polymer System Simulation software, a gift valued at $3.7 million, from SIGMA Plastic Services, Inc., located outside of Chicago.

With this software, the college has new technical capabilities for its soon-to-open Medical Plastics Center of Excellence and current Medical Plastics certificate program, two initiatives that address the emerging medical plastics market.

“Thanks to SIGMA Plastic Services, our students and faculty members will be able to develop the next generation of medical devices. This is a great partnership between academia and industry that ultimately benefits our students,” said Dr. Ralph Ford, director of the School of Engineering.

Maxpro Technologies recently hosted nearly 200 vendors, customers, family and friends at an open house, providing an opportunity for the Fairview, Pennsylvania-based manufacturer to show off its 4,800-square-foot facility expansion. Founded in 1995, Maxpro moved to its current location, which now boasts 13,300 square feet of office and warehouse space, in 2001. Here, Maxpro President Paul Bowser (center) shows off the company’s 30,000 PSI Power Pack.

Penn State Behrend’s Medical Plastics Center of Excellence is an applied research and outreach center that supports companies in the development of new medical devices and packaging, technologies that could not exist without advanced plastics materials.

For more information, visit behrend.psu.edu.

October 2011 > www.mbausa.org > 5

TIM HUNTER / OWNER McINNES ROLLED RINGS CUSTOM MANUFACTURER ERIE, PA SINCE 1992 70 EMPLOYEES

WORKING FASTER THAN THE DAY BEFORE CHALLENGE: Tim’s business is all about speed.

From fabricating to processing to shipping, it’s about doing it faster than the competition. Tim needed his cash flow to keep up with his inventory and a bank that could help him stay ahead of it all.

SOLUTION: Tim had the Cash Flow Conversation with his PNC banker, who put his detailed knowledge of the manufacturing industry to work. Utilizing lockbox services, Tim was able to get payments into his account faster — and with online tools like PINACLE®, he was able to track and manage his cash position from anywhere, 24/7.

ACHIEVEMENT: McInnes Rolled Rings has expanded its market share significantly — and continues to grow.

Tim’s cash flow is keeping pace and his inventory is turning faster than ever.

WATCH TIM’S FULL STORY at pnc.com/cfo and see how our solutions for manufacturers can help meet your business challenges, too. Call 1-877-535-6314 or visit a PNC branch to start your own Cash Flow Conversation today.

ACCELERATE RECEIVABLES IMPROVE PAYMENT PRACTICES INVEST EXCESS CASH LEVERAGE ONLINE TECHNOLOGY ENSURE ACCESS TO CREDIT

The person pictured is an actual PNC customer, who agreed to participate in this advertisement. McInnes Rolled Rings’ success was due to a number of factors, and PNC is proud of its role in helping the company achieve its goals. All loans are subject to credit approval and may require automatic payment deduction from a PNC Bank Business Checking account. Origination and/or other fees may apply. PNC and PINACLE® are registered marks of The PNC Financial Services Group, Inc. BBK-5820 ©2011 The PNC Financial Services Group, Inc. All rights reserved. PNC Bank, National Association. Member FDIC

Health Matters

EDITORIAL > by Stephen Perkins, MD

Urgent Care Centers Offer Convenience, Cost-Effective Services Urgent care centers are not new to the world of health care, but their increasing popularity certainly is. In the last decade, urgent care centers have witnessed a dramatic surge in usage.

There are two major reasons for this growth. One, urgent care centers deliver many services that cannot be provided in a primary care physicianâ&#x20AC;&#x2122;s office. Two, many people appreciate the fact they have access to these services outside of normal business hours and without having to make an appointment.

Among the services that urgent care centers provide that may not be available in a primary care physicianâ&#x20AC;&#x2122;s office are care for minor fractures and certain diagnostic tests, such as chest X-rays. Some other non-emergency conditions that can be treated at an urgent care center would include: a twisted or sprained ankle, cuts, lacerations, general wound care, animal bites and minor skin rashes.

It is important to understand that urgent care centers are not for everyone and they are not ideal for every medical situation.

Benefits of Urgent Care Centers t .BOZ JOTVSFST PGGFS DBSF BU urgent care centers as a covered benefit. t 5IFZ BSF MFTT FYQFOTJWF UIBO going to an emergency room for acute non-emergency care. t /PU VTJOH BO FNFSHFODZ SPPN frees up more space there for real emergencies. t 5IFSF JT OP OFFE GPS BO appointment. t 6SHFOU DBSF DFOUFST PGUFO IBWF more flexible hours â&#x20AC;&#x201C; including

nights and weekends â&#x20AC;&#x201C; than most physician offices. t 5IFTF DFOUFST BSF DPOWFOJFOU for people traveling when an emergency arises.

Urgent Care Centers Affiliated with Insurers Some urgent care centers are affiliated with existing health-care delivery systems. Urgent care centers that are affiliated with existing delivery systems make it easier for your primary care physician to get a report of any action taken or any medication prescribed. Ideally, an urgent care center should be an extension of your primary care physicianâ&#x20AC;&#x2122;s office.

When to Go to an Emergency Room Urgent care centers are not ideal for all situations. Certain conditions are potentially life-threatening emergencies and are best treated in an emergency room. These include: t " IFBSU BUUBDL PS TFWFSF chest pain t " NBKPS JOKVSZ PS CVSO t 1PJTPOJOH t 4FWFSF CMFFEJOH t 1BTTJOH PVU t #FJOH VOBCMF UP NPWF PS MPTT of feeling in limbs t #FJOH VOBCMF UP DBUDI your breath t )FBE PS TQJOF JOKVSZ Urgent care centers work best when used as a complement to primary care, providing service when a timely visit to a physicianâ&#x20AC;&#x2122;s office is not available, or after regular office hours when the only other alternative would be an emergency room visit.

The level of care at most urgent care centers is high. A study by the North American Association for Ambulatory Urgent Care determined that approximately 97 percent of all urgent care centers are staffed by full-time physicians and medical staff.

Many urgent care centers are located near pharmacies, so drugs are easy to pick up. Depending on your situation, an urgent care center can be a smart choice.

But, it is important to understand that being treated by a doctor who knows you is always the preferable choice for persons who want the highest level of care. Receiving treatment from your doctor â&#x20AC;&#x201D; or, when necessary, following your doctorâ&#x20AC;&#x2122;s advice to go to an urgent care center or emergency room for care â&#x20AC;&#x201D; is often your best option.

For more information about urgent care center services, visit www. upmchealthplan.com.

Stephen Perkins, M.D., is vice president, Medical Affairs, 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 â&#x20AC;&#x201C; which offer a full range of insurance programs and products.

October 2011 > www.mbausa.org > 7

SaveToday.

Today.

Save Today.

SaveTomorrow.

Tomorrow.

Save Natural gasisismore more efficientthan than mostfuels. fuels. Theprocess process of producing Natural Natural gas gas is moreefficient efficient thanmost most fuels.The The processofofproducing producing electricitywastes wastesabout about70% 70%ofofthe theinitial initialraw rawenergy energyfound foundinincoal. coal.InInfact, fact, the electricity electricity wastes about 70% of the initial raw energy found in coal. In fact,the the generation,transmission, transmission,and anddistribution distributionofofelectricity electricityloses losesmore moreelectrical electricalenergy energy generation, generation, transmission, and distribution of electricity loses more electrical energy than isactually actually usedbybyconsumers. consumers. Naturalgas gas transmissionfrom from its sourcetoto than than is is actually used used by consumers. Natural Natural gastransmission transmission fromitsitssource source to losesonly onlyabout about10% 10%ofofinitial initialenergy. energy. loses loses only about 10% of initial energy.

It’s easieron on theenvironment. environment. Uponcombustion, combustion, naturalgas gas produces43% 43% less It’s It’s2easier easier on the the environment.Upon Upon combustion,natural natural gasproduces produces 43%less less 2 CO than coal and 28% less than home heating oil.

CO 2 than coal and 28% less than home heating oil.

CO than coal and 28% less than home heating oil.

It’s moreabundant abundant andaccessible accessible thanwas was knownuntil until recently.Discoveries Discoveries It’s It’s more more abundantand and accessiblethan than wasknown known untilrecently. recently. Discoveries of enormousU.S. U.S. gasreserves reserves andsafe, safe, cost-efficientmethods methods to tapit itpromise promise to of of enormous enormous U.S.gas gas reservesand and safe,cost-efficient cost-efficient methodstototap tap it promisetoto greatly reduceour our relianceononforeign foreign oil.InInfact, fact, theUnited United Statesisisnow now thelargest largest greatly greatly reduce reduce our reliance reliance on foreignoil. oil. In fact,the the UnitedStates States is nowthe the largest producer ofnatural natural gasininthe the world. producer producer of of naturalgas gas in theworld. world.

All ofthese these benefitsmake make naturalgas gas theclear clear choicetotobest best fuelour our future.

All All of of these benefits benefits makenatural natural gasthe the clearchoice choice to bestfuel fuel ourfuture. future.

Legal Brief

EDITORIAL > by Russell S. Warner

Growing Gas Industry Tests Limits on Local Government Regulation of Drilling While the Marcellus Shale gas industry is booming across Pennsylvania, local governments are wrestling with how, and to what extent, they can regulate the growing drilling and production activities within their boundaries.

The governor’s Marcellus Shale Advisory Commission Report, released on July 22, 2011, indicates that more than 800 municipalities and counties in the Marcellus Shale region have adopted various zoning regulations or ordinances. Many of those municipalities have attempted to restrict oil and gas operations through local ordinances that provide for disparate treatment of the drilling industry.

Local governments are limited, however, in regulating the oil and gas industry under Pennsylvania's Oil and Gas Act (“Act”). The Act “preempts and supersedes the [local] regulation of oil and gas wells,” subject to certain exceptions. The unclear scope of that preemption, and the increasing tension between local municipalities and the oil and gas industry, has resulted in a number of lawsuits across the state regarding such local regulations.

