The Enterprise - Utah's Business Journal, Feb. 27, 2012

UTAH’S BUSINESS JOURNAL www.slenterprise.com

THIS WEEK Startup tech firm gets $1.7 million See page 3.

Teryiyaki restaurant chain eyes Utah See page 5.

Planners OK 32-acre Sandy project See page 8.

Earnings Roundup See page 7.

• Industry Briefs • Begin on page 8.

• Calendar •

Feb. 27-March 4, 2012

Volume 41, Number 31

Draper greenlights 28-acre apartment, retail development

By Barbara Rattle The Enterprise

Ground is expected to be broken in early summer for an approximately 28-acre mixed used project at 600 East and 12300 South in Draper, formerly the site of Day Dairy.

The project is being jointly developed by the Utah office of California-based Wasatch Advantage Group and Salt Lake City-based Gardner Co.

Adam Lankford, senior development manager at Wasatch Advantage Group, said the project will be constructed in two phases.

The first phase, dubbed Villages at Day Dairy, will consist of 288 Class A luxury apartment units in six-plex and 24-plex buildings that will be two and three stories in height. He said the majority of

the units will be six-plexes with garages. Amenities will include a 4,000 square foot clubhouse and pool; there will be a park within the development. The rental units will have one, two and three bedrooms and range in size from about 900 to 1,600 square feet. Lankford said rental rates have not yet been finalized. Wasatch will manage the apartments, which should take about a year to build.

Phase one will also include construction of the backbone infrastructure for the project’s retail component, which will be constructed as tenants are signed.

None have yet inked leases, but Lankford said the developers have been talking with several potential tenants.

“We’ve got some that we’re see DAIRY page 6

On Capitol Hill, Internet sales taxation continues to be a hot topic

See page 13.

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Smart Card Summit speakers: now is the time for the EMV chip

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

At the Smart Card Alliance Payments Summit held this month in Salt Lake City, the message was clear: migrating to the EMV (Europay-MasterCard-Visa) chip will be the foundation necessary to move to the next level of secure and convenient payments, whether in the form of contact, contactless and/or mobile.

“The answer is simple: it’s time,” said Ed McLaughlin, chief emerging payments officer for MasterCard Worldwide, on MasterCard’s recent announce-

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

Visa’s Jennifer Fischer, head of U.S. payment system risk, see CARDS page 4

Bill would cut business owners' personal property taxes

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

By Brice Wallace The Enterprise

Taxation of Internet sales continued to be prominent at the Utah Legislature, with several bills having mixed success getting out of committee.

For example, a second try to get committee approval of a bill requiring a tax-implication notice on Internet purchases ended the same way as the first: rejection.

The second failure at the hands of the House Revenue and Taxation Committee came despite an amendment that watered down the notice language.

The original version of

HB385 called for out-of-state Internet, catalog and phone sales companies to alert customers that their transactions may be subject to sales or use taxes. It would not have applied to online auction websites or sellers with total gross sales in Utah of less than $100,000.

Currently, taxes for online purchases are required to be reported on buyers’ individual tax returns.

Before the second vote, the bill was amended to retain the notice that the seller did not collect sales or use tax on the sale see INTERNET page 2

By Brice Wallace The Enterprise

A House committee passed out a bill designed to help business owners with personal property tax costs after the bill’s sponsor adjusted a provision about the tax threshold.

The House Revenue and Taxation Committee had taken no vote on HB41 at an earlier meeting but endorsed the revised version.

The original version exempted from taxes the first $25,000 of taxable tangible personal property for businesses. The latest version calls for an exemption for property that has a total fair market value per county of $15,000 or less. Current law has a figure of $3,500 or less.

Critics had said the original version placed too much of a tax shift onto Utah residents. The latest version whittles the shift from

$12 million to $2 million, meaning the owner of a $200,000 home might see personal property taxes rise $2 rather than the $8 in the original bill.

“It drastically changes that downward by 80 percent,” the bill’s sponsor, Rep. Patrick Painter, R-Nephi, said of the tax shift amount. “That was the goal.

That’s what I heard, loud and clear, from the committee, and that’s what I’ve done here.”

Painter said that about 30,000 businesses statewide would benefit from the bill, down from about 70,000 in the original version.

“The goal of my bill is, if I can make life easier and likely reduce the friction costs of having to have a business guy go through an audit, I think I’ve done something good for the little guy that creates the jobs and works his tail off 14 hours a day,” he said. “My goal is see PROPERTY page 2

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INTERNET from page 1

but would have eliminated the language saying that the sale might be subject to sales and use taxation because it was made on the Internet or other remote method.

It retained a suggestion that the buyer consult tax laws about the purchase.

Rep. Merlynn Newbold, R-South Jordan, said her amendment language was “more factual and less threatening” to Internet customers.

The bill’s sponsor, Rep. Wayne Harper, R-West Jordan, said the amendment improved the bill, but ultimately his colleagues disagreed. Harper reiterated that having a tax-implication notice would not place “an onerous burden” on Internet sellers.

In support of the bill, Rep. Steve Eliason, R-Sandy, said local companies pay a variety of taxes and that it’s “extremely frustrating” when a customer walks into a store and uses a phone app to scan a product and discover it can be purchased online at the same price or cheaper without the sales tax.

“Supporting this [bill] supports our local economy,” Eliason said.

But Jonathan Johnson, president of Utah-based Internet retailer Overstock.com, said the bill is unfair because it would not treat all retailers the same way. For example, he said, at Walmart there is no notice next to a product that warns consumers that they will pay a sales tax if they buy it.

While Overstock.com would not be affected by the bill because it has operations in Utah, Johnson said Harper’s bill and those elsewhere could lead to a “patchwork solution that will grow across 50 states.” Having 50 different notice requirements would slow transactions and “clearly hurt sales,” he said.

Instead, a federal law is needed, he stressed. The real solution will be simple plug-and-play software that Internet sellers can use – something especially helpful to start-up sellers. Without it, Overstock.com has to deal with 10,000 taxing jurisdictions in the U.S. for its more than 1 million online products. “You can see the tangle that is,” he said.

The Enterprise

Betsy Burton, owner of the King’s English Bookshop, testified in favor of the bill. She said that brick-and-mortar businesses are at a 10 percent disadvantage to Internet sellers – about 7 percent on the sales tax plus 3 percent for the cost of handling tax matters.

Burton said that without tax equity, communities ultimately will lose small businesses.

Government, she said, assumes that like “a faithful wife, that we’ll always be there.”

“I would suggest that if things don’t change – and Internet taxation is a large part of what needs to change – we won’t be here anymore because you can’t expect any small business or business of any size to operate at a 10 percent disadvantage over time,” she said. “It just doesn’t happen.

Can’t happen. We can’t exist.”

Reps.

Gage Froerer, R-Huntsville, and Joel Briscoe, D-Salt Lake, both said they were concerned about possible lawsuits because the bill might conflict with the commerce clause of the U.S. Constitution.

Rep. Jim Nielson, R-Bountiful, said any online

notices would broaden the tax base. “Unless this [bill] is coupled with a corresponding [tax] rate decrease, I cannot support it,” he said.

In a later meeting, the House Public Utilities and Technology Committee passed out two bills regarding “remote” sales. One is HB384, sponsored by Harper, designed to keep companies from dividing their operations as a way to avoid tax collection responsibilities. The other is HJR14, urging Congress to pass the Market Equity Act of 2011 and the Marketplace Fairness Act – deemed by many as the long-sought “federal solution.”

Bruce Johnson, chairman of Utah State Tax Commission, said HB384 focuses on companies that have structured affiliates in a way to avoid tax collection.

Jonathan Johnson said the bill would be challenged as unconstitutional, and Bruce Johnson agreed that it would be litigated.

Both Scott Hymas, CEO of RC Willey Home Furnishings, and Dave Davis, president of the Utah Retail Merchants Association and the Utah Food Industry

PROPERTY from page 1

to make life simpler for him — nothing more, nothing less.”

But Cache County assessor Kathleen Howell said companies still would need to file tax statements and would still be subject to audit. “So what we’ve done is, we’ve widened the [tax] gap, we’ve shrunk the base, which

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Feb. 27-March 4, 2012

Association, echoed Eliason’s anecdote from the earlier committee meeting, of people scouting for products at retail stores but using technology to turn to online sites for purchases. “We’re tired of being the showroom for online retailers,” Davis said.

Both Hymas and Davis supported HB384, although they acknowledged it needs work. “Is it a perfect bill? Probably not,” Hymas said. “Is it something that takes us in the right direction? I think so.”

As for the resolution aimed at Congress, HJR14, sponsored

by Eliason, says the two federal bills “will help level the playing field between traditional brick and mortar retailers and Internet-based retailers.”

Still, Jonathan Johnson opposed HJR14. While urging a “federal solution,” he said those two bills are “unfair and flawed.”

Rep. Ken Ivory, R-West Jordan, voted against HJR14, saying he favored a resolution that was more conceptual rather than one urging congressional passage of specific bills.

means the rate goes up,” she said.

“So our concern is, what does it resolve? If the issue is the onerous nature of filing, we need to come up with a bill that would resolve that. All we’ve done is increase the exemption.”

Salt Lake County Assessor Lee Gardner agreed. “It really doesn’t change anything except give $2 million worth of property tax exemptions that you and I and everyone else who owns property gets to pay,” he said.

Candace Daly, Utah director of the National Federation of Independent Business, reiterated that while $15,000 “is a good start,” she would prefer the tax be eliminated altogether. “We think it’s going to be an excellent thing for our small businesses,” she said of the revised bill. “We applaud the efforts of trying to do away with this unfair burden on small business particularly.”

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anyway. “I can’t imagine any city or town that’s going to want to do some kind of a mandate,” she said. “Again, the whole industry is moving away from that. Even if they did, that should be their business. We should respect local control.”

