Shingle warranties: More marketing bullshit

Bill Collins, president & CEO of GAF Materials Corp., Wayne, NJ., presented a business forecast for 2004-including asphalt price and availability-and a variety of suggestions on surviving in this difficult business climate. Roofing Siding Insulation magazine (RSI) did interview with Collins and one good question as well as a very interesting answer appear below:

RSI: Shingle warranties seem to be getting longer and longer. Is this a sign that the products have been upgraded or is it more of a marketing strategy?

BILL COLLINS: Last year, the entire industry was forced to follow a certain manufacturer's shortsighted laminate shingle warranty upgrade from 25 to 30 years. For most manufacturers, it was strictly a marketing decision. GAFMC was the last to acquiesce and actually did increase longevity by going to heavier fiber glass mats and increased overall shingle weight. However, the result has not been good for the industry, as the overall profitability has deteriorated for contractors, distributors, and manufacturers-with the laminate mix only recently starting to return to previous levels.

Rising prices for asphalt shingles: slow but sure...

The National Roofing Contractors Association (NRCA) issued recently a special report that describes asphalt roofing industry in 2005.

The report mentioned Oil prices are at record levels, and many construction materials-and virtually all roofing materials-are made from derivatives of crude oil. Venezuela and Nigeria are blamed for having instability in oil and asphalt supply causing troubles to American asphalt roofing industry.

While the U.S. has been placed on high alert for a terrorist attack, the roofing industry has been placed on alert for a coming asphalt crisis.

U.S. roofing suppliers on the East Coast rely heavily on Venezuela for about 90% of roofing asphalt. However, the problem is expected to expand throughout the country.

Harold R. Beattie Jr., sr. vice president, CFO and treasurer of ElkCorp, Dallas, said, “There’s two reasons that Venezuela is important. It exports oil to the U.S., which has been refined, and as part of the refining process asphalt is created. It also exports asphalt to the U.S.
Venezuelan asphalt is a high sulfur blend that is generally a good mix for shingles. A refinery producing a light crude produces less asphalt than a heavy crude oil. Venezuela refineries produce heavy crude.
Shingle prices needed to go up because asphalt costs are very high. The industry needs to recover those prices.”
Asphalt prices at the end of year were around $200 per ton for roofing grade, delivered. Cost varies on the distance the asphalt is shipped to the plant. Delivery is a significant part of cost. Asphalt costs were as high as $240 to $250 per ton in February.

There is another, related concern. Different asphalts have different properties, and it will be increasingly important for you to work closely with your most trusted suppliers to be sure they are taking these changes into account. It is fair to ask roofing material manufacturers what changes, if any, you might expect in the materials you will be buying and what testing has been done to ensure the long-term performance of new and different asphalts and asphalt blends.

NRCA also provided some recommendations:
1. Work closely with suppliers to get the best information about pricing and availability. Delivery times for many products now exceed one month.
2. Whenever possible, place your orders early. Planning is crucial-especially on large, fixed-price contracts.
3. Keep your customers well-informed of the situation. It may make sense to take delivery earlier than usual to ensure material availability and obtain firm pricing. Include a contract provision that reflects how you have agreed to handle the problem.
4. Consider including contract provisions intended to reflect market conditions. That way, you will not be caught in a situation where you cannot perform the contract when required by the general contractor or owner because either the necessary materials are not available or if a job has been delayed.

U.S. President George W. Bush speaks out on roofing

U.S. President George W. Bush: "Today, our fellow citizens, I have no choice but to welcome European modern roofing solutions to our country... None of us will ever forget this day... Good luck and God bless America!"

Larry "the Liquidator": It's too late for prayers...

From today's prayer: ... Soon... It's gonna be lots of cheap oil, gas and energy... We just need to wait a little bit... If China reduces its appetite for the oil... If they find oil on the Moon... Soon...

What a strange human nature... She wants a Miracle all the time, even if there were already lessons in the past...

There won't be a miracle. There won't be a cheap oil any more. No cheap oil means no more cheap gas, asphalt shingles, energy... You have to look for alternatives. Now.

But let's listen to Larry "the Liquidator" from a well known movie "Other People's Money" (1991).

You can also read his excellent speech:
...Amen. And amen. And amen. You have to forgive me. I'm not familiar with the local custom. Where I come from, you always say "Amen" after you hear a prayer. Because that's what you just heard -- a prayer. Where I come from, that particular prayer is called "The Prayer for the Dead." You just heard The Prayer for the Dead, my fellow stockholders, and you didn't say, "Amen."

This company is dead. I didn't kill it. Don't blame me. It was dead when I got here. It's too late for prayers. For even if the prayers were answered, and a miracle occurred, and the yen did this, and the dollar did that, and the infrastructure did the other thing, we would still be dead. You know why? Fiber optics. New technologies. Obsolescence. We're dead alright. We're just not broke. And you know the surest way to go broke? Keep getting an increasing share of a shrinking market. Down the tubes. Slow but sure.

You know, at one time there must've been dozens of companies making buggy whips. And I'll bet the last company around was the one that made the best g--damn buggy whip you ever saw. Now how would you have liked to have been a stockholder in that company? You invested in a business and this business is dead. Let's have the intelligence, let's have the DECENCY