In two leading cases, the Pennsylvania Supreme Court has provided guidance as to which types of ordinances are invalid under the Act. In Huntley & Huntley, Inc. v. Borough Council of the Borough of Oakmont, the Court upheld a zoning ordinance that placed restrictions on drilling in a residential zoning district, finding the ordinance was not preempted by the Act. The Huntley decision recognized that the Act “totally preempts local regulation of oil and gas development” with the exception of ordinances adopted under the Municipalities Planning Code (“MPC”) or the Flood Plain Management Act (“FPMA”). The Court then concluded that even ordinances

adopted under the MPC or the FPMA may be preempted if either: (1) the ordinances “impose conditions, requirements or limitations on the same features of oil and gas well operations regulated by ‘the Act’” (meaning the “technical aspects of well functioning . . . rather than the well's location”); or (2) the ordinances “accomplish the same purposes as set forth in” the Act. Consequently, the zoning ordinance in Huntley restricting well drilling in residential areas was upheld.

In Range Resources-Appalachia, LLC v. Salem Township, the Court ruled that a local ordinance that established a comprehensive regulatory scheme of oil and gas development was preempted both because it attempted to regulate the same aspects of oil and gas development addressed by the Act, and because its stated purpose overlapped with the stated goals and purposes of the Act. In Range, the invalidated ordinance attempted to, among other things: require permitting procedures specifically for oil and gas wells; impose bonding requirements on well drilling; regulate well heads and capping of unused wells; and regulate site restoration. The Range decision indicates that a local ordinance that specifically targets oil and gas operations may be invalid, especially if it gives a municipality “virtually unbridled discretion to deny permission to drill.”

Following those decisions, in Penneco Oil Co., Inc. v. County of Fayette, the Pennsylvania Commonwealth Court ruled that a local zoning ordinance was not preempted despite containing specific regulations on the location and appearance of oil and gas wells, because those provisions were directed at protecting the public's health, safety and welfare, and the ordinance did not provide the county with “arbitrary authority to deny permission to drill.”

The Court also held that the ordinance's requirement that a zoning certificate be obtained before drilling commenced was not preempted because that requirement applied to all development.

A number of other lawsuits challenging various local oil and gas ordinances are now pending at various stages in Pennsylvania. In addition, proposed legislation was introduced this year in the Pennsylvania Senate (Senate Bill 1100) seeking to create a model municipal ordinance to provide uniform zoning and other municipal planning regulations regarding oil and gas operations. In the absence of such legislation, the contours of the scope of preemption under the Act and local governments' regulatory powers will likely continue to be defined by the courts on a case-by-case basis.

For more information on regulations relating to oil and gas development, contact Russell S. Warner at MacDonald, Illig, Jones & Britton LLP at 814/8707759 or rwarner@mijb.com.

Russell S. Warner is the managing partner in the law firm of MacDonald, Illig, Jones & Britton LLP. His practice includes representation of businesses, financial institutions and municipal entities regarding business and environmental matters, as well as acquisitions, capital projects, real estate development projects and financing transactions.

October 2011 > www.mbausa.org > 9

Something as simple as a leaf could be gone.

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It’s all about choice.

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Printing Concepts is certified green with SFI, FSC and PEFC, offering paper choices both socially and environmentally responsible, meaning sustainable.

It’s an easy choice to be green.

Let Printing Concepts help you develop realistic, cost-effective strategies to use “green” paper on your next printing projects.

Printing Concepts, Inc. 4982 Pacific Avenue Erie, PA 16506 800-540-7805 / 814-833-8080 fax 814-833-4208 www.printingconceptsonline.com

Financial Adviser

EDITORIAL > by Kevin T. Oviatt

Determining Nexus: How Interstate Activities Impact Your Companyâ&#x20AC;&#x2122;s Tax Compliance Not all state taxes are created equal. For your companyâ&#x20AC;&#x2122;s tax compliance, you are familiar with federal and Pennsylvania tax requirements. What you have to remember, however, is that not every state taxes in the same manner as the Commonwealth.

Generally speaking, most states impose an income-based tax, a franchise tax or a gross-receipts tax, and occasionally they impose multiple types of taxes.

States can impose their taxes on foreign businesses when differing levels of nexus are met, though the definition of nexus varies with each state and each type of tax.

In order to have nexus with a state, you generally must have some type of presence in a state, whether physical or economic. While every state is different in its application of nexus, the goal of each is to ensnare as many foreign companies as possible. Congressâ&#x20AC;&#x2122;s only protection is Public Law 86-272, which limits a stateâ&#x20AC;&#x2122;s ability to levy an income tax where the only activity conducted by a company in a state is the solicitation of sales of tangible personal property.

The key is that P.L. 86-272 only protects a companyâ&#x20AC;&#x2122;s activities regarding the imposition of an income tax â&#x20AC;&#x201C; and only when you are selling tangible personal property. The law does not protect your company against a franchise tax or a gross-receipts tax.

To better understand the differences in nexus standards, a comparison between two of Pennsylvaniaâ&#x20AC;&#x2122;s neighboring states â&#x20AC;&#x201C; Ohio and New York â&#x20AC;&#x201C; could help.

New Yorkâ&#x20AC;&#x2122;s Physical Nexus New York utilizes an income-based tax that requires a physical presence, and P.L. 86-272 protection is applicable.

While this list is not exhaustive, in-state

activities that can create nexus with New York include: t 6TF PG BGmMJBUFT BOE BHFODJFT UP represent you in New York t $VTUPNFS USBJOJOH JO /FX :PSL t *OTUBMMBUJPO PG QSPEVDU JO /FX :PSL t 5FDIOJDBM BTTJTUBODF SFQBJS JO New York t 6TF PG DPNQBOZ PXOFE WFIJDMFT UP ship into New York t -PDBUJPO PG QSPQFSUZ BOE PS warehouses in New York t )PNF PGmDFT MPDBUFE JO /FX :PSL For New York, the determining factor is whether you have some type of physical presence in the state, such as using your companyâ&#x20AC;&#x2122;s trucks on New York roads, having locations or offices in the state, performing services in-state (even if related to your product), or employing individuals in New York.

Ohioâ&#x20AC;&#x2122;s Economic Nexus Ohio utilizes a gross receipts tax called the Commercial Activity Tax (CAT). Although nexus is required to impose the tax on foreign businesses, the protection provided in P.L. 86272 does not apply. Accordingly, the mere solicitation of sales (whether by company personnel or agents), as long as it is done in-state, could create nexus.

Ohio uses an economic presence in determining if nexus is achieved and has created a specific â&#x20AC;&#x153;bright-lineâ&#x20AC;? test to determine if there is economic presence in the state.

Nexus for the CAT tax is imposed if any of the following apply: t 5IF DPNQBOZ IBT BU MFBTU in property or payroll in Ohio;

In both states, there are pitfalls where certain activities can expose your company to tax. However, the CAT tax is considered more aggressive because the tax can be imposed if your only activity is sales (if threshold is met) in Ohio, whereas your activities in New York have to rise to a certain level of physical presence.

All states have a different definition of nexus; however, the type of tax can be an indicator of the kinds of activities that will expose your company to tax. If you find that your company is reaching into other states, you need to analyze the nexus standards, the type of tax and how they apply to your activities in your target states. With careful planning, you can limit your companyâ&#x20AC;&#x2122;s exposure to state taxes.

For more information on interstate tax compliance, please contact Kevin Oviatt at McGill, Power, Bell & Associatesâ&#x20AC;&#x2122; Meadville office at 814/724-5890 or koviatt@mpbcpa.com.

Kevin T. Oviatt, CPA, CVA, is a manager with the accounting and financial services firm McGill, Power, Bell & Associates, LLP. Oviatt, who also is a Certified Valuation Analyst (CVA), focuses his practice in tax planning and accounting, business valuation and litigation support services. A member of the firmâ&#x20AC;&#x2122;s Valuation and Litigation Services Group and the Manufacturing and Distribution Services Group, he has substantial experience in the manufacturing and construction industries.

t 5IF DPNQBOZ IBT BU MFBTU in sales in Ohio; or t 5XFOUZ mWF QFSDFOU PG UPUBM property, total payroll or gross receipts are in Ohio.

October 2011 > www.mbausa.org > 11

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Skinner Power Systems, LLC Pennsylvania Manufacturer Powers Innovation, Customer Service for More Than a Century The bright blue of Skinner Power Systems, LLC’s single-stage steam turbines is unmistakable in a sea of steely grays. But color choice isn’t the only thing that stands out about Skinner, whose origins date back to the late 1800s.

Having weathered two world wars, the Great Depression and a host of deep recessions, current owner and President Klaus P. Fischer attributes the manufacturer’s longevity to a tradition of reliable products, innovation, fair price and customer support.

It’s the Erie-based company’s rich heritage in steam, proven products, customer service, and Pennsylvania manufacturing that have separated Skinner from the competition – and earned the 143-year-old enterprise a solid reputation in the production of small to mid-size steam turbine electric generator packages for clients around the world.

“Skinner is a company that was well known in the industry for steam-related products for a long, long time,” says Fischer.

“More importantly, from a historical standpoint, I would say that Skinner Engine Company, our predecessor, found a way to adapt.”

Skinner’s modern 14,000-square-foot facility produces single-stage steam turbines up to 3,000 horsepower and turbine generator packages up to 2 megawatts.

14 < www.mbausa.org < October 2011

Rich Heritage in Steam

Founded in 1868 in Herkimer, New York, the former Skinner Engine Company opened its Erie manufacturing plant in 1873, and because of its access to rail and waterways, later relocated its headquarters there. It was founder LeGrand Skinner who not only molded the company’s reputation for innovation, but also set the high standards for quality and performance by which Skinner is known.