Madsen said “local control” often is invoked “when it’s convenient to advance a particular agenda.” But states get their authority from the people and then act as a check against whatever authority they delegate up to the federal government or down to local governments, he said.

“We have a responsibility, always, to be a check on abuse of local authority. We can’t just wash our hands and walk away. Again, there are no cities currently in the state that have taken this path.

This is a trend that is creeping throughout the country and it is wholly appropriate that we take action now to preempt that from happening and make sure that our employees, our citizens, are protected,” Madsen said.

Christensen surmised that should the bill fail and benefit mandates materialize, businesses would find ways to skirt them.

“Right now, the businesses that cannot afford employee benefits, if it’s mandated that they do that, they’ll just cut everybody’s hours so that everyone is a parttime employ so that they don’t have to give those benefits,” she said. “They’ll be hiring more people but for less hours to protect themselves from those extra costs, and the employees will have to get more part-time jobs and still not have any insurance coverage. I think it’s a better thing to have the climate where they can take those jobs, knowing that they won’t have those employee benefits.”

Startup tech firm gets $1.7 million in funding

Scan, a technology firm founded in Provo late last year by three Brigham Young University students, has closed on $1.7 million in seed funding from several Silicon Valley investors.

Menlo Ventures’ Shervin Pishevar led the round, with participation from Ariel Poler, AngelPool, Charles River Ventures, Digital Sky Technologies, Google Ventures, Raptor Group, Transmedia Capital, Social + Capital Partnership, Ludlow Ventures, Atom Factory, Vikas Gupta, Joe Greenstein and Rachel Sheinbein.

“We’ve built a simple, easy way for companies to quickly create a beautiful, optimized mobile presence,” said Garrett Gee, cofounder and CEO of Scan. The firm’s website, Scan.me, enables users to easily create their custom Scan Page, a user-friendly mobile website, accessible via QR code or Scan.me short URL. These Scan Pages bring together items the user wants to share with their audience in one place, including branding, social media, additional information like videos, blogs, other and other content and calls to action.

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Bill would prevent cities, counties from mandating company benefits

By Brice Wallace The Enterprise

A Senate committee has endorsed a bill that would prohibit cities and counties from requiring businesses to offer their employees certain benefits.

“This is an anti-mandate mandate,” the bill’s sponsor, Sen. Mark Madsen, R-Lehi, told the Senate Business and Labor Committee.

SB99 would not affect those entities from requiring benefits during their contract bidding processes. But otherwise, they could not require private employers to offer employees accident and health insurance, life insurance, sick leave or family medical leave.

Businesses would be free to offer benefits “they see appropriate,” he said.

“We’re living in tough economic times, and different people react to that differently,” Madsen said. He added that “when government pretends to manipulate wages or benefits, it throws certain people out of work and sometimes may cause businesses to fold.”

Madsen noted that some benefits are required by law, including federal law. “We don’t want to pile on and to create additional difficulties for employers and employees by creating more and more mandates and making business that much more difficult,” he said. Also, having inconsistent policies throughout the state could lead to some cities being “more viable” for businesses than others.

Melva Sine, president of the Utah Restaurant Association, testified in support of SB99. She said several local governments outside Utah have such benefit mandates.

Of particular concern are those requiring sick leave — averaging about nine days per year per employee — which she said many small businesses simply cannot afford.

“If I can’t afford to offer that benefit to my employees, it shouldn’t be mandated on a business that they have to do that, either,” Sine said.

Maryann Christensen of the Utah Eagle Forum also favored the bill. “This is really an important protection against more mandates,” she said. “Because our economy and the health of our jobs in the state depend largely on the small businesses in the state, it’s really important that we protect them from things that make it hard for them to do business.”

However, Judi Hillman, executive director of the Utah Health Policy Project, said the bill is “needless or poorly timed” because most health reform efforts are moving away from mandates

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Feb. 27-March 4, 2012

Lady Gaga, Warby Parker, the Boston Celtics and Universal Studios.

“Scan changes the way we interact in the world via our mobile devices, by creating a two way conversation,” Pishevar said.

“With actions like Scan to Like, Scan to Check-In and Scan to Follow, users can automatically communicate with their audience just by scanning. The site also provides analytics giving instant

feedback of the effectiveness of campaigns.”

Alongside the Scan Pages, Scan is the producer of a Utilities app that has more than 10 million downloads in the Apple AppStore since inception one year ago while maintaining a 4.5 star rating. Scan is also available in the Android Marketplace.

In addition to Provo, Scan maintains an office in San Francisco.

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CARDS from page 1

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

cardholder verification options, whether it is online and/or offline PIN, signature or no verification method. Fischer noted that Visa’s issuers have issued one million EMV chip cards in the United States to date.

In his presentation, chip card expert and consultant Dr. Toni Merschen urged attendees to learn from other countries that have migrated to EMV. Citing the trend of fraud migrating to the United States because of its weak magnetic stripe technology, he said, “EMV deployment is the most efficient way to decrease fraud,” but added it is critically important to secure card-not-present (CNP) and ATM transactions at the same time as deploying point-of-sale (POS) chip card solutions. Merschen also suggested attendees “not renounce offline transactions,” saying that offline PIN means global interoperability.

Merchants and processors had requests for payments brands in regards to U.S. EMV. NACS payments consultant Gray Taylor said “we need a roadmap that everyone understands and is very clear.”

Jamie Henry, the senior director of payments services at Wal-Mart concurred, saying “a detailed plan will help reduce confusion.”

The differing mobile wallet solutions emerging in the marketplace was also a hot topic, with presenters commenting on consumers’ increasing use of mobile

Feb. 27-March 4, 2012

phones to compare prices, browse and purchase. George Peabody, director of Mercator Advisory Group’s Emerging Technologies Advisory Service, called these consumers “weaponized shoppers.” Both MasterCard and Visa included mobile in their vision of the future of U.S. payments, while Isis and PayPal took the floor to talk commerce.

Isis director of sales Jim Stapleton announced that the company’s upcoming summer pilot in Salt Lake City will “transform the way people shop and pay.”

Stapleton called the Isis mobile payment infrastructure — a joint venture formed by AT&T, T-Mobile and Verizon — a “convening of the industry” that gives banks and merchants “tinker toys” to develop payment and loyalty programs for customers in the form of a mobile wallet that is “safer than your other wallet.”

Patrick Gauthier, head of PayPal’s product strategy and business operations, retail services, focused on commerce and the consumer experience in his presentation. Citing that in the last few decades payments have driven commerce, Gauthier said that at least in the next 15 years, “commerce will drive what payments need to do.” He suggested that mobile wallet solution providers should roll out infrastructures and programs with merchants’ and consumers’ wants and needs in

mind, as these are the parties that are going to drive usage.

Several large U.S. transit agencies talked about their plans to move to open fare collection systems. All were looking to “future proof” systems, and all had aggressive implementation schedules. John McGee, SEPTA’s (Southeastern Pennsylvania Transportation Authority) chief officer of new payment technologies, talked about their recent open payment system contract award, and their goal of a future where virtual ticketing plays a major role.

The Chicago Transit Authority (CTA), which recently awarded a $454 million contract to Cubic Transportation Systems, will skip pilots and aim for full implementation of its open payment system in the second quarter of 2014. Eric Reese, general manager of business development, said the main objective is to let consumers use the same payment mechanism across all of the CTA’s areas of service, adding, “NFC (near field communication) is a thought. When that time comes, we will be ready.”

The Metropolitan Transportation Authority (MTA) of New York is ready to commit to open payments as well. Amy Linden, the MTA’s senior director for new fare payment systems, said that their Tap & Ride project is about consumers being able to “buy fare products anytime, any-

where, and manage accounts anytime, anywhere.” With the goal to mainstream payments and leverage existing payment technologies and networks, Linden said the MTA aims to “go live” within three years of the design notice to proceed (NTP).

The Smart Card Alliance is a nonprofit, multi-industry association working to stimulate the understanding, adoption, use and widespread application of smart card technology.

Most of the world has fully migrated or is in the process of migrating to EMV chip technology for debit and credit payments.

According to EMVCo, approximately 1.2 billion EMV cards have been issued globally and 18.7 million POS devices accept EMV cards as of Q1 2011. This represents 40.1 percent of the total payment cards in circulation and 71 percent of the POS devices installed globally.

Given the prevalence of EMV chip technology in the rest of the world, many have questioned if and when the United States would move to EMV. U.S. financial institutions started issuing EMV chip cards to their frequently traveling customers; however the country seemed to be a long way off from acceptance. All of this changed on August 9, 2011, when Visa announced plans to speed up chip migration and adoption of mobile payments in the United States.

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Car dealers back bill barring manufacturer 'coercion'

By Brice Wallace The Enterprise

Car dealers in Utah are backing a bill that would prevent auto manufacturers from “coercing” or setting dealers’ prices for certain products and services.

The Senate Transportation and Public Utilities and Technology Committee passed out SB68 despite warnings from the manufacturers that they might refuse to offer any car-buying incentives in Utah should the bill become law.

Most of the provisions of SB68 had been ironed out by stakeholders. However, the ban on “coercing or requiring” a dealer to establish prices for certain products or services remained a point of contention. The ban would cover agreements, programs and incentive provisions.

Craig Bickmore, executive director of the New Car Dealers of Utah, testified that manufacturers have the right to control prices for the cars, parts and accessories that dealers obtain from their factories, but the bill would protect dealers’ ability to control prices on aftermarket products and services.

Lincoln Shurtz, representing General Motors, said he agreed that manufacturers should never coerce dealers to do anything.

But any voluntary agreement between dealers and manufacturers will always contain a list of requirements for each side. Those requirements would be banned under the current bill version, he said. He favored the elimination of the “agreement, program and incentive provision” phrase.