After more than a century of various acquisitions and evolution in product and production – from the steam and unaflow engines under LeGrand Skinner’s leadership, to the industrial mixers, steam turbines and pumps in later years – the turbine product lines were purchased in 2002 by Fischer.

Today, as one of a handful of steam turbine manufacturers in the United States, Skinner Power Systems continues to produce single-stage steam turbines and electric generator packages for companies across the globe. Customized to each end-user’s specific needs and steam conditions, the generator packages are designed as an integrated system that provides reliable and cost-effective operation throughout its lengthy life span.

“Steam-powered equipment is very simple to operate and its longevity is in decades,” says Sales Manager Jeff Skonieczki.

“A typical steam turbine will last 50 years. So when people start looking at steam equipment, the investment isn’t over a few years, it’s over the life of the company.”

market – the global petrochemical industry, whose refineries have the equipment needed to tap into steam-generated power – accounts for upwards of 50 percent of both parts and new turbine sales.

“Our customers, they have steam, so they spend a little more money to put in a steam turbine rather than buying an electric motor,” explains Fischer. “They can create mechanical power and they don’t have to pay a cent to the electric utility.”

Along with creating a product that can yield real cost savings, Skinner, which utilizes a strong vendor and supply network to keep its prices low, also has earned a reputation for building “what no one else can build.”

As a matter of fact, for those with older Skinner equipment in need of updates, the Skinner SB series line offers the simplicity of ball bearing rotors, low initial cost and extremely high reliability – along with modern upgrades such as digital touchpad controls.

“We still build that same basic piece of equipment,” notes Mulligan, “but we take every piece of technology from today’s era – electric governors, vibration sensors, monitors – and we build a control panel that looks like something off the space shuttle.” >

Proven Products, Competitive Pricing

While the name and ownership have changed throughout the years, what hasn’t changed is the time-tested assembly and design of Skinner’s turbines and turbine generator packages.

“The metallurgy or the quality of metals has progressed,” explains Operations Manager Richard Mulligan, “but it’s the same nuts and bolts, the same wrenches that were used back in the 1930s.”

The current S/SB turbine lines include models that range from 0.5 horsepower to 3,000 horsepower and generator packages that can produce up to 2 megawatts – powering everything from pumps and fans to blowers, compressors and mills in paper and sugar plants, food and palm oil processors, hospitals and educational facilities across the globe. Skinner’s largest

About: Skinner Power Systems, LLC manufactures single-stage steam turbines of proven design for mechanical drive and electric power generation for petrochemical, marine and other industrial services.

History: Founded as Skinner Engine Company in 1868 by Le Grand Skinner, the company has had a manufacturing presence in Erie since 1873. Today, Skinner Power Systems, purchased in 2002 by President Klaus P. Fischer and a team of associates, carries on the proud heritage in steam.

Operations: Headquartered at a modern 14,000-square-foot facility at 8214 Edinboro Road in Erie, Pennsylvania, Skinner produces singlestage steam turbines up to 3,000 horsepower, turbine generator packages up to 2 megawatts, and aftermarket parts for customers across six continents.

Applications: Refineries, pulp and paper mills, sugar mills, palm oil, food processing, educational facilities, hospitals, biomass operations, waste-toenergy plants, combined cycle plants, and distilleries, among others.

Experience: Skinner’s management, administrative and production staff boasts more than 110 years of steam turbine experience.

For more information: Visit www.skinnerpowersystems.net, call 814/868-8500 or email sales@skinnerpowersystems.net.

October 2011 > www.mbausa.org > 15

Moving Full Steam Ahead in International Markets

each into account, Skinner’s dedicated and experienced professionals are available at each step, assisting with turbine troubleshooting, setup, maintenance, and, if necessary, repair.

One of the most fascinating aspects of turbines is the renaissance currently under way in various industries and developing countries. Customers from around the globe without steady and consistent access to electricity – including those in Algeria, Turkey, the United Arab Emirates, Thailand and Africa – rely on Skinner’s steam-powered turbines to power operations in the most remote of locations.

Skinner doesn’t see its small size as a challenge, but rather as its strength.

“In any given year, no less than 50 percent of our sales have been export sales,” says Fischer. “We have customers in the middle of the jungle in Indonesia who don’t have access to electric utility service. If they want power, they put in a turbine generator set.”

For example, “The biggest complaint I hear from new customers is that none of our competitors want to talk to them,” adds Skonieczki. “Here you get someone who answers the telephone every time it rings. That is something that most people aren’t used to in this world right now.”

“Price is the main thing,” echoes Skonieczki. “It’s a real price competitive market, and even more so overseas.”

It was those overseas customers that sustained Skinner’s business during the challenging economic climate of the last several years.

“Except from the months of January through March of 2009, when everything came to a standstill, we never skipped a beat,” says Fischer, “mostly because so much of our business is outside of the United States. There were countries in the world that never slowed down – and we were the beneficiaries of that.”

Commitment to Customer Service

Producing quality and affordable equipment that lasts is only half the Skinner story. The other? A commitment to service and support that dates back to the company’s early years – and continues to be carried out by the present-day Skinner team, which includes Fischer, Skonieczki, Mulligan, Office Manager Cindy Swindlehurst and three production employees.

Working closely with their customers throughout the process and taking the specific needs of Skinner’s turbines are found in everything from refineries and pulp and paper mills, to educational facilities, hospitals and distilleries around the world.

16 < www.mbausa.org < October 2011

“Being smaller means we’re more flexible,” says Skonieczki.

“It’s not a problem to change something for any particular customer. If they want some blue instead of green, ‘Okay. Tell us.’ Very regimented companies have difficulties responding to things like that.”

Leading the team and the charge for the company’s commitment to prompt and courteous customer service is Fischer, who cultivates a culture he learned in his Army days.

“No matter your rank, everyone is entitled to respect,” says Fischer.

That respect is reflected in the storied reputation and heritage of the Skinner Engine Company and in today’s Skinner Power Systems products. And while the steam turbine may be seen as an “old product in a ‘mature' market,” for Skinner, the opportunities have only begun to develop.

As he eyes a map covered in neon Post-Its, each one representing Skinner’s sales representatives around the world, Fischer sees a future that is bright.

“I see good things,” he insists. “There are a lot of spots, a lot of countries up there that need to have Post-Its on them that don’t.

Those are all opportunities.”

Skinner Power Systems: A rich heritage in steam and Pennsylvania manufacturing that has powered innovation and customer service for more than a century.

For more information, visit www.skinnerpowersystems.net.

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Company PROFILE

Ž Eriez  2200  Asbury  Road  Erie,  PA   16514-­0608 Phone:  814-­835-­6000  1-­888-­300-­ERIEZ  (3743) Web  site:  www.eriez.com

Eriez

E-­mail:  eriez@eriez.com

Eriez Expands in Pennsylvania and Around the World â&#x20AC;&#x153;We  are  proud  and  excited  to  report  that  Eriez  continues  to  grow  at  home  in  Penn-­ sylvania,  and  across  the  globe,â&#x20AC;?  said  Tim  Shuttleworth,  Eriez  President  and  CEO.  Eriez  recently  announced  the  expansion  of  operations  in  the  United  States,  Canada,  China  and  India.

In  Pennsylvania,  Eriez  purchased  a  114,000  square  foot  building  15  miles  from  its  Head-­ quarters  facility  in  Erie.  The  new  building  will  house  the  companyâ&#x20AC;&#x2122;s  5-­Star  ServiceÂŽ  Center  and  manufacturing  of  Eriezâ&#x20AC;&#x2122;  largest  equipment  including  Recycling  Systems,  &ROXPQ )ORWDWLRQ &HOOV DQG +\GURĂ&#x20AC;RZÂ&#x160; )OXLG Filtration  systems. Â

Eriez-­India  is  moving  to  a  new  factory  in  Chennai,  one  of  the  largest  industrial  es-­ tates  in  Asia,  to  produce  core  magnetic  and  vibratory  equipment.  â&#x20AC;&#x153;While  other  companies  are  struggling,  Eriez  is  thriving,â&#x20AC;?  said  Shuttleworth.  â&#x20AC;&#x153;We  believe  that  innovation,  coupled  with  great  customer  service,  is  vital  to  maintaining  our  success.  Therefore,  itâ&#x20AC;&#x2122;s  more  important  than  ever  for  us  to  continue  to  introduce  new  technologies  that  help  our  customers  main-­ WDLQ HIÂżFLHQF\ DQG LQFUHDVH WKHLU SURÂżWV while  offering  the  world-­class  support  our  customers  deserve.â&#x20AC;?

Eriez  Flotation  Group  in  Vancouver,  British  Columbia,  Canada  moves  to  a  new  larger  building  in  early  2012  to  support  the  design,  HQJLQHHULQJ DQG VDOHV RI LWV YHU\ ODUJH Ă&#x20AC;RWD-­ tion  columns  and  cells.

Eriez-­China  added  a  second  manufactur-­ ing  operation  in  Tianjin  to  supplement  their  FXUUHQW 4LQKXDQJGDR SODQW WR EXLOG ÂżOWUDWLRQ magnetic  and  recycling  equipment. Â

Stress Relieving capabilities in your backyard. Â&#x2039; ;LTWLYH[\YL YHUNPUN MYVT ĂĄ- [V ĂĄÂ&#x2039; Âť /PNO _ Âť >PKL _ Âť š 3VUN Â&#x2039; ;LTWLYH[\YL <UPMVYTP[` WS\Z VY TPU\Z ĂĄÂ&#x2039; (SS V]LUZ 4VUP[VYLK ^P[O ;V\JO :JYLLU ;LJOUVSVN` Â&#x2039; +PNP[HS J`JSL YLJVYKPUN H]HPSHISL ^P[O L]LY` SVHK

1856 State Route 588 | Zelienople, PA 16063 P: 724.452.8750 | F:724.452.0484 www.pennaflame.com

20 < www.mbausa.org < October 2011

Company PROFILE Ridg-­U-­Rak,  Inc. 120  South  Lake  Street North  East,  PA  16509 Phone: 814/725-­8751 Fax: 814/725-­5659 E-­mail: sales@ridgurak.com Website: www.ridgurak.com Number  of  Employees: 350

Ridg-U-Rak, Inc.

Founded: 1942

Company  Description: Ridg-­U-­Rak  has  a  69-­year  history   of  integrity  in  supplying  storage   rack  systems.  As  a  designer,  manu-­ facturer  and  integrator  of  Material  Handling  and  Distribution  Systems,  the  company  provides  the  latest  in  storage  technology  throughout  the  United  States,  as  well  as  other  parts  of  the  world.

Under  President  and  CEO,  John  B.  Pellegrino  Sr.,  P.E.,  the  company  has  attained  a  prominent  industry  role  in  the  many  engineering  advances  in  rack  safety  and  design  over  the  years.  In  April  2008,  Ridg-­U-­Rakâ&#x20AC;&#x2122;s  patented  Seismic  Base  Isolation  6\VWHP ZDV DZDUGHG ÂżUVW SODFH KRQ-­ ors  for  â&#x20AC;&#x153;Excellence  for  Innovationâ&#x20AC;?  in  the  earthquake  mitigation  category  at  the  National  Earthquake  Conference  held  in  Seattle,  Washington.  Ridg-­U-­ Rak  received  the  award  for  develop-­ ing  a  product  that  would  reduce  the  risk  of  product  loss,  damage  and  personal  injury  around  storage  rack  installations  during  seismic  events.

With  more  than  350  employees  and  200,000  square  feet  of  manufactur-­ ing  space,  the  company  utilizes  auto-­ mated,  computer-­controlled  produc-­ tion  lines  and  is  capable  of  producing  over  2  million  pounds  of  rack-­storage  V\VWHPV SHU ZHHN 3DLQWLQJ DQG ÂżQ-­ ishing  lines  comply  with  environmen-­ tal  guidelines,  and  throughout  the  manufacturing  process,  strict  quality  policies  are  followed  to  ensure  a  reli-­ DEOH ÂżQLVKHG SURGXFW Ridg-­U-­Rak  has  long  been  engaged  in  reducing  its  environmental  imprint.  From  recycling  programs  to  major  transformations  in  manufacturing  processes,  the  corporate  philosophy  is  to  do  what  is  necessary  to  meet  21st  century  sustainability  expecta-­ tions. Â

a  complete  line  of  Selective  Racks,  Drive-­In  Racks,  Push-­Back  Racks,  Cantilever  Systems,  Shelving,  Flow  Racks  and  many  specialty  products.  A  nationwide  network  of  more  than  125  professional  material-­handling  distributorships  is  complemented  by  the  companyâ&#x20AC;&#x2122;s  regional  sales  managers,  who  work  with  customers  and  distributors  to  bring  the  factory  WR WKH ÂżHOG ,Q DGGLWLRQ 5LGJ 8 5DN SURYLGHV ÂżHOG HQJLQHHULQJ DQG installation  services  with  factory  supervision. Â

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2006  Norman  L.  Cahners  $ZDUG Presented  by  Material  Handling  Education  Foundation,  Inc.,  Ridg-­U-­Rak  was  recog-­ nized  for  ongoing  dedication  to  its  scholarship  program  since  1989,  and  as  an  outstanding  ex-­ ample  of  commitment  and  return  to  the  Industry.

2008  Excellence  for  Innova-­ WLRQ $ZDUG The  National  Earth-­ quake  Conference,  chaired  by  four  earthquake  and  emergency  consortia  groups,  presented  Ridg-­U-­Rak  this  award  for  developing  a  product  that  would  reduce  the  risk  of  product  loss,  damage  and  personal  injury  around  storage  rack  installations  during  seismic  events.

Markets  Served: A  company  of  many  products  and  capabilities,  Ridg-­U-­Rak  provides  October 2011 > www.mbausa.org > 21

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12/1 and 12/8

Excel 2007/2010 Level I Excel 2007/2010 Level II Price: $175 Members, $310 Nonmembers

12/6 12/20

Social Media Webinar Price: $30 Members, $60 Nonmembers

12/15

e-Learning: Excel Advanced e-Learning: Excel Intermediate e-Learning: Windows 7 Basics Price: $75 Members, $150 Nonmembers

12/21 12/7 12/13

Certified Supervisory Skills Series: “Everything from the material provided to the instructors was first class.

I still find myself referring back to the material with all my notes for direction on situations. The class size was small enough to receive individual attention but large enough to have a diverse range of thoughts and ideas from the others. The instructors were enthusiastic, very professional and kept your interest at all times, you couldn’t ask for anything better.”

— Jack Tomasik, Signal-Tech

ing where you should be going – is your vision clouded by the various perspectives your executive team brings to the table? As advantageous as these differences can seem now, three or five years out, they also can present very definite challenges.

Wouldn’t it be nice if your executive team could look through the same lens?

Our new three-hour course will provide you with a quick and easy tool to help your company’s leadership construct a strong foundation from which to develop a winning game plan for the future.

Price: $150 Members, $300 Nonmembers RECIPE FOR SUCCESS: Redefining Your Buyer’s Experience to Increase the Size of Your Customer Pie 12/7 (1 to 4 p.m.)

The competition for customers is relentless and

comes from all directions. As a result, our slice of the customer pie becomes smaller – not larger. To combat this, we frequently engage in a tug of war with our competitors – battling over the shrinking pie by cutting prices and adding services – but only end up reducing margins and eroding an already declining customer base. Not exactly a recipe for success. Rather than narrowing our focus, we should expand our view to “noncustomers” – buyers who could be patrons of our industry but, for one reason or another, are not. This group represents a tremendous opportunity to experience unprecedented growth. Our new three-hour course will show you how to open up opportunities for sustainable growth by retaining your current customer base and by attracting those all-important noncustomers.

Price: $150 Members, $300 Nonmembers

S O C I A T I O N

T R A I N I N G

Training

January

Professional Development Certified Supervisory Skills Series Course III Course IV Course IV (Williamsport) Course V Course V (Meadville) Course V (St. Marys) Price: $295 Members, $415 Nonmembers HR Essentials: Effective Interviewing & Hiring Price: $70 Members, $140 Nonmembers Leadership for Team Leaders Course V (Butler) Price: $175 Members, $315 Nonmembers Food Safety Certification Price: $145 Members, $250 Nonmembers

1/12 and 1/19 1/18 and 1/25 1/4 and 1/5 1/3 and 1/10 1/11 and 1/18 1/24 and 1/25

S C H E D U L E

Regional Locations All courses are held at the MBA Conference Center in Erie, unless otherwise noted.

Erie:

MBA Conference Center 2171 West 38th Street

Butler:

Fairfield Inn Route 8 at Route 422

Corry:

Corry Higher Ed Council 221 North Center Street

DuBois:

Best Western Plus Inn & Conference Center 82 N. Park Place

1/12

Franklin:

Franklin Industrial & Commercial Development Authority 191 Howard Street

1/16

Grove City:

Hampton Inn 4 Holiday Blvd., Mercer

Kittanning:

Armstrong Educational Trust 81 Glade Drive

Meadville:

Hampton Inn Route 322

St. Marys:

Community Education Council 4 Erie Avenue, Suite 200

Warren:

Warren/Forest Higher Education Council Curwen Building, 2nd Floor 185 Hospital Drive

Williamsport:

MBA Williamsport Office 2401 Reach Road

1/19

Computer Access 2007/2010 Level III Access 2007/2010 Level I Excel 2007/2010 Level III Excel 2007/2010 Level I Price: $175 Members, $310 Nonmembers

1/17 1/31 1/12 1/24

e-Learning: Computers for Executives e-Learning: Excel Advanced e-Learning: Excel Basics e-Learning: Excel Intermediate e-Learning: Excel PivotTables e-Learning: PowerPoint Basics e-Learning: Publisher e-Learning: Word Basics e-Learning: Word Intermediate Price: $75 Members, $150 Nonmembers

1/25 1/26 1/5 1/11 1/16 1/19 1/30 1/10 1/18

Blue Ocean Strategy Module I 12/13 and 12/14 (8 a.m. - 5 p.m.) and 12/15 (8 a.m. to noon) This accelerated Blue Ocean Strategy course combines 20 hours of instruction and experiential learning with up to eight hours of company specific remote support following the session. Participants will learn the methodologies, concepts and tools of BOS and how to utilize them during the Visual Awakening, Visual Exploration and Visual Creation phases. Upon completion of the course, attendees will be prepared to implement the first three phases of Blue Ocean Strategy within their own company or organization.

Prerequisite: Participants must have read Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, viewed a one-hour overview webinar, and completed a list of questions on BOS prior to attending the workshop.

Investment: $2,495 – First Participant, $1,995 – Second Participant, $1,495 – Balance of Participants Blue Ocean Strategy Module 2 This course guides participants through the final phase of Blue Ocean Strategy implementation, Visual Execution. Six to eight hours of customized, instruction and support will be provided during mini work sessions that are conducted remotely to make them timely and economical. Upon completion, participants will be prepared to complete the BOS implementation process in order to create uncontested market space while minimizing their risk. Prerequisite: Module 1.

For upcoming class and price information, visit mbausa.blueoceanstrategy.com.

Onsite Training Get more flexibility and convenience with our onsite training options.

Join the hundreds of companies who’ve found our onsite training options to be the most cost-effective and convenient choice for group instruction. Ê UÊÊ iÝ L iÊ> `ÊV Ûi i ÌÊÃV i`Õ } Ê UÊÊ ÕÃÌ âi`Ê ÃÌÀÕVÌ Ê UÊÊ >ÌiÊÌÀ>Ûi ÊiÝ«i Ãià Whether you need a half day or full day of professional `iÛi « i ÌÊ ÀÊV «ÕÌiÀÊÌÀ> }ÊpÊ iÌÊ ÕÀÊiÝ«iÀÌÊÌÀ> iÀÃÊ come to you!