But the bill’s sponsor, Senate Majority Leader Scott Jenkins, R-Plain City, said the programs

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Feb. 27-March 4, 2012

and incentives are where the coercion takes place.

Shane Topham, an attorney for the New Car Dealers of Utah, said removing the coercion phrases “essentially eviscerates” that portion of the bill.

“The manufacturer will put out a program that seems voluntary but if the dealer doesn’t participate in it, then the dealer’s business is materially adversely affected,” Topham said.

One example of a coercive contract involves a preferred pricing program, he said. The manufacturer could set a price for the dealer to handle sales documents and it could be less than what the dealer wants to charge. That document handling “has nothing to do with the manufacturer,” he said.

“What we’re saying is that we don’t think that, on these few limited things, the manufacturer should have the ability to reach into the dealer’s business, whether by agreement or by a gun to the head, and cause the dealer to act in a particular way, sell things for a particular price, whatever,” Topham said.

As for incentive programs, if dealers do not like the manufacturers’ terms, they don’t have to participate, Shurtz said.

Frank Pignanelli, representing the American Alliance of Automobile Manufacturers, said the bill gets into the “minutiae” of a dealer-manufacturer relationship. The result might be that manufacturers stop offering incentive programs to dealers.

“What we’re doing is, we’re eliminating the incentive to incentivize the dealers” with the bill, he said.

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

Work to begin on upscale Kaysville housing project

Having experienced a pickup in demand for more expensive homes, Murray-based Perry Homes plans to break ground in early April for the first phase of Shadow Crossing, a 56-lot subdivision at 55 N. Angel St., Kaysville.

Company president Jeff Taylor said the first phase of the 33-acre project will consist of 22 homes, each on lots of a half acre or larger. Homes will range in size from roughly 3,800 to 4,800 square feet and will be priced from about $380,000 to the high $400,000s, including basement, he said. Buyers will be able to select from some 16 home plans, from ramblers to two-story residences.

“We’re excited to bring this on.

This actually was a development that we had gotten approved many years ago,” Taylor said. “When the market slowed down like it did, especially in the more expensive product, the larger homes, we decided to hold on it. We’ve had a quite a bit of interest in it already as we began the approval process again. Our residential market has been really good lately in all of our price ranges. We’re not out of the woods with this market, there’s still a battle, no question. But we

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

It is anticipated that infrastructure work will be

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completed by June. Selling and building will begin at that time. A model home should be completed by this fall.

Shadow Crossing will be marketed in-house by an affiliate, Perry Realty. Perry Homes has operated in Utah for more than 40 years.

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Feb. 27-March 4, 2012

Bill would extend life of Motor Fuel Marketing Act

By Brice Wallace The Enterprise

A House committee has passed out a bill that would extend the life of the Motor Fuel Marketing Act, designed to prevent big gasoline retailers from killing smaller competitors by undercutting prices.

The act is set to expire this summer, but HB325 would extend its provisions until mid-2017. It bans motor fuel retail marketers from selling fuel below cost. That allows small businesses to have “a fair and equitable shot,” the bill’s sponsor, Rep. Don Ipson, R-St. George, told the House Business and Labor Committee.

Without the act, a large company could move into a market, offer below-cost prices and drive out the small companies, ultimately leaving the large company with “a free run” at the market and higher prices for consumers, he said.

“The free-market people might tell you that the market ought to drive this, but I don’t think it’s fair to drive small employers and small businesses out of business by unethical conduct by larger businesses,” Ipson said.

Rep. Steve Eliason, R-Sandy, who worked five years as an executive of a Utah-based oil company, said a retailer would sell below cost to “run the competition out. … What happens once the competition is gone, the prices go up. When there’s less competition, it’s just a market mechanism, the prices go up.” Without the act, “you’ll immediately begin to see predatory pricing and it will just

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focusing on,” he said. “The whole project is designed to be an upscale mixed-use project so those are the tenants we’re going after. There are smaller pads and then a place for a mid-box.”

Wasatch and Gardner have the vacant land under contract, Lankford said. Architect is Babcock Design Group while the general contractor will be Wasatch Regional Builders, Wasatch’s inhouse construction group.

“It’s been a long time coming,” Lankford said of the development. “We think it’s a great time to bring on a project like this, where you have a mix of uses. It’s a good time to build apartments. Bringing in 228 new families will be a huge plus for the retail. Draper City has been really good to work with; it’s a great opportunity to pick up 28 acres on 123rd in Draper. Pieces like that don’t come along very often.”

be a matter of time before the small guys are put out of business, and then will be the time that those that can flex their muscle will do so,” he said.

Larry Hansen, president of the Utah Petroleum Marketers & Retailers Association, said predatory pricing is “a big issue” and agreed that prices will rise without the act.

John Hill, the association’s executive director, said the local market has “a few big players that are controlling the market.”

“We are not trying to protect inefficient small operators,” he said. “We’re just trying to keep a mix of small, independent, middle-sized and large marketers working together for the benefit of the consumer.”

Hill said the act is “keeping the market somewhat in balance.”

Others, however, said the act is not needed. Matthew Piccolo, policy analyst for the Sutherland Institute, said such regulation of a free market often does more harm than good. “Stiff competition can be very tough for any company to deal with, but stiff competition is exactly what drives the free market. It’s what drives innovation,” Piccolo said. “That’s one of the best things about it. I don’t think it would be wise to limit competition in this particular industry.”

Rep. Jim Dunnigan, R-Taylorsville, also favored the free market approach. “I just don’t understand why you’re holding on to this in the belief that it’s saving people [money]. … Why don’t we just let the free markets work and then if there’s a problem, maybe we address it?” he said.

Kirk Torgensen, chief deputy in the Utah Attorney General’s office, said the act is not a free market statute, which puts it in conflict with the state Constitution, which promote free markets. He also noted that his office has never had the funds to enforce the act.

He suggested the AG’s office be taken out of the bill’s language or be given the funding to enforce its provisions.

Ipson said it is impossible to know what the business landscape in Utah would have been without the act in place. He said he believes it has been a deterrent to unethical behavior. “I think in the long run, we will be better served with this than without it,” he said.

Speakers said that stores that offer rebates on gasoline when a customer buys other merchandise are unaffected by the act. An example is a grocery store offering gas rebates after grocery purchases. Also, a competing retailer would be able to match that rebated price and still comply with the act.

Feb. 27-March 4, 2012

Extra Space Storage

Extra Space Storage Inc., based in Salt Lake City, reported unadjusted funds from operations of $34.4 million, or 35 cents per share, for the fourth quarter of 2011. That compares with $23.9 million, or 26 cents per share, for the fourth quarter of 2010.

Net income in the most recent quarter totaled $16.3 million, or 17 cents per share. That compares with $8.9 million, or 10 cents per share, for the same quarter in 2010.

For the full year 2011, unadjusted FFO was $115.8 million, or $1.20 per share. That compares with $83.7 million, or 91 cents per share, in 2010. Net income was $50.4 million, or 54 cents per share. That compares with $26.3 million, or 30 cents per share, in 2010.

The company owns and operates self-storage properties in the U.S.

“With strong property performance and robust acquisition activity, we produced 32 percent annual growth in our FFO per share over 2010 and delivered an excellent return to our stockholders,” Spencer F. Kirk, chairman and CEO, said in releasing the results.

“We are intensely focused on the fundamentals that drive our business. Strong execution on the basics and continued innovation will drive our success and allow us to capitalize on an environment marked by higher occupancy, stronger pricing and limited supply.”

SkyWest

SkyWest Inc., based in St. George, reported a net loss of $18 million, or 35 cents per share, for the 2011 fourth quarter. That compares with net income of $37.2 million, or 67 cents per share, for the same quarter a year earlier.

The company said half of the difference between the quarters was attributable to a reduction in pretax earnings and non-operational activities related to foreign investments.

Operating revenues in the most recent quarter totaled $899.9 million, up from $796.3 million a year earlier.

For the full year 2011, SkyWest reported a net loss of $27.3 million, or 52 cents per share.

That compares with net income of $96.4 million, or $1.70 per share, in 2010. Operating revenues for 2011 totaled $3.65 billion, up from $2.77 billion in 2010.

SkyWest is the holding company for two passenger airline operations and an aircraft leasing company. The passenger airlines are SkyWest Airlines, also based in St. George, and ExpressJet Airlines, based in Atlanta. Combined, the company has 3,700 daily flights in the United States, Canada, Mexico and the Caribbean and a fleet of about 730 regional aircraft.

“We experienced some unanticipated expenses in the fourth

7

The Enterprise

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

Skullcandy

Skullcandy Inc., based in Park City, reported net income of $12.3 million, or 44 cents per share, for the 2011 fourth quarter. That compares with a net loss in the prioryear quarter of $9.7 million, or 69 cents per share.

Sales in the most recent quarter totaled $83.4 million, up from $64.6 million a year earlier.

For the full year 2011, the company reported net income of $18.6 million, or 79 cents per share.

That compares with a loss of $9.7 million, or 69 cents per share, for 2010.

Sales in 2011 totaled $232.5 million, up from $160.6 million in 2010.

Skullcandy produces headphones, earbuds and other audio and wireless products.

“We are pleased with our fourth quarter results and momentum heading into 2012,” Jeremy Andrus, president and CEO, said in announcing the results. “We ended the best year in Skullcandy’s history with strong net sales growth and sequential margin improvement. We made key acquisitions during the year and continue to make investments in critical areas of the business to support longterm growth, including product development, international expansion, interactive media and point of sale merchandising.”

Usana

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

75 cents per share, for the yearearlier quarter.

Net sales totaled $145.9 million, compared with $137.5 million in the prior-year quarter.