Course Registration

Ì>VÌÊ Ê >VâÞ Ã Ê>ÌÊn£{ÉnÎÎ ÎÓää]Ê 800/815-2660 or amiaczynski@mbausa.org to register or for more information on upcoming courses.Online registration also is available at www.mbausa.org.

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e-Learning Training

Are you on a need-­to-­know basis? As in, you only have time to learn the things you absolutely need to know? You’re not alone. Our increasingly busy work days don’t leave much time for learning new programs or keeping up with changing technology — until now. Our new e-­Learning courses cover all the essentials, DQG DOO IURP WKH FRPIRUW RI \RXU RZQ RI¿FH

Excel Basics

Word Basics

Excel Intermediate

Word Intermediate

Excel Advanced

Word Advanced

Excel PivotTables

PowerPoint Basics

Publisher Basics

PowerPoint Advanced

Computers for Executives

Windows 7 Basics

Registration is easy! Visit www.mbausa.org for the latest schedule of e-­Learning webinars or contact Association Computer Training Manager Amy Pontillo at 814/833-­3200, 800/815-­2660, or apontillo@mbausa.org for more information.

At National Fuel Resources, our origins as a deregulated natural gas supplier are deeply rooted in local Appalachian production sources. As a trusted, cost-efficient resource, no other energy supplier is better equipped to provide reliable supplies, competitive low prices and a plan to control your energy spending.

Our supply portfolio combines local Pennsylvania production, long haul supplies and extensive storage capacity to ensure timely and reliable deliveries even in the most critical supply situations.

Get the most for your energy dollars from a trusted local partner. Consult with National Fuel Resources today at (814) 825-1891 or www.nfrinc.com.

>Ì > Ê Õi Ê,ià ÕÀViÃ]Ê V°ÊUÊÎ{ Ê °Ê À> `Û iÜÊ Û`°ÊUÊ À i]Ê* Ê£Èxä{ÊUÊn£{ nÓx £n £ÊUÊÀÌÕ J vÀ V°V Ê

The following disclaimers are required by PA law (52 Pa. Code § 62.142): National Fuel Resources, Inc. is not the same company as National Fuel Gas Distribution Corporation (“NFGDC”). Both NFR and NFGDC are owned by National Fuel Gas Company (NYSE:NFG), a publicly traded company. NFR’s prices are not regulated by the Pennsylvania Public Utility Commission. You do not have to buy natural gas or other products from NFR to receive the same quality of service from NFGDC.

HR Connection According to a survey by the Society for Human Resource Management, help with everything from selling a “Differentiating salary increases home to relocation payments is seebased on performance has become a ing continued declines. The survey necessity with limited resources,” said found that while top executives conCatherine Hartmann, a consulting tinue to have their expenses covered, business principal at Mercer. “In mid- and lower-level employees are this less-than-robust environment, being left to foot the bill for moving top-performing employees are an expenses that had been provided for On average, top performers in 2011 employers' competitive weapon and in the past. Of those surveyed, only 26 they are doing their best to reward received average base pay increases percent of employers were providing them accordingly.” of 4.4 percent, compared with only such a benefit, down from 30 percent 2.8 for average performers and 0.4 in 2009.

RELOCATION ASSISTANCE percent for the lowest performers.

The second-most common benefit – ON THE DECLINE Additionally, the report found that temporary relocation – also dropped, Those looking for help with movwhile most companies will give with only 25 percent of respondents ing out of town for a job are average pay raises of about 3 percent going to have to look elsewhere – offering such assistance, down from in 2012, more than two-thirds of 35 percent in 2009 and 42 percent relocation assistance by employers respondents plan to use performance has hit the skids. in 2007.

PAY GAP BETWEEN TOP, BOTTOM PERFORMERS WIDENS As organizations with tight budgets zero in on “key and top employees,” the pay gap has widened significantly between higher- and lowerperforming workers, according to a recent survey by global human resources group Mercer.

statistics to determine such increases and hold on to top talent.

How much can you save with the new MBA

WORKERS’ COMPENSATION Program?

Call Doug Loesel or Joe Parlak and find out.

814-833-5433 www.LSinsure.com Loesel-Schaaf Insurance Agency, Inc. is an authorized agent for the MBA Eastern Alliance program.

24 < www.mbausa.org < October 2011

DEPARTMENTS > Contact: Stacey Bruce

Being a Great Leader is Easier Than You Think I always tell our members to run as fast as they can if someone tries to sell them a “brand new” way to be a leader. The truth is, there is no brand new anything when it comes to effective leadership. The same things that worked 100 years ago work today – and those same things will work 100 years from now, too. Of course, that won’t keep people who claim to have uncovered the latest and greatest way to lead from writing books.

Being a great leader is not complicated.

You become great by doing three things: genuinely rewarding good performance; genuinely correcting substandard performance; and genuinely listening when people talk to you. You notice the word “genuine”

modifies all three actions. Being sincere in all that you do will instantly earn respect. For instance, if I share an idea with you and you, in turn, do everything to show me that you truly listened and took my ideas seriously, there is no end to what I will do for the organization. People just want to be heard and taken seriously. They want to feel that what they do on a daily basis matters and is appreciated.

For more information about the advantages of the Association’s leadership and supervisory programs, please contact me at 814/833-3200, 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.

Ultimately, your success as a leader is tied directly to the success of the people you lead. What got you here will not get you there. You need the help of your followers to get you to the next level – and they will gladly help if they know you are genuine.

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

ESSENTIAL TOOLS Business, Tax & Succession Planning Employee Benefits Finance & Securities Intellectual Property & Technology Mergers, Acquisitions & Divestitures Labor & Employment Commercial, Contract & Complex Litigation Real Estate Acquisition Environmental Law Zoning & Land Use Workers’ Compensation Product Liability Defense Attorneys at Knox McLaughlin Gornall & Sennett, P.C. understand the unique challenges faced by manufacturers. From small proprietorships to large corporations and from dog food to sintered metals, we have worked with all types of businesses in many industries. We can provide the legal tools essential to your success. Rely on the Knox firm to find innovative solutions to your problems and add value to your business.

Erie, PA

Jamestown, NY

North East, PA

814-459-2800

www.kmgslaw.com October 2011 > www.mbausa.org > 25

MADE IN PA

MANUFACTURER SHOWCASE Pennsylvania’s manufacturers sustain the largest and most important sector of the state’s economy, generating 12.5 percent of our gross domestic product, adding upwards of $71 billion of wealth every year, and directly employing more than 561,000 Pennsylvanians. We’re proud to showcase the importance of Pennsylvania manufacturing and the products made right here in the Keystone State in this special section of the Business Magazine.

BUCKS FABRICATING 3547 Perry Highway Hadley, PA 16130 Phone: 724/253-3322 Website: www.bucksfab.com Specializing in roll-off containers for the waste, recycling and shale gas industries throughout the USA.

THE ELECTRIC MATERIALS COMPANY 50 S. Washington Street North East, PA 16428 Phone: 814/725-9621 Website: www.elecmat.com Manufactures copper products, including custom extrusions, castings, forgings, fabricated components and commutators.

CAFLISCH PALLET & WOOD SERVICES 8596 Knowlton Road Clymer, New York 14724 Phone: 716/355-4354 Website: www.caflischpallet.com Pallet Manufacturing and Recycling Programs, Licensed Heat Treat Services

ERIE PRESS SYSTEMS 1253 West 12th Street, PO Box 4061 Erie, PA 16512-4061 Phone: 814/455-3941 Website: www.eriepress.com Manufactures custom hydraulic and mechanical presses for forging, extrusion, stretch forming, compaction and metal forming.

COMPONENT INTERTECHNOLOGIES, INC. 2426 Perry Highway Hadley, PA 16130 Phone: 724/253-3161 Website: www.cit-hadley.com Miniature wire welding and forming, rolled pins and glass tube cutting

FRANKLIN BRONZE PLAQUES 191 Howard Street Ste 306 Franklin, PA 16323 Phone: 866/405-6623 or 814/346-7205 Website: www.franklinbronzeplaques.com Manufacturing custom plaques for private and commercial customers.

CORRY CONTRACT INC. 21 Maple Avenue Corry, PA 16407 Phone: 814/665-8221 Website: www.corrycontract.com Contracted sheet metal fabricator serving the metal furniture, transportation and electronics industries.

26 < www.mbausa.org < October 2011

GREAT LAKES AUTOMATION SERVICES, INC. 8835 Walmer Drive McKean, PA 16426 Phone: 814/476-7710 Website: www.glasi.us Automated assembly/test equipment, screw machine products, kitting and packaging

INDUSTRIAL SALES & MANUFACTURING 2609 West 12th Street Erie PA 16505 Phone: 814/833-9876 Website: www.ismerie.com Quality Contract Machining, Fabrication and Assembly for OEMs Since 1967

LAKE ERIE PORTABLE SCREENERS 9843 Martin Ave. Box 408 Lake City, PA 16423 Phone: 888/448-2486 or 814/774-7080 Website: www.pitbullscreeners.com LEPS manufactures the highest quality, most versatile portable screeners available.

OPTICAL FILTERS USA LLC 13447 S Mosiertown Road Meadville, PA 16335 Phone: 814/333-2222 Website: www.opticalfiltersusa.com Leading-edge rugged electronic displays designed and manufactured in Pennsylvania.

SEPCO-ERIE 1221 Robison Road West Erie, PA 16509 Phone: 814/864-0311 Website: www.sepco-erie.com Specializes in tube cutting and end working, and banjo fittings for diesel engines.