For the full year 2011, the company reported net income of $50.8 million, or a company-record $3.26 per share. That compares with $45.7 million, or $2.86 per share, for 2010. Net sales grew 12.4 percent to $581.9 million,

compared with $517.6 million in 2010.

The company said 2011 marked the ninth consecutive year of record sales.

“Usana’s 2011 record topand-bottom-line results were the result of the significant effort put forth by our management team, employees and associates around the world to drive financial performance, despite the challenges

we faced during the year,” CEO Dave Wentz said in announcing the results. “Our planned marketspecific promotions and events in the quarter contributed to our strong results and created positive momentum for the business going into 2012.”

Usana develops and manufactures direct-sales nutritional, personal care and weight-management products.

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8

The Enterprise

New Economy, New Demands, New Office

Business today is more challenging, tasks more varied. People move constantly from focused individual work to one-on-one meetings, project sessions to impromptu collaborations, a series of planned and unplanned interactions throughout the day, and 5 o’clock is no longer day’s end for most workers with colleagues spread across time zones and countries. A recent IBM study of human resource executives found that 80 percent of organizations want workers to collaborate more. Given the increasingly distributed and mobile workforce, however, they aren’t quite sure how to do it: 78 percent of executives want their organizations to be better at it.

Meanwhile, offices in every organization stand empty for hours each day simply because business has changed while offices have stagnated. Running a successful business requires teamwork and frequent collaboration, but rare is the office that can ably host even a two-person meeting. Technology and tools are often hard to access and operate. Teams are needed to tackle most business problems, yet workers search in vain for meeting rooms and dedicated project space.

Space influences behavior, so if you want people to share information, collaborate better and innovate more, you have to invest in the kinds of spaces that help them do that.

Organizations have tried to offer choices. A recent study of businesses throughout North America and Europe by Steelcase and CoreNet Global shows that 86 percent of companies offer alternative work strategies such as home offices, hotelling and mobile work. The rationale is that technology is mobile, information can be accessed anywhere, and alternative work strategies can help support work-life balance.

Yet few workers are rushing to set up shop off-site. Nearly half of the companies reported that 10 percent or less of their employees regularly work remotely. In that same study, 72 percent of workers say the office is the best place to interact with colleagues.

It’s also the place to access tools and technology.

Besides the need to choose how and where you work, people need a sense of participation in the collective enterprise, as well as a connection to the organization’s culture. The best place to meet all of these needs is the office.

Feb. 27-March 4, 2012

• Industry Briefs • ACCOUNTING • Oni Ruiz, an accoun-

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

BANKING

• Mountain America Credit Union was honored recently with two awards from the U.S. Small Business Administration’s Utah District — the 2011 Lender of the Year and the 2011 Blaine Andrus Memorial Award. The first award, SBA Lender of the Year Award (large lender category), recognizes larger financial institutions for their business lending performance. The second award, which is named for Utah native Blaine Andrus, who helped lead the Utah SBA office until his death in December 2008, recognizes the credit union’s community efforts and the diversity of its small business lending programs.

ECONOMIC INDICATORS

• The just released Small Business Barometer from Western Union Payments reveals that 60 percent of small busi-

Sandy planners OK master plan for 32-acre project

Hamilton Partners, Salt Lake City, has received approval from the Sandy City Planning Commission of a master plan for approximately 32 acres at roughly 120 E. Sego Lily Dr. Separate site plans will be submitted to the city on a phase-by-phase basis.

According to a planning commission staff report, there have been several efforts over the years to master plan the Utah Transit Authority-owned property. Last year, UTA put out another request for proposals for groups interested in developing the property into a transit-oriented development.

Hamilton Partners was selected.

The overall project area is shown in the master plan to have a phased build-out over the next seven to 10 years. Hamilton is proposing approximately 1,185

residential units, 300,000 square feet of office space and 59,000 square feet of service retail. About 25 percent of the property would be preserved as open space.

Phase I is proposed to have three mixed-use buildings totaling 250,000 square feet, consisting of 30,000 square feet of service retail space, 168 residential units and 340 structured parking stalls.

Hamilton proposes to keep 570 existing UTA park and ride surface parking stalls, which would remove roughly 622 from the site to accommodate phase one.

Eventually, the structured parking stalls that would be created in phase one would be shared with UTA patrons, allowing the other UTA surface stalls to be replaced with more mixed use development.

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

Midwest Commercial Interiors 987 S. West Temple • SLC, UT 84101 801•359•7681 •mwciutah.com

Grandeur Peak Global Advisors, Salt Lake City, said that the Grandeur Peak Funds, which were launched October 17, 2011, have already surpassed $100 million in assets under management.

“As one of the first firms to tackle small/micro cap investing on a global scale, we weren’t sure how quickly the market would appreciate our global approach,” said Grandeur Peak CEO Robert Gardiner.

“It takes a disciplined screening process and a tremendous personal travel commitment to sift through the 30,000+ companies that are in our consideration set globally,” added chief investment officer Blake Walker. “We are

finding great, relatively undiscovered companies all around the world and believe foreign micro caps are probably the single most interesting segment of the global equities landscape for the coming decade.”

The Grandeur Peak six-person research team has logged trips to Asia, Europe, South America, North America, Australia, and Africa since the firm began just last year. This winter/spring the team has trips planned to Japan, India, Indonesia, Malaysia, Taiwan, Singapore, Hong Kong, U.K., Canada, Boston, Atlanta, Chicago, Los Angeles, and South Carolina, and will likely add other trips as well.

nesses are funded by personal savings; control and creativity are cited as the best parts of owning a business. Revenue generation (46 percent) and positive cash flow (17 percent) are two issues that keep small business owners up at night. Fifty-five percent report forgetting to invoice a customer; 66 percent invoice late. Forty-two percent have past due invoices; 37 percent neglect other priorities to address collections; 16 percent don’t like the confrontation.

• The International Franchise Association, based in Washington, D.C., forecasts a 5 percent rise in economic output by franchise businesses in 2012 — from $745 billion to $782 billion. It also predicts a 1.9 percent jump in the number of franchise establishments and 2.1 percent increase in workers, which could result in an increase of 168,000 jobs nationally.

EDUCATION/TRAINING • To commemorate the found-

ing of the University of Utah on Feb. 28, 1850, the University of Utah Alumni Association will celebrate the accomplishments of four outstanding graduates and one honorary alumnus at the annual Founders Day Banquet on Feb. 22 at The Little America Hotel, 500 S. Main St., Salt Lake City, beginning with a reception at 6 p.m. and dinner at 7 p.m. This year’s recipients of the Distinguished Alumnus Award are actress Klea Blackhurst, BFA ‘85, businessman H. Roger Boyer, BS ‘65, former U vice president J. Michael Mattsson BS ‘60, and scientist Arthur L. Ruoff, Ph.D. ‘55. Gary Crocker, a Utah entrepreneur who founded Research Medical, will receive the Honorary Alumnus Award, in recognition of his support of the university. More information can be found at www.alumni.utah. edu/u-news/november11/foundersday.php.

• Allen Communication Learning Services, a Salt Lake City-based provider of custom corporate training and instructional design, has been named a 2012 Bersin & Associates Learning Leader in the Vendor Innovation in the Learning and Talent Management category. Allen is recognized for DesignJot, its iPad app designed to help instructional designers, trainers and performance consultants build better training. DesignJot includes two independent yet interrelated components — analysis and design.

Allen recently released an update for the app that improves the existing functionality and incorporates new functionality requested by users. The app is available for

9

The Enterprise

Feb. 27-March 4, 2012 download in the iTunes Store.

FINANCE • Paragon

Wealth Management, a registered investment adviser firm based in Provo, launched a video series to complement its eBook titled Seven Steps for Building Wealth.

The first video in the series was released Jan. 31. A new video will be released every Tuesday following that date on Paragon’s YouTube channel, YouTube.com/ ParagonWealth. Three videos have been released. Four more will be released in the upcoming weeks. The Seven Steps for Building Wealth eBook is available for download on Paragon Wealth Management’s website, www.paragonwealth.com, or in print version at no cost.

• The Wayne Brown Institute is now accepting submissions from entrepreneurs for The Deal Forum on March 28 in Salt Lake City. The Deal Forum provides venture-based mentoring and advice from venture professionals that help accelerate the growth of startup and early stage companies. Candidates should have a high growth potential of $30-$100 million a year in revenues after three to seven years, have sales or be quick to cash flow. The management should also have relevant experience in the industry. Through the Deal Forum process, all companies are reviewed by and given feedback from members of the angel and investment community. Selected companies are mentored on their lasting impressions, presentations and attractive deals. Along with being mentored, companies will also increase networking opportunities, receive world-class education and are given a head start in investment opportunities. The two-hour event will begin at 3:30 p.m. in the Zions Bank Founder Room located on the 18th floor at 1 S. Main St., Salt Lake City. Those interested in submitting a deal to be considered for an upcoming Deal Forum or would like to attend should visit http://www. venturecapital.org/vc-events-dealforum.

FOOD SERVICE • Nicholas & Co., a Salt

Lake City food services firm, has revamped its website and created a presence on Facebook and Youtube. The website’s new functions include a virtual tour of the facility and relevant industry information, product catalogs, access to the past four issues of the FoodTrends magazine, product search and company opportunities. Nicholas & Co. has created a presence on Facebook by

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

GOVERNMENT • West Valley City has been

presented with a certificate of

achievement for Excellence in Financial Reporting Award for the 2010-2011 fiscal year by the Utah chapter of the Government Finance Officers Association.

It is the city’s 18th consecutive award from GFOA and its 19th overall. GFOA considers the certificate of achievement the highest form of recognition in government accounting and financial reporting.

• Due to technical issues with an e-mail system last week,

any e-mail messages, appointments or e-mail attachments sent to Utah Labor Commission officers and employees between Feb 20 and Feb. 21 have been lost and more likely were not received by the Labor Commission. Those who have sent electronic communication to the commission probably have no indication that e-mail messages and attachments have not been received. The comcontinued on page 14

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10

Feb. 27-March 4, 2012

The Enterprise

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

On March 2, 1962, an unbreakable tive games with 20+ points: 126. Highest basketball record was set. rookie scoring average: 37.6 per game.

I’m a Wilt Chamberlain fan. I have Highest field goal percentage in a season: been since the late 1950s. .727. (And with many of these records, the

Chamberlain grew up in Philadelphia. player in second place is far, far behind.)

(I grew up in Philadelphia suburbs.) He INTERESTING FACT ABOUT went to Overbrook High School and then WILT: He never fouled out of a basketball decided to go the University of Kansas. game during the entire length of his career,

He dropped out of college after two yet he also led the league in blocked shots seasons, and because in those days you and rebounds. could not enter professional basketball until THE RECORD: On March 2, 1962, after your senior class had graduwhile playing against the New ated, he played one-and-half years York Knicks, in Hershey, Penn., in with the Harlem Globetrotters. front of about 4,500 people, Wilt

In the summer of 1960, while scored 100 points. It’s a record I was attending Pine Forest (a sumthat is celebrating its 50th birthmer camp), Wilt came as a Harlem day, and a record that will most Globetrotter. (He had previously likely never be broken. been a kitchen boy at the camp.)

Jeffrey The game was untelevised. I He put on a brief exhibition and Gitomer listened to it on the radio. signed autographs. I was 14. I had The reason I’m writing this the presence of mind to ask Wilt for piece is that Wilt Chamberlain did not just his autograph on a postcard. At camp we set records, he set standards. His athletic were required to write home every day.

The postcard I sent home that day read: prowess was so great that he changed the Dear Mom and Dad, I played ball with Wilt rules of the game.

Wilt was so massive and such a great the Stilt today. Here’s his autograph. Please rebounder that they widened the foul lanes save this postcard. Love, Jeff

My mother, rest her soul, saved the to prevent Wilt from complete basketball postcard for 25 years. I found it with all the domination. He was a game changer AND other postcards and letters she had saved as a rule changer.

I was going through her personal artifacts What are you able to change about after she passed away. That was a moment your career or process? all by itself.

What level are you playing at? Top,

I don’t know the value of a 1960 Wilt middle, or below average?

Chamberlain authentic autograph, but I do What records are you setting that will know that if someone offered me $100,000, last 50 years?

I would pass. Some things have no price in What contributions have you made? spite of the clichés you may have heard.

Wilt Chamberlain was colorful and

Back to Wilt. controversial. You either loved him or

You can argue the fact that Wilt was hated him. I loved him. the best basketball player of all time. Many Most people don’t realize that Wilt will agree. Many will disagree. I don’t wasn’t just a basketball player, he was a really care about the people who disagree. world-class athlete. He set a state high

Wilt Chamberlain’s records are still on school record in high jump, and after he the books. He was the only NBA player to retired from professional basketball, he score 4,000 points in a season. He set NBA won the two-man volleyball championship single-game records for most points (100), more than once. most consecutive field goals (18), and most Please don’t confuse this article as just rebounds (55). His most mind-boggling stat a tribute to the late, great Wilt Chamberlain. was the 50.4 points per game he averaged Rather, it’s a commentary on setting standuring the 1961-62 season. He also aver- dards, breaking records and the ability aged 48.5 minutes of play per game that to have so much skill that the rules are same year (that’s every minute, of every changed to level the playing field. That’s game, plus overtime). what Wilt Chamberlain was to basketball.

Wilt entered the NBA as a Philadelphia What standards have you set?

Warrior (based on the territorial draft sys- If you’d like to see some amazing tem that was in place at that time), briefly images of Wilt, including a copy of the went to San Francisco when the Warriors postcard I sent to my parents back in 1960, went there, then rejoined Philadelphia as a go to www.gitomer.com and enter the word 76er, and ended his career in Los Angeles WILT in the GitBit box. as a Laker.

When Wilt retired: Jeffrey Gitomer is the author of The Sales

• He was the all-time leader in Bible, Customer Satisfaction is Worthless career points with 31,419. (Later passed Customer Loyalty is Priceless, The Little

by Kareem Abdul-Jabbar, Karl Malone and Red Book of Selling, The Little Red Book of Sales Answers, The Little Black Book of Michael Jordan.)

• He held the record for most Connections, The Little Gold Book of YES! Attitude, The Little Green Book of Getting rebounds with 23,924. (Will never be Your Way, The Little Platinum Book of passed.)

Cha-Ching, The Little Teal Book of Trust,

• He led the NBA in scoring for The Little Book of Leadership, and Social seven years in a row. Most games with BOOM! His website, www.gitomer.com, will 50+ points: 118. Most consecutive games lead you to more information about training with 40+ points: 14. Most consecutive and seminars, or email him personally at games with 30+ points: 65. Most consecu- salesman@gitomer.com. © 2012 All Rights Reserved

Federal fee disclosure rules for 401(k)s

The Department of Labor is imple- The new rules — 408(b)(2) and menting new regulations for 401(k)s this 404(a)(5) — come out of concern that plan year to address some longstanding issues. vendors may obscure avenues of indirect The intention is to make indirect plan costs compensation as they communicate with visible and leave plan participants better plan sponsors.

How can you step up and meet these informed.

Beginning April 1, the DOL is requir- new responsibilities? Employers will now ing 401(k) plan sponsors to disclose fees have to look at their 401(k)s from a holisand expenses related to the operation of the tic perspective. It could be illuminating, it 401(k) to all plan participants. Specifically, could be dismaying, as some businesses the expense ratios of the funds within the may learn that a plan vendor with whom plan must be disclosed, along with the they have had a long relationship has been amount per $1,000 that it would cost partic- less than forthcoming about certain fees ipants to be invested in a particular fund. and other factors.

A 2011 AARP survey found that 62 It is the right time to ask for help? percent of 401(k) participants didn’t An experienced, independent know how much they were paying retirement plan consultant can in fees, demonstrating that this move help you with an annual audit may be long overdue. of the 401(k) fees and expenses,

As a plan sponsor, the new and contribute insights to help regulations will impact you in three you meet these challenges and ways: obligations with knowledge and

• You now have to assume confidence. greater degrees of vigilance and diligence.

Mark Lund is a portfolio manage • You will have a new obligament specialist, investor coach, tion to gauge the acceptability of the Mark Lund speaker and author of The Effective plan vendor’s fees and costs.

Investor. To get a free report

• It will be wise to take a “total titled “8 Myths Killing Portfolio Performance” systems” view of your 401(k) and test it go to www.StonecreekWealthAdvisors.com. periodically to check that the “end users” Lund offers investment management serare being well-served by the plan vendor’s vices through Stonecreek Wealth Advisors Inc. an independent fee-only Registered offering.

As a plan fiduciary, you will have Investment Advisor Firm in Utah. He can three ongoing duties. These duties are be reached at 11650 So. State Street, required by the new DOL 408(b)(2) regula- Suite 360, Draper Utah 84020 or (801) 545-0696. tion. Periodically, you must: All information is believed to be from reliable

• Check to see that the plan vendor sources; however we make no representation as has sent you suitable fee and expense disto its completeness or accuracy. Please note: closures. (This should be routine.) investing involves risk, and past performance

• Review these disclosures to make is no guarantee of future results. The publisher is not engaged in rendering legal, accounting sure they conform to federal law. (Are you or other professional services. If assistance receiving sufficient information on fees and is needed, the reader is advised to engage plan costs?) the services of a competent professional. This

• Audit the plan with the input of an information should not be construed as investindependent consultant to see if the fees are ment, tax or legal advice and may not be relied fair. (Is the existing service arrangement on for the purpose of avoiding any federal tax reasonable or are plan participants getting penalty. This is not a solicitation or a recomgouged?) mendation to purchase or sell any investment

In previous years, plan sponsors rou- or insurance product or service, and should not tinely delegated these tasks. No more. If be relied upon as such. All indices are unmanaged and are not illustrative of any particular you fail to do this, it could constitute a investment. breach of fiduciary responsibility.

THE

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Feb. 27-March 4, 2012

The Enterprise

Renaissance manufacturing, part two

Last week’s column talked about labor is but one. “For lots of companies the rebound in U.S. manufacturing that over the past two decades, the disparity is both under way and likely to continue. was such that labor costs often drove the The American manufacturing sector is decision,” notes economist Daniel Rosen, expected to add jobs in 2012 for the third the China director and principal of the consecutive year, after years of painful Rhodium Group, a New York city-based job eliminations. The column also focused consulting firm. “Now, increasingly, that’s on some of the “common wisdoms” about no longer the case.” manufacturing, U.S.-made auto quality In the Neighborhood and other issues that further inspection As one might expect, China has shows to be misguided. many competitors when it comes to the

Another common wisdom: The low wage game. Such nations as Vietnam, United Stares and other major manufac- India, Laos and Cambodia are attracting turing nations simply cannot compete some of the cheapest labor manufacturing with the extremely low costs of “doing operations.

At the same time, China business” in China when it comes will remain a dominant player. to manufacturing.

Times they are a changin.’