SOLAR ATMOSPHERES 1969 Clearview Road Souderton, PA 18964 Phone: 800/347-3236 Website: www.solaratm.com Commercial vacuum heat treating services in Souderton and Hermitage, Pennsylvania

TURNING SOLUTIONS 34 East Harmar Street Warren, PA 16365 Phone: 814/723-1134 Website: www.turningsolutionsinc.com Woman-owned, ISO 9001:2008 certified, precision CNC products manufacturer

THE WARREN COMPANY 2201 Loveland Avenue Erie, PA 16506 Phone: 814/838-8681 Website: www.thewarrencompany.com Metals service center and custom fabricator

SPECIAL SECTION

October 2011 > www.mbausa.org > 27

Legal Q&A MY COMPANY IS CONSIDERING TERMINATING AN EMPLOYEE WHO HAS BEEN WITH THE COMPANY FOR EIGHT YEARS. DO WE HAVE TO PROVIDE SEVERANCE PAY? Not necessarily. Pennsylvania law does not require employers to provide employees with severance pay. However, if an employer chooses to provide severance benefits, it must comply with the terms of its established policy or employment contract.

I AM IN THE PROCESS OF HIRING A NEW EMPLOYEE; CAN I CONSIDER THIS APPLICANT’S ARREST RECORD WHEN MAKING A HIRING DECISION?

No. Employers in Pennsylvania may only consider a job applicant’s felony or misdemeanor convictions if they relate to the applicant’s suitability for employment. The Pennsylvania Superior Court has interpreted this state law to mean that employers may not base employment decisions on arrests that did not lead to convictions.

SINCE I HAVE FEWER THAN 20 EMPLOYEES, COBRA DOES NOT COME INTO PLAY FOR MY EMPLOYEES, RIGHT? Correct; however, there is a different law that may apply to you. While the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) would

Your First Choice for Contract Manufacturing In order to implement a successful electronic product manufacturing strategy, you must demand excellence from your entire team. Your contract manufacturing partner is a vital member of your operations team, so when choosing a manufacturer for your next product release, you cannot afford to settle for anything less than the very best.

Western PA’s specialist for PCBA and system level electronic manufacturing services.

ISO 9001, AS9100, and ISO 13485 Certified Sunburst Electronics, Inc. 420 E. Bayfront Pkwy, Erie, PA 16507 (814) 461-9120

28 < www.mbausa.org < October 2011

not apply to you because you have fewer than 20 employees, the Pennsylvania Mini-COBRA law may. Since July 2009, Pennsylvania employers who sponsor group medical insurance and have two to 19 employees are required to offer employees and their dependents the opportunity to purchase up to nine months of continuation coverage on the employers group plan if they experience a qualifying event.

HAVE A HUMAN RESOURCE QUESTION? GET ANSWERS! CONTACT THE ASSOCIATION’S LEGAL HOTLINE AT 814/8333200 OR 800/815-2660.

DEPARTMENTS > Contact: Tammy Lamary

Philly Follows Growing Trend to â&#x20AC;&#x2DC;Ban the Boxâ&#x20AC;&#x2122; in Hiring Practices â&#x20AC;?Ban the boxâ&#x20AC;? laws regulate when and how a prospective employer can require an applicant to check the â&#x20AC;&#x153;boxâ&#x20AC;? on an application or otherwise ask the applicant about criminal convictions. Just a few months ago, the city of Philadelphia enacted its own ban the box law called the Fair Criminal Record Screening Standards Ordinance. While this new law will only affect Philadelphia employers within the Commonwealth of Pennsylvania, passing of this ordinance marks a growing trend of ban-thebox legislation, which has become increasingly common nationwide.

The Philadelphia ordinance prohibits both public and private employers in Philadelphia with 10 or more employees from obtaining criminal background information until after the

first interview. Employers are exempt from this restriction when such an inquiry is specifically authorized by other laws, for example, those pertaining to applicants for child care.

While the ordinance places new procedural restrictions on Philadelphia employers in obtaining criminal background information, the protections in the ordinance are consistent with current Pennsylvania law. Pennsylvania employers are subject to 18 Pa. Cons. Stat. § 9125, which allows employers to consider convictions in hiring decisions only if they â&#x20AC;&#x153;relate to the applicant's suitabilityâ&#x20AC;? for the position in question, and prohibits consideration of any other criminal record history information in hiring decisions.

The Erie Federal Credit Union will work for you â&#x20AC;&#x153;behind the scenesâ&#x20AC;? to help you manage your business finances.

Our personalized approach means your business will benefit

Regardless of whether an employer conducts business in a state or municipality that is subject to a banthe-box law, it is recommended that employers review their employment application and procedures to verify that they are in compliance with all applicable laws concerning applicant criminal history.

For questions about your company's hiring practices, please contact me at 814/833-3200, 800/815-2660 or tlamary@mbausa.org.

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

Business Solutions to save you time & money: 1 "(+- ('! +& ( ',

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(814) 825-2436 1 (800) 480-0494 1109 East 38th Street 1 1005 Greengarden Road 2436 Buffalo Road 1 518 State Street 1 5500 Zuck Road 1220 West 32nd Street 1 1825 Downs Drive (Located in Walmart Supercenter - Peach & I-90)

October 2011 > www.mbausa.org > 29

The Plastek Group

Company PROFILE

The  Plastek  Group  2425  W.  23rd  Street  Erie,  PA  16506 Phone:  814/878-­4400

The Plastek Group The  Plastek  Group  is  a  Global  Injection  Mold  Builder,  Molder,  and  Assembler  founded  and  headquartered  in  Erie,  Pennsylvania.  The  company  has  operated  continuously  since  1956  and  has  a  client  list  comprised  mostly  of  Fortune  50  companies.  These  companies  include  Revlon,  Avon,  Energizer,  Unilever,  Procter  &  Gamble,  Tetra  Pak  and  many  others.  Major  Industries  served  include  Personal  Care,  Cosmetics,  Home  Care,  Laundry  Care,  Food  &  Bever-­ age,  and  Pharmaceutical  Packaging.  Major  products  include  cosmetic  jars,  deodorant  stick  packages,  food  &  beverage  caps,  shampoo  and  conditioner  caps,  eye  dropper  bottles  and  caps,  safety  razor  parts,  baby  wipes  packages,  laundry  caps,  and  many  other  items.

Web  site  www.plastekgroup.com

With  state-­of-­the-­art  manufacturing  opera-­ WLRQV LQ (ULH 3HQQV\OYDQLD 0DQV¿HOG 8. and  Indaiatuba,  Brazil,  Plastek  is  a  global  supplier  to  many  of  its  customers.   To  remain  competitive  and  keep  the  com-­ SDQ\ JURZLQJ 3ODVWHN PDNHV VLJQL¿FDQW investments  in  people  and  training,  automa-­ tion,  and  other  leading-­edge  technologies.  7KLV DOORZV RXU FRPSDQ\ WR ¿JKW ERWK 8 6 and  overseas  competition,  keep  the  jobs  we  have,  and  create  more.

Throughout  our  history,  Plastek  has  under-­ stood  that  the  key  to  our  success  lies  in  our  hard-­working  and  dedicated  work  force.  Our  company  culture  and  work  ethic  is  common  in  all  divisions,  worldwide,  and  remains  extremely  focused  on  satisfying  our  custom-­ ers.  We  know  they  have  a  choice  and  we  want  them  to  make  Plastek  their  #1  choice.  Â

E-­mail:  info@plastekgroup.com

WHY CHOOSE TEAM ROSSBACHER FOR YOUR WORKERSâ&#x20AC;&#x2122; COMPENSATION? FORGING  -­  HEAT  TREATING  ¹  MACHINING  ¹  INDUCTION  HARDENING Â

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MFC  is  one  of  the  largest  closed-­die  hot  forgers  of  carbon  and  alloy  steels  in  North  America,  and  has  been  a  major  supplier  of  wheel  bearing  components  and  transmission  gears  to  the  automotive  industry  for  over  40  years.     We  are  proud  to  say  that  our  high  quality  products  are  Made  in  PA!   Log  on  to  our  website  at  www.meadforge.com  for  additional  company,  product  or  employment  information. Â

15309  Baldwin  Street  Extension  ¹  Meadville,  PA   16335  (814)332-­8200 Â

We specialize in Workersâ&#x20AC;&#x2122; Compensation 120 active workersâ&#x20AC;&#x2122; comp accounts of all sizes, in multiple states â&#x20AC;&#x201C; serving industrial/manufacturing, service, health-­ care, municipal, institutional and other commercial clients

Youâ&#x20AC;&#x2122;ll have more options By representing a variety of insurance carriers and programs, ZH DUH PRUH OLNHO\ WR Ă&#x20AC;QG WKH EHVW PDWFK IRU \RXU FRPSDQ\ Â&#x2021; RI WKH WRS 3HQQV\OYDQLD FDUULHUV Â&#x2021; 7KH 0%$ :RUNHUV¡ &RPSHQVDWLRQ 3URJUDP Â&#x2021; ,QGXVWU\ VSHFLĂ&#x20AC;F FXVWRP DQG FDSWLYH SURJUDPV

P.S. * Personal Service -­ Since 1928!

Contact  Scott  Fogle  or  Brad  Allen 877.378.4880        Team@TeamRossbacher.com

30 < www.mbausa.org < October 2011

Company PROFILE FMC  Technologies 1602  Wagner  Avenue Erie  PA   16510 Phone: 814/898-­5000 Website: www.fmctechnologies.com Founded:  1926

FMC Technologies

Employees:   12,500  employees  worldwide

FMC  Technologies  is  a  global  corpo-­ ration  and  a  leader  within  the  oil  and  gas  equipment  and  services  industry  with  27  production  facilities  in  16  countries.  We  design,  manufacture,  and  service  innovative  technologies  and  unique  solutions  that  allow  our  customers  to  succeed  in  solving  their  PRVW GLIÂżFXOW FKDOOHQJHV )0& 7HFK-­ nologiesâ&#x20AC;&#x2122;  core  values  of  Integrity,  Innovation,  Collaboration,  Respect,  Accountability,  and  Health,  Safety  and  Environment  distinguish  us  from  the  competition  and  establish  the  foundation  for  how  we  conduct  busi-­ ness  on  a  daily  basis,  guiding  our  interaction  with  our  customers,  com-­ munities,  suppliers  and  colleagues.    Our  measurement  solutions  busi-­ ness  traces  its  heritage  to  the  roots  of  oil  and  gas  production,  when,  in  1926,  Erie  Meter  Systems  introduced  WKH ZRUOGÂśV ÂżUVW HOHFWULF VHUYLFH VWD-­ tion  gasoline  dispenser.  When  the  company  was  purchased  by  A.O.  Smith,  this  measurement  expertise  formed  the  foundation  for  technol-­ ogy  innovations  such  as  the  Positive  Displacement  meter,  and  later,  the  turbine  meter.  Both  products  are  known  throughout  the  oil  and  gas  industry  as  the  global  standards  for  custody  transfer  measurement.  In  1963,  Smith  Meter  Systems  built  its  ¿UVW VNLG PRXQWHG LQWHJUDWHG PHWHU-­ ing  station;Íž  now  there  are  more  than  2,000  installations  in  over  100  coun-­ tries.  Today,  FMC  offers  a  complete  line  of  liquid  custody  transfer  meter-­ ing  products,  tank  truck  metering  SDFNDJHV Ă&#x20AC;RZ FRPSXWHUV DV ZHOO as  complete  gas  and  liquid  metering  systems.

Our  Business  FMCâ&#x20AC;&#x2122;s  measurement  solutions  busi-­ ness  is  a  market  leader  in  measure-­ ment  products  for  the  worldwide  oil  and  gas  industries.  Whether  it  is  our  Ă&#x20AC;DJVKLS 3RVLWLYH 'LVSODFHPHQW PHWHU or  our  latest  ultrasonic  technology,  we  have  pioneered  virtually  every  VLJQLÂżFDQW DGYDQFHPHQW LQ PHDVXUH-­ ment  applications  from  wellhead  to  offshore  platform.  Our  Smith  MeterÂŽ  brand  is  the  worldâ&#x20AC;&#x2122;s  most  trusted  name  in  metering,  and  our  unrelent-­ ing  commitment  to  quality  continues  to  drive  us  to  design  better  solutions  that  meet  the  requirements  of  the  worldâ&#x20AC;&#x2122;s  most  demanding  applications  and  environments.  Our  unrivaled  experience  and  the  consistent  accuracy  of  our  meters  drives  our  success.

A  wide  range  of  proprietary  technolo-­ gies,  superior  design  and  unsur-­ passed  knowledge  of  liquid  petro-­ leum  custody  transfer  and  control  set  FMCâ&#x20AC;&#x2122;s  liquid  measurement  equip-­ ment  apart  from  that  of  all  competi-­ tors.  From  the  supply  of  individual  meters  and  accessories  to  complex,  automated  fully  integrated  measure-­ ment  and  product  analysis  systems,  FMC  offers  technically  superior  liquid  measurement  products.

/DWHVW $FKLHYHPHQWV  FMCâ&#x20AC;&#x2122;s  comprehensive  Flow  Re-­ search  and  Test  Center,  located  in  Erie,  Pennsylvania,  is  ISO  17025  accredited  and  capable  of  testing  PHWHUV WR WKH KLJKHVW Ă&#x20AC;RZ UDQJHV and  viscosities  of  any  testing  facility  in  the  world.  It  is  the  industryâ&#x20AC;&#x2122;s  lead-­ ing  facility  for  verifying  the  accurate  performance  of  positive  displace-­ ment  meters,  turbine  meters,  Coriolis  meters  and  ultrasonic  meters  for  any  crude  oil  application.

October 2011 > www.mbausa.org > 31

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32 < www.mbausa.org < October 2011

OntheHill

DEPARTMENTS > Contact: Lori Joint

Moving Pennsylvania in the Right Direction First elected to the Pennsylvania State Senate in 1996, State Senator Jane Earll (49th District – Erie County) is the chairwoman of the Community, Economic and Recreational Development Committee, vice chair of the Finance Committee, and also serves on the Judiciary, Rules and Executive Nominations, Transportation and Banking, and Insurance Committees.

We are more than halfway through the first year of a new administration and legislative session, which means it’s time to update you on our activities in Harrisburg.

For the first time in almost a decade, the budget passed on time. With the state facing a daunting $4-billion deficit, this year’s budget process proved to be the toughest in my 15-year tenure. And while tough choices had to be made, I believe we passed a fiscally responsible budget that puts the reins on spending, uses our tax dollars wisely and allows Pennsylvanians to keep more of what they earn.

Getting consensus from four caucuses, working legislation through the House, Senate and ultimately the governor, and balancing competing interests is often a difficult and tedious task – but we have started off this new legislative session with some improvements that I believe will move Pennsylvania in the right direction.

1991 – is now 2.89 mills, and is scheduled to drop to 1.89 mills next year, providing job creators with $70 million in tax relief. The rate is scheduled to drop to 0.89 mills in 2013 and be completely eliminated by 2014.

At the same time, the budget maintains important tax credit programs and increases the Research and Development Tax Credits from $40 million to $55 million. It also brings state tax policy in line with the federal tax code, increasing the bonus depreciation deduction to 100 percent for corporate taxpayers with property placed into service before January 2012. More than 117,000 businesses will benefit, allowing for greater capital investment and encouraging further economic growth.

Finally, the budget slashed the number of exceptions a school district can claim to raise property taxes above the inflation rate without a voter referendum. The increased use of voter You’re Trimming Your Expenses, We’re Trimming Ours referenda will benefit all businesses and property taxpayers.

Unlike the federal government, Pennsylvania law requires The Fair Share Act – An MBA Priority that the state budget be balanced. Having pledged not to Lawsuit abuse reform has long been a priority for the raise your taxes, the legislature was forced to make some Manufacturer & Business Association. Pennsylvania’s legal tough decisions. Just as you’ve found in your own business, system had long operated under an outdated common law there were and are no easy answers. Nevertheless, the rule known as joint and several liability. Under such a system, 2011-12 budget signed by Governor Corbett includes a every defendant found partially liable in a lawsuit can be 4.1-percent reduction in general fund spending from the held responsible for the entire verdict, even if they are only 2010-11 fiscal year. deemed to be 1-percent liable.

Additionally, the total state operating budget was reduced for the first time in 40 years at $64 billion – more than $2 billion less than the previous fiscal year. This budget eliminates 66 appropriation line items, reduces funding for more than 226 appropriations and consolidates an additional 52 items. Administrative spending was reduced by 4 percent and more than 1,000 state government positions were eliminated.

With passage of the Fair Share Act, individual defendants found to be less than 60 percent liable in most civil cases are responsible for paying only their proportionate share of the judgment.

Your Requests for Tax-Policy Improvements Have Been Heard The 2011-12 spending plan included no tax increases and held the line on the Personal Income Tax and the Corporate Net Income Tax. The budget continues the phase-out of the Capital Stock and Franchise Tax (CSFT), which has been a popular target for those looking to generate more short-term revenue. The CSFT – which had been as high as 13 mills in

We realize there is more to be done. The task of governing is never ending. However, after taking stock of the initial months of this session, I am generally pleased with what we have accomplished thus far and hope to continue this momentum throughout the fall session. As always, your comments and suggestions are appreciated. Feel free to contact my local office at 814/453-2515, Harrisburg office at 717/787-8927 or by email to jearll@pasen.gov.

Enactment of this tort reform was the culmination of a decade-long effort. Viewed as a critical step toward improving Pennsylvania’s legal climate, the Fair Share Act is a very encouraging sign for the Commonwealth’s businesses.

October 2011 > www.mbausa.org > 33

34 < www.mbausa.org < October 2011

EDITORIAL > by Angie Angus

Overcoming the Cognitive Hurdle to Execute Your Strategic Plan Angie Angus is the manager of Blue Ocean Strategy Programs and Support Services for the MBA Blue Ocean Strategy Center - United States, and a certified Blue Ocean Strategy practitioner. The Center teaches companies and organizations of all sizes and types how to implement Blue Ocean Strategy in order to find new markets for their products and services.

This article is part of a series that features excerpts from the international best-selling book, Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, by authors W. Chan Kim and Renee Mauborgne.

The final phase of Blue Ocean Strategy is the Visual Execution stage.

Many companies create a strategy but don't successfully execute it due to one, or several, of four key organizational hurdles – cognitive, resource, motivational and political.

1. Cognitive - Employees must see the need for a change in strategy. Making a strategic shift will take many people outside of their comfort zone.

2. Resource - Many people assume that the greater the change in your strategy, the more resources it will take to achieve your goals.

The truth is that resources are limited, and in many cases, shrinking.

3. Motivational - Employees must be motivated to carry out a new strategy. The longer it takes to implement, the more likely the strategy will fail.

4. Political - Organizational politics occur within every company or organization. There are people who will sabotage the strategy if they think it will threaten their position or areas of responsibility.

Tipping Point Leadership Tipping point leadership allows companies to overcome these four hurdles quickly and without raising costs dramatically. It also shows employees the need for a strategic shift.

As Blue Ocean Strategy describes, “Tipping Point Leadership hinges on the insight that in any organization, fundamental changes can happen quickly when the beliefs and energies of a critical mass of people create an epidemic movement toward an idea. Key to unlocking an epidemic movement is concentration, not diffusion.

Tipping point leadership builds on the rarely exploited corporate

reality that in every organization, there are people, acts, and activities that exercise a disproportionate influence on performance. … it is about conserving resources and cutting time by focusing on identifying and then leveraging the factors of disproportionate influence in an organization.”