The enormous size of its popula The Boston Consulting tion, its rising consumer affluGroup (BCG) in a recent study of ence and spending power and its global manufacturing noted that stature as an enormous market Chinese wage rates are rising at of opportunity for companies to about 17 percent per year, while sell products from A to Z won’t the Chinese currency, the yuan, change. continues to rise in value, signifi- Jeff Thredgold A Vast Chinese Market cantly reducing that nation’s prior It is one thing to (1) manucompetitive advantage At the facture goods in China with the same time, a powerful shift is under way intent of then shipping those goods to the within the U.S. U.S. or Europe, and (2) produce with the

The BCG study noted that in 2000, intent of selling such goods in a rapidly China’s average wage rate, adjusted for expanding Chinese consumer market. The productivity, was 36 percent of that in the second option will drive much of the U.S. By the end of 2010, that gap had global investment into Chinese manufacshrunk to 48 percent, with a BCG estimate turing in coming years. Rapidly expandthat it will be 69 percent in 2015. To note ing Chinese wages, including a sharp Hal Serkin of BCG, “the spread is getting increase in the minimum wage in recent down to a smaller and smaller number. years, bodes well for rising demand for Increasingly what you’re seeing [in cor- Chinese-produced goods across China. porate boardrooms] is a discussion not Such rising affluence also boosts oppornecessarily about closing production in tunities for U.S. and other manufacturers China but about ‘where will I locate my and service providers (such as Coke and KFC) to establish or expand operations next plant?’” in China.

Simply More Competitive

More flexible U.S. work rules, lower The same Time magazine article labor and land costs, higher global fuel noted that in a survey eight years ago, 75 and transportation costs and financial percent of the members of the American incentives from many local communi- Chamber of Commerce in South China ties and states have made the U.S. much were focused mainly on exports. Today, more competitive as a low-cost base for 75 percent of such members are primarily supplying the American market (The focused on serving the rapidly expanding Agurban). Consulting firm AlixPartners Chinese market. reported that in 2005, Chinese-produced Mexico parts arrived at U.S. destinations an aver- I will talk in coming weeks about the age of 22 percent cheaper than compa- rising role likely to be played by Mexico rable products domestically. By the end of as an alternative to Chinese and Asian 2008, the average price gap had dropped production of goods destined for the U.S. to 5.5 percent (Jones Lang LaSalle). That Given the rise in transportation costs, can differential has no doubt been eliminated you say $100+ oil? Mexico is likely to since then. It brings into question the need gain more U.S. manufacturing, as will to justify the risk and complexity of pro- many communities across the U.S.

The fact that goods produced in ducing halfway around the world.

In addition, the issue of Chinese Mexico can reach most of the U.S. within piracy of technology, theft of intellectual a day or two versus at least 21 days by property and massive turnover of key per- container ship from China is a significant sonnel makes life difficult half a world advantage (The Agurban). At the same away. Chinese authorities talk of the need time, the voracious violence between to protect global patents and limit illegal Mexican drug cartels, the police and the and counterfeit products. Good luck with military, combined with limited skills that one. availability and poor infrastructure, will

A story in Time magazine notes that limit Mexican manufacturing gains. the average manufacturing wage in China is still only about $3.10 hourly, compared to $22.30 in the U.S. In the eastern part Jeff Thredgold is the only economist in of China it is up to 50 percent more than the world to have ever earned the CSP (Certified Speaking Professional) interthat. For the vast majority of companies, national designation, the highest earned whether small, medium-size or huge mul- designation in professional speaking. He tinationals, the decision about where to is the author of econAmerica, released by produce a product is always driven by major publisher Wiley & Sons, and serves multiple factors, of which the cost of as economic consultant to Zions Bank.

11

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

I’m on an airplane returning from an I believe that every group is a reflection engagement in Orlando, where I addressed of its leadership. From a group as small as a the members of the Independent Jewelers couple or families to our national society at Organization. And while they are all inde- large. pendent, they have two things in common.

And I believe this all happens quite They’re all jewelers, and they all act alike. naturally and automatically, regardless of

And in this case, that’s good. whether the members of the group even

As a marketing speaker, I address groups think they’re a member of the group or are all over North America, and I have noticed a consciously aware that they are. very interesting phenomenon. All groups act For example, do we think of ourselves alike. Every group takes on a personality of as part of a collective? Well, on some level. its own. And I have to say, seldom is We claim to be “Americans,” for this fact remarkable. example. But do we realize that we “Americans all act alike?” Don’t

But the IJO crowd is different.

The IJO members are a serious group believe me? Ask the French. And of professionals who are dedicated we all know all the French act alike. to growing their individual businesses. They are individually open to, You see, we’re trained by our leadership to believe, think, talk and and actively seeking, better answers and better solutions to better their act certain ways. enterprises. And they are collectively Jim Ackerman For example, perhaps Bill Clinton’s biggest (notice I did not say greatfinding those answers.

IJO only accepts one member in any est) legacy to the country — and I have to given geographic area. This encourages the say Congress and his party were complicit in members to be willing to share their suc- this — is that he made it OK for all of us to cesses, because they don’t fear competitive cheat on our spouses and lie about it.

I’m dead serious about this. Bill Clinton “poaching.”

How did I get the gig? One of my very got caught with his pants down — literally best and most successful clients, Ashley — and we as a society, through our press, Miller, the owner of Green’s Jewelers in Congress and political process, decided to Roxoboro, N.C., referred me to the group look the other way and say “no big deal.”

Since then we have had all kinds of with a strong recommendation because Ashley grew her business, well over 30 per- scandals, some with consequences, some cent in the first year she worked with me and without, but generally it appears we’ve all increased by double-digits again the second said “no big deal.” year. (Her Valentines sales were up 25 per- But what is the marketing lesson for all cent alone this year.) So Ashley wanted to of this? share me with her colleagues. You don’t see You have a group that is affiliated with that in other groups all that much. you. They’re your customers. And for the

What is even more impressive about most part, they all act alike. You’re the leader IJO members is their propensity to take of this group. They act, toward you, the way immediate action. you’ve taught them to act.

I’m a good speaker and my addresses Are they always asking for discounts? are generally well received by all kinds of You taught them that. They don’t do that with audiences. But while every group has its go- other merchants, because when they’re doing getters who embrace and act, what impresses business with another, they’re part of that me about the IJO crowd is the sheer volume group, and the other merchants have taught of go-getters. them not to ask for discounts.

Within minutes of the conclusion of my Do they buy from you frequently enough first session, all the promotional materials I or not? Whichever it is, you’ve programmed had brought for all my sessions were almost them to act that way.

Do they trust you? Do they always have instantly snatched up. I was deluged by people asking for appointments, more infor- to “think about it?” Is each transaction large mation and how to directly and immediately enough and do they say yes when you ask them to add something on, in their own best benefit from what I had to offer.

Don’t misunderstand. Of course this is interest? Whatever your answers to these flattering to a speaker, but I’m not blowing questions, you’ve taught them to act that my horn here, I’m blowing theirs. way.

Most groups are far more timid. Most Now, if you like the answers to all those groups actually fear following through. I’m questions, this principle is a powerful advannot sure whether it’s fear of being “sold” tage for you. If you don’t like the answers, something, or fear of not being able to suc- you’ve got a problem. Because once a group ceed. But it is fear, and it’s often almost pal- develops a personality, it’s tough to change pable. It’s ironic that they join these various it. Like steering an aircraft carrier, group groups, ostensibly to improve their business behavior doesn’t turn on a dime. It takes a acumen, but balk at going all the way to actu- long time.

But the good news is the ship can be ally doing it, especially in the most vital area of their business for their long-term success steered.

— marketing.

You start by reprogramming yourself:

Why this phenomenon of homogeny in the way you talk to your group, the frequengroups? Is it simply that birds of a feather cy with which you interact with them, the flock together? Well, perhaps to a degree. stories you tell them, the examples you hold see ACKERMAN next page

But I believe that it’s more than that.

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up, the messages of expectation you send. In short, the relationship you develop with them.

It will take time, but through a dedicated, consistent effort, you can have the IJO of clientele. A group that will enthusiastically embrace and endorse you; a group that will trust you and buy from you; a group that will love you and each other. And you, and each member of your group, will prosper together.

Jim Ackerman is a Salt Lake City-based marketing speaker, marketing coach, author and ad writer. For his speaking services, go to www.marketingspeakerjimackerman.com Subscribe to his VLOGS at www.YouTube.com/ MarketingSpeakerJimA, where you get a video marketing tip of the day, and at www.YouTube. com/GoodBadnUglyAds, where Ackerman does a weekly ad critique and lets you do the same. ©2012, Jim Ackerman, All Rights Reserved

THE

UTAH’S BUSINESS JOURNAL

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

There is more than one prospect’s position relating to satisfactory solution to a pros- price and quality. Very often the pect’s needs. Many products are prospect becomes so focused on equally good and several com- price that they sacrifice value. petitor companies can have stel- Lowest price in most cases is lar reputations. Guarantees and not lowest cost. Price is what the warrantees can be similar and prospect pays for the product and service is frequently overstated. cost is their total investment using that product. A salesperEvery salesperson offers son can offer the lowthe lowest price, the best est cost to the customer quality, excellent service and yet have the highest and the perfect solution. initial price. Make sure With everyone looking you understand what they the same, the only differneed and they understand ence in the sales equation what you are offering. is you. Let me take a few • There is service and minutes and talk about then there is real service. five principles that will set you apart from your Tim Huffaker Real service involves you, the salesperson. It competition.

• Listen to your requires your involveprospect. Most salespeople tell, ment with the customer to insure thinking that telling is selling. If they are happy and satisfied with you will take the time to listen to their decision to purchase from what the prospect is telling you, you. No one else is responsiyou will know what is important ble for your customer, only you. to them. Once you know what is The buck stops here. Others may important to them, you can tailor be involved, but the happiness of your customer rests on your your presentation to their needs.

• Understand their situation. shoulders. When they know that Know precisely what they need to you care, they will be around for a solve their problem. Ask insight- long time.

The difference between you ful and probing questions. Don’t just respond to the first need they and every other salesperson is not present to you. Discover the whole price, quality or service, it is you. picture so you know how the solu- The difference is found in your tion to this specific need fits with ability to solve their problems and your sincere concern for their situthe big picture.