Overcoming the Cognitive Hurdle Typically, management tries to convince employees of the need for change by showing them data and setting new targets to achieve – but numbers can often be misleading or manipulated. It also is proven that people don't find charts and graphs memorable.

The best way to win people over to the need for change is to have them experience the problems of the company or organization firsthand. Show management and employees the worst operational problems in the company and have them talk to the most dissatisfied customers. This will make a lasting impression and allow them to experience for themselves why a change is needed.

The New York City Police Department (NYPD) provides a great example of tipping point leadership and overcoming the cognitive hurdle. Bill Bratton became commissioner of the NYPD in 1994, when crime was at a high and confidence in the police department was at a low. Morale among its 36,000 employees was poor and the department was cash-strapped.

Within two years of taking over the department, Bratton had turned New York City into the safest large city in the United States without increasing the budget – but he first had to convince the employees of the NYPD that drastic changes were needed.

Bratton had his employees experience one problem by having them ride the subway. Although statistics hadn’t shown that it was an area with the greatest need, citizens were boycotting riding the subway out of fear for their safety. Bratton had upper and middle management ride the subway day and night, where they saw roaming gangs of youths, aggressive begging, drunk people sleeping on benches and offensive graffiti. After experiencing it firsthand, NYPD management was able to understand why New Yorkers felt unsafe. By reallocating police officers from less traveled areas to subway stations with the highest traffic and most crime, Bratton was able to clean up the subway system.

Overcoming a cognitive hurdle calls for the employees and managers to experience the problems of the company or organization firsthand – showing them the need for a new strategy and attaining their support for implementation.

Next month: We will continue to discuss the organizational hurdles and how to overcome them.

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.

October 2011 > www.mbausa.org > 35

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$3.5 MILLION SAVED!

So far this year we’ve helped members save more than $3.5 million in energy costs.

On top of a challenging economy, businesses like yours have seen a substantial increase in energy costs as electric caps came off across Pennsylvania.

That’s why, as a trusted business resource for more than 105 years, the Manufacturer & Business Association (MBA) established the Employers’ Energy Alliance of Pennsylvania, Inc. (EEA-­PA) to act as the energy supplier for our members.

We purchase directly from the electrical grid, eliminating broker fees and passing a significant savings directly to your bottom line. Best of all, there’s no long-­term contract.

The application process is simple and the time to act is now.

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Call us today at 814/833-­3200 or 800/815-­2660, or visit www.eeapa.com for more information.

The Employers’ Energy Alliance of Pennsylvania is a subsidiary of the Manufacturer & Business Association.

Events During the Let’s Roll Flight 93 Memorial Ride that took place on September 10 and 11, various “honor flights” from hometowns across the Commonwealth converged in Shanksville, Pennsylvania, to honor the fallen heroes of Flight 93. The $250,000 raised from the ride and other fundraising events – including the 2011 Roar on the Shore® Bike Rally and Arlen Nessdesigned Flight 93 tribute bike auction – will benefit the construction of the Flight 93 National Memorial, which was dedicated on the 10-year anniversary of the 9/11 terrorist attacks. For complete photo coverage, visit the Photo Gallery at www.letsrollride.com or www.mbausa.org.

Manufacturer & Business Association Board Member Richard Knight and wife Betty at the Erie Flight Gathering, where, thanks to Maple Donuts, riders enjoyed refreshments before the morning ride.

Greg and Lisa Rubino and friends. Each sponsored motorcycle carried a flag bearing the name of one of the Flight 93 heroes donated by CAZZCO. The more than 300 riders also wore customized dog tags inscribed with the names of the passengers and crew, provided by Mark and Debbie Miller.

The ride’s host organizations – the Manufacturer & Business Association (MBA), the CHAMBER of Commerce, the Northeast Pennsylvania Manufacturers and Employers Association, SMC Business Councils, Street Track ‘N Trail, and the MBA’s Central Division – played an integral role in carrying out this historic memorial ride.

Riders from various flights across the Commonwealth gather at the Seven Springs Resort. On the morning of September 11, they departed as a single honor flight to attend the 10th anniversary memorial service in Shanksville.

40 < www.mbausa.org < October 2011

The Gannon University ROTC color guard stands by as the Erie flights depart for Shanksville. Similar ceremonies were held in Meadville/Conneaut Lake, Cranberry Township/Pittsburgh Pottsville, and Williamsport.

Ken and Marci Nacke. Ken’s brother Louis “Joey” Nacke II was among the 40 heroes aboard Flight 93.

Roar on the Shore Board Chairman Clarence Kearney and wife Sandra with national recording artist Darryl Worley, whose hit "Have You Forgotten" is considered the anthem for those who lost their lives on 9/11.

Association Board Chairman John B. Pellegrino Sr., P.E., president and CEO of Ridg-U-Rak, Inc., and Erie Mayor Joe Sinnott pose with Let’s Roll Ride Honorary Grand Marshal Tom Ridge, former Pennsylvania governor and first secretary of Homeland Security.

Association Board Vice Chairman Dale Deist, founder of Deist Industries, and Immediate Past Chairman Dan Ignasiak, president of SEPCO-Erie, with their wives at the pre-concert reception at Seven Springs Resort.

Family members of the Flight 93 heroes greet concert attendees and participants of the Let’s Roll Ride.

Ridge, who serves as honorary co-chair of the Flight 93 National Memorial Campaign, applauds as the $250,000 donation – proceeds from a year of fundraising by the Association and the Roar on the Shore® bike rally – is unveiled.

Darryl Worley performs at the Saturday evening Flight 93 memorial concert at Seven Springs.

Dignitaries from across the state and nation gathered to pay tribute to the Flight 93 heroes, including former Governor Ridge (far left) and Pennsylvania Governor Tom Corbett (second from right).

A 17-ton boulder marks the crash site of Flight 93.

Thousands gathered at the Flight 93 National Memorial in Shanksville to remember the heroic actions of the passengers and crew of Flight 93 on the 10th anniversary of the 9/11 attacks.

October 2011 > www.mbausa.org > 41

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People Buzz SEGEL & SON ANNOUNCES CORPORATE HIRING Segel & Son, Inc. recently hired Dana Forness as field sales manager. Forness is responsible for a variety of sales-related functions and plays a role in overall scrap iron and metal sales, community marketing, communicating with both new and existing customers as well as a variety of other duties. He has an applied science degree from SUNY Agricultural & Technical College and has more than 25 years of extensive background in manufacturing and sales-related positions.

The company also has hired Eric C. Hern as controller. He is responsible for all financial functions of the company and plays a role in most other operational areas, including strategic planning, marketing, facilities management, corporate affairs and operational analyses. Hern has more than 20 years of extensive background in running business units for a variety of manufacturing, retail and finance companies. He has a bachelor’s degree from Allegheny College and both an MPA and MBA from Gannon University.

Segel & Son, Inc. is the oldest and largest locally owned scrap metal recycling and new steel sales company in the region for both residential and corporate customers. The company has facilities in Warren, Pennsylvania and Olean, New York.

BURNSIDE EARNS 2011 ALL-STAR AWARD Beth Burnside, owner of CMIT Solutions of Erie, was recently honored with CMIT Solutions’ prestigious 2011 All-Star Award

at the company’s annual convention held in Austin, Texas. Presented to the CMIT Solutions franchisee who best demonstrates the company’s core beliefs, the All-Star Award honors Burnside for her hard work and dedication to growing her business and leveraging her resources to the fullest. As a validation of her success, Burnside’s business experienced double-digit growth since it launched in late 2007.

Additionally, Burnside was named to CRN’s Power 100 list, which recognizes the top 100 female executives in the technology trade channel.

FOUNDATION WELCOMES SEKULA, O’BRIEN The Erie Community Foundation is pleased to announce the appointment of Anne Blose Sekula to the position of vice president of Programs. She is responsible for managing the Programs Department and overseeing the Foundation’s collaborative grant-making.

Sekula joined the Foundation with more than 15 years of hands-on leadership in philanthropy and nonprofit management.

Meghan O’Brien also recently joined the Foundation as the grants accounting assistant. She is responsible for all aspects of donor-directed grants processing and for assisting the Finance Department with endowment fund accounting work. She has more than 10 years of experience in her field, previously working for EPM Corporation as well as MegaGrafix/ Printing Technologies.

ERIE ATTORNEY RECEIVES EXCELLENCE AWARD Knox McLaughlin Gornall & Sen-

EDITORIAL > Contact: Karen Torres

nett President Thomas A. Tupitza, a longtime advocate for legal aid programs locally and statewide, has been awarded a 2011 Pennsylvania Legal Aid Network (PLAN) Excellence Award for his efforts towards ensuring that all Pennsylvanians have access to quality legal representation.

Tupitza was given the Excellence Award in the Private Bar category, which recognizes members of the private bar who display an outstanding commitment to legal aid for low-income Pennsylvanians.

In addition, Guy C. Fustine, Mark G. Claypool and Francis J. Klemensic, shareholders at the Knox Firm have been selected for inclusion in Pennsylvania Super Lawyers® for 2011. Pennsylvania Super Lawyers is compiled by Law & Politics through both peer review and independent research and is intended to highlight the top 5 percent of Pennsylvania attorneys in more than 60 practice areas.

Guy C. Fustine is chairman of the Bankruptcy & Creditors’ Rights Group and has been with the firm for 25 years. His practice is focused on business reorganization, commercial litigation and sports law.

Mark G. Claypool is vice chairman of the Bankruptcy & Creditors’ Rights Group. His practice is focused on creditors’ rights, bankruptcy and commercial litigation.

Francis J. Klemensic is chairman of the Litigation Group. His practice is focused on medical malpractice defense, civil litigation and insurance litigation.

October 2011 > www.mbausa.org > 45

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