• Treat your prospect’s com- ation. The customer knows if you pany as if it were your own. What care about them, and caring makes would you do? What would be all the difference in the world. the best solution to their problem When all things are equal, it is the from your perspective? Help them salesperson that makes the difference. Apply these five principles assess the relationship between and enjoy the difference. price, quality and service.

• Evaluate all possible solutions and make sure you pres- Tim Huffaker is the president of ent the most viable solution. If The Business Performance Group, your product is not the best solu- a sales training and coaching firm tion, make a recommendation and headquartered in Salt Lake City. move on. They will respect you The company teaches core sales principles and skills, allowing clifor your honesty and probably ents to double their sales. Huffaker give you an opportunity to solve is the author of hundreds of sales future needs. articles and can be contacted at

• Through effective ques- (801) 557-4571 or tim@bpgutah. tioning, seek to understand the com.

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The Enterprise

Feb. 27-March 4, 2012

• Calendar •

Next? Unconventional Wisdom on the Future of the World Economy,” presented by Westminster College and the Utah Council for Citizen Diplomacy.

The lecture will be presented by Lyric Hughes Hale, an accomplished China analyst and speaker. She is the editor in chief of EconVue Inc. Location is the Vieve Gore Concert Hall in the Emma Eccles Jones Conservatory at Westminster College, 1840 S. 1300 E., Salt Lake City. Free.

• March 9, 7:15 a.m.-4:30 p.m.: 2012 Association for Corporate Growth Utah Intermountain Growth Conference and ACG Capital Connection. Breakfast keynote speaker will be George Feiger of Contango Capital Advisors. Lunch keynote speaker will be Urban Meyer, former Florida Gators and Utah Utes coach and two-time BCS National Championship winner (subject to Ohio State schedule). The event will provide opportunity for business owners, executives, development officers, intermediaries and service providers in Utah to network, learn about how to maximize growth opportunities and to meet with the principals of more than 30 Utah-focused private equity groups and mezzanine lenders representing billions of dollars of growth and buyout capital, including Serent Capital, Sorenson Capital, Valor Equity Partners and Weston Presidio. There will be a number of workshops. Location is the Grand America Hotel, 500 S. Main St., Salt Lake City. Cost ranges from $200 to $250 based on early-bird registration and the registrant’s affiliation with certain other industry groups.

Register at http://www.acg.org/ utah/2012conferenceagenda.aspx.

• March 13, 8-9 a.m.: “The from the same company. Sign-in State of the Economy,” spon- begins at 7:20 a.m. A continental sored by Bank of Utah and the breakfast and lunch will be proEconomic Development Corp. of vided, along with a certificate of Utah. Guest speaker will be Lt. participation. Register at www.

Gov. Greg Bell. Bank of Utah huntelectric.com/training.htm or president Douglas L. DeFries will by calling Cheri Holbrook at (801) host the event and provide his per- 975-8844 ext. 8851.

TO197543 • April 8, 6 p.m.: Salt Lake spective Location Job No.: on the economy.

Chamber 125th Anniversary is the Marriott City Center, 220 S. Engagement City: SALT LAKE CITY, UT Main St., Salt Lake City. Free for Gala. Location is the Grand Media: Bank of Utah customers. Those America Hotel, 555 S. Main St., who areDate(s): not Bank of Utah cus- Salt Lake City. Cost is $100 per Insertion tomers pay $20. A breakfast buf- person. A reception will begin at 6 fet will begin at 7:30 a.m. Self- p.m. followed by dinner and a proparking will be free. Register at gram at 7 p.m. For more informahttps://www.bankofutah.com/eco- tion, visit www.slchamber.com. nomic_breakfast.html.

• March 21, 11:30 a.m.1 p.m.: Society of Marketing Professional Services Utah Chapter Networking Event.

Those in the architectural, engineering and construction industries are encouraged to attend.

Speakers will include Todd Provost from the Utah Transit Authority and Terry Johnson from the Utah Department of Transportation.

Location is the Little America Hotel, 500 S. Main St., Salt Lake City. For cost information and to register, visit www.smpsutah.org.

• March 21, 8 a.m.-4:30 p.m: ARC FLASH Compliance Training, hosted by Hunt Electric.

Participants will learn how to reduce the chances of violating OSHA rules when it comes to electrical safety. Instructor will be Joseph Gierlach Jr., vice president of technical training and support at TEGG Corp. He will be available to answer questions. Location is the Hunt Electric Training Center, 1863 W. Alexander St. (2410 S.), West Valley City. Cost is $140 if registered by March 14, $160 thereafter. The cost is $120 per person for groups of five or more

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• Feb. 28, 1 a.m.-noon: “Leading Organizational Transformation - Evolve to a Higher Level of Sustained Performance,” sponsored by The Employers Council. John Lee, president of Alpha Quality Consulting, will provide an understanding of the art and science of leading change. Topics to be covered include why transformation is necessary; basic model of organization transformation; fundamental elements of organizational transformation: personal transformation, cultural transformation and tools transformation; what a functional organizational culture looks like; who is responsible for cultural change; and how to become influential enough to change organizational culture. Location is the Radisson Hotel, 215 S. West Temple, Salt Lake City. Cost is $129 for council members, $209 for nonmembers, and includes a full breakfast buffet beginning at 7:30 a.m. in addition to materials and parking.

Enrollment is limited. Download the registration form at http://ecutah.org/2012springleadership.pdf.

• Feb. 28, 5:30 p.m.: Salt Lake City Entrepreneur Circle Meetup. Speakers will be Park City residents Susan and David Odell, who transitioned from careers at KPMG and Barclay Capital into being owners of an online food business. Location is the University of Utah’s Technology Commercialization Office, Fort Douglas Officers’ Club, 150 S. Fort Douglas Blvd., Salt Lake City. Networking will begin at 5:30 followed by the Odells at 6:30. Free, but attendees must register at http://www.bit.ly/ FebMeetup.

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Feb. 27-March 4, 2012

The Enterprise

from page 9 mission is strongly encouraging everyone to re-send information or messages sent to it between Feb. 20-21.

HEALTH CARE

• Utah business and community leader Douglas C. Black has been appointed chairman of the board of SelectHealth, Salt Lake City, effective April 14. The SelectHealth board is comprised of 15 individuals who volunteer their time without pay to direct the nonprofit organization. Black is vice chairman of Intermountain Healthcare’s board of trustees.

SelectHealth is a nonprofit health insurance organization serving members in Utah and Idaho. It is a subsidiary of Intermountain Healthcare, Salt Lake City.

Everything for the Contractors We rent the best 4343 Century Drive Salt Lake City, UT 84123 801- 262-5761 www.centuryeq.com

HOSPITALITY • R&O Construction,

Ogden, has completed a new Springhill Suites by Marriott at 12105 S. Factory Outlet Dr. in Draper. It opened on Feb. 24.

R&O’s scope of work included construction of the hotel, site improvements, underground utilities, exterior lighting and landscaping. The four-story hotel has 124 suite-size rooms in a 72,581 square foot building on a 2.5-acre site. Amenities include a complimentary hot breakfast, pool, hot tub and meeting space for large or small groups. Woodbury Corp., Salt Lake City, will own and operate the hotel. Rates begin at $139 per night.

• The 125 year-old Homestead Resort, Midway, is in the midst of a four-month closure while significant upgrades are made to the lodging and recreation properties. Multiple guest room enhancements include replacing mattresses, which has given the Legacy Resorts-owned and Gemstone Hotels & Resortsmanaged property the opportunity to give back to the community.

The Homestead selected various local nonprofit organizations to

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

MANUFACTURING • Profire Energy Inc.,

Lindon, has experienced the second highest growth rate percentage, as calculated by the International Business Times, among companies listed in the Energy Equipment and Services Industry in the first annual International Business Times IBT 1000 World’s Fastest Growing Companies list.

Profire Energy ranked No. 380 overall among all companies listed. Profire is a manufacturer and installer of oilfield combustion management systems and related burner products.

• Vandor LLC, a Salt Lake City designer, marketer and distributor of licensed consumer goods, reported a record 36 percent increase in revenues in 2011 over the previous year. Vandor features a roster of A-list licensed properties including Star Wars, The Beatles, John Wayne, Dr. Seuss, Elvis Presley, Hello Kitty and Marvel Comics. Images of these cultural icons adorn products such as drinkware, stationery, totes and home décor.

MEDIA/MARKETING • Scandinavian apparel

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

ports industry and media relationships.

• The Utah Office of Tourism has lowered the price on its 2012 official scenic calendar. Copies are now available for $7 each at www.visitutah.com or at the Zion Natural History Association bookstore at Council Hall, 300 N. State St., Salt Lake City, Utah 84114.

More information is available at (801) 538-1900 or (800) 2001160. In its 40th year, the calendar program is aimed at promoting Utah’s scenic attractions, outdoor activities and events through photography and graphic design. This year’s calendar features a cover photo of Delicate Arch taken by Utah photographer Scott T. Smith.

Other photos highlight Utah’s national and state parks, national monuments, ski resorts, national forests and other attractions. This year’s calendar was designed by graphic artist Scott Hardy, who has worked on the state’s scenic calendars for the past 26 years. Twenty thousand copies were printed by Rastar in West Valley City. The Utah scenic calendar is recognized annually for design and photography. The 2011 edition was honored with 13 awards in the National and World Calendar Awards competition, including a Gold Award for Best Graphic Design.

REAL ESTATE • NAI WEST president Mike

Falk, director of corporate services David Bauman, and vice president Jason Smith received Elite Global Top Producer awards at NAI Global’s annual conference held recently in Las Vegas. The award recognizes the top 1 percent of 5,000 candidates in 350 global offices. Falk and his team, who are consistently recognized as top producers, were awarded Platinum Elite Producer for generating more than $25 million in assignments to other global offices in 2011.

Bauman and Smith, as members of the Global Corporate Solutions team that operates from the NAI WEST offices in Salt Lake City, were both honored for their 2011 production. The Salt Lake City team is consistently recognized as one of the top producing groups in the NAI Global network. Bauman was named a Gold Elite member and Smith an Elite member for their team’s work making more than $18 million in global assignments.

• Park City resident and Main Street commercial property developer Kenneth Abdalla has entered into a contract to acquire the Sky Lodge Resort Hotel in Park City.

The acquisition is the culmination of nearly a year of effort by Abdalla and his team to acquire the Sky Lodge and several other

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

RESTAURANTS

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

RETAIL • Minneapolis-based Target

plans to open a new store in West Valley City in July 2012. The store will be one of the 20 stores the company plans to open in 2012, including the first five CityTarget locations. The new store, located near 5600 West Street and Lake Park Boulevard, will offer shoppers what they have come to expect from Target, in addition to a selection of fresh produce, fresh packaged meat and pre-packaged baked goods. The store will be approximately 135,000 square feet and employ approximately 200 team members.

• Harmons Grocery Stores is sponsoring its 18th Annual Frozen Food Month in March to benefit Special Olympics Utah. The family-owned and operated grocer hopes to raise $200,000 to support the charity’s educational programs and athletic events for Utahns with intellectual disabilities. Beginning Feb. 27 and throughout March, Harmons is encouraging the community to buy frozen food at its 16 stores and Harmons will donate a percentage of its frozen food net sales to the charity. Customers can also donate $1, $3 or $5 at cash registers, and purchase root beer floats on the weekends to benefit individual teams.

SECURITY/DEFENSE • The Center for Security

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

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

SERVICES

• The Salt Lake City office of Protiviti Inc., a global consulting firm, has promoted Daniel Hansen, Tyler Jacobsen, Ben West and Scott Grygla. Hansen is now associate director in the Internal Audit and Financial Controls solution. He was previously a senior manager. Jacobsen has been promoted to senior manager in the Internal Audit and Financial Controls solution. West has been promoted to senior manager in the IT Consulting solution. They were previously managers. Grygla has been promoted to manager in the Internal Audit and Financial Controls solution. He was previously a senior consultant.

Proviviti helps companies solve problems in finance, technology, operations, governance, risk and internal audit.

TRANSPORTATION • Two Men and a Truck

of Greater Salt Lake assisted nonprofit organizations and families in need by providing 134 hours in donated moves in 2011. The in-kind donation equates to more than $7,000 worth of moving services. In addition, the firm organized Truckload of Warmth that benefited Road Home, Crossroads Urban Center and Mothers without Borders.

Two Men and a Truck bills itself as the largest franchised moving company in North America, with more than 200 locations and more than 1,300 trucks on the road.

Each location is independently owned and operated.

TRAVEL/TOURISM • Gov. Gary R. Herbert has

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

Feb. 27-March 4, 2012

15

The Enterprise

Will Catholic bishops and the religious right save Obama?

What is most striking about Catholic faithful, let alone the rest the showdown over contracep- of the American electorate. Then tive freedom is not the politi- they would impose it on everyone, cal victory that President Obama as the theorists of the religious earned by standing up for wom- right suggest every time they deny en’s reproductive rights, although the separation of church and state.

The bishops have nothing to his Republican adversaries are lose except their flock, certainly helping him whose respect for the to make the most of it. hierarchy has plunged Those adversaries don’t anyway over its resisseem to realize they have tance to reform and its fallen into a trap, whether failure to punish abuses the White House set them far graver and more sinup intentionally or not.

While the Catholic ful than contraception. If bishops and their allies on they had to stand for electhe religious right insist Joe Conason tion, not many of them that this is an argument would be left standing. over the First Amendment, their And if they had to face a referentrue, longstanding purpose now dum on this current matter, they stands revealed to the public. They would lose resoundingly to the would begin by imposing their president, according to the latest dogma on every woman unlucky survey data.

In a poll taken this month for enough to work for an employer who shares it — an agenda that is the Coalition to Protect Women’s deeply unpopular even among the Health Care, Public Policy Polling

The 'fairness' fraud

During a recent Fox News programs began throwing money Channel debate about the Obama at teenage girls who got pregnant. administration’s tax policies, Children born and raised Democrat Bob Beckel raised the without fathers are a major probissue of “fairness.” lem to society and to themselves.

He pointed out that a child There is nothing “fair” about born to a poor woman in the Bronx increasing the number of such enters the world with far children. worse prospects than a A more fundamental child born to an affluent problem with the “faircouple in Connecticut. ness” issue raised by

No one can deny Beckel and many others that. The relevant quesis the slippery vaguetion, however, is: How ness of the word “fair.” does allowing politicians To ask whether life is Thomas to take more money in fair — either here and Sowell taxes from successful peonow, or at any time or ple, to squander in ways place around the world, that will improve their own reelec- over the past several thousand tion prospects, make anything years — is to ask a question whose more “fair” for others? answer is obvious. Life has sel Even if additional tax rev- dom been within shouting disenue all went to poor single moth- tance of fair, in the sense of even ers — which it will not — the approximately equal prospects of multiple problems of children success.

Countries whose politiraised by poor single mothers would not be cured by throwing cians have been able to squander money at them. Indeed, the sky- ever larger amounts of a nation’s rocketing of unwed motherhood resources have not only failed to began when government welfare make the world more fair, the con-

found that 57 percent of Catholic voters endorse the Obama “compromise” that would ensure continued prescription birth control for women working in religious institutions, without requiring those institutions to pay directly for that coverage. Only 29 percent sided with the bishops, the religious right and the Republicans, while 5 percent actually think the religious institutions should pay for contraceptive coverage regardless of their doctrine. The cross-tabs of the PPP poll show that Latino Catholics, Catholic independent voters and Catholic women support the Obama solution by wide margins. (The most recent poll

by Fox News Channel shows the same overwhelming approval for the president’s position among the general public, with 61 percent of voters on his side versus only 34 percent against.)

Those statistics are no threat to the bishops, of course, but represent a profound problem for the Republican leaders and candidates who have signed up for this male geriatric crusade against modernity. Mitt Romney, for instance, seems to believe that by stoking evangelical paranoia about a supposed “war on religion” by Obama, he will subdue evangelical paranoia about his Mormonism (which, by the way, expressly permits birth control). His pandering commenced when he announced his 2012 candidacy, but grew still more intense this week when he accused the president of perpetrating an “assault” on religion.

Such tactics are unlikely to placate the prejudices arrayed against Romney — and even if they did, he will pay a very high price next fall for joining the angriest and most extreme

culture warriors on this issue.

Congressional Republicans will be courting the same danger if, as promised, they propose legislation that would overturn the Obama compromise and deprive women working for religious institutions of equal rights to contraceptive services.

The president should hold fast. He has proved that it is possible to uphold the principle of full access to birth control, which has been the pro-family social policy of the American majority for half a century, while respecting the religious convictions of all Americans. The wild ranting of his enemies is only helping him now — and may yet ruin them in November.

centration of more resources and power in these politicians’ hands has led to results that were often counterproductive at best, and bloodily catastrophic at worst.

More fundamentally, the question whether life is fair is very different from the question whether a given society’s rules are fair.

Society’s rules can be fair in the sense of using the same standards of rewards and punishments for everyone. But that barely scratches the surface of making prospects or outcomes the same.

People raised in different homes, neighborhoods and cultures are going to behave differently — and those differences have consequences. The multiculturalist dogma may say that all cultures are equal, or equally deserving of respect, but treating cultures as sacrosanct freezes people into the circumstances into which they happened to be born, much like a caste system.

While talk about “fairness” may provide a fig leaf to cover

politicians’ naked attempts to grab more and more of the nation’s resources to spend, there is no assurance that raising tax rates on “the rich” will result in any more tax revenue for the government.

High tax rates have too often simply caused wealthy people to put their money into tax-free securities or to send it overseas.

Four years ago, TV interviewer Charles Gibson pointed out to candidate Barack Obama that raising capital gains tax rates had on a number of occasions led to less capital gains tax revenue being collected — and, conversely, lowering the capital gains tax rates had on other occasions increased the amount of capital gains revenue collected by the government.

Obama readily admitted that.

But he said that “fairness” justified a higher tax rate on “the rich.”

Yet how does a higher tax rate on paper, without a real increase in the amount of taxes actually collected, promote fairness?

However, raising tax rates on “the rich” pays off politically, even if the government loses revenues when the rich put their money into tax shelters.

High tax rates in the upper income brackets allow politicians to win votes with class warfare rhetoric, painting their opponents as defenders of the rich.

Meanwhile, the same politicians can win donations from the rich by creating tax loopholes that can keep the rich from actually paying those higher tax rates — or perhaps any taxes at all.

What is worse than class warfare is phony class warfare.

Slippery talk about “fairness” is at the heart of this fraud by politicians seeking to squander more of the nation’s resources.

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

Copyright 2012 Creators.com.

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

Copyright 2012 Creators.com

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Introducing HumanaVitality, a groundbreaking wellness program that helps boost energy, push productivity, and breathe new life into the Utah work force.

Unlike other programs, HumanaVitality is based on proven research. It rewards the healthy choices its members make. It’s tailored to each member’s health status and lifestyle, so it can support people better in working toward their goals – and reward them better when they achieve them. Big or small, each positive change earns Vitality Bucks ®, which can buy the things people really want.

HumanaVitality is a fun, straightforward, and engaging healthcare benefit for your company. Give your people the right resources to be healthier, and you’ll see a healthier bottom line.

Start the change today. Go to HumanaVitality.com or call 801-256-6200 or 1-800-884-8328.

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The results were compiled using Vitality’s global experience. They are not a guarantee of future results for HumanaVitality.

Humana Health Benefit Plans are insured by Humana Insurance Company.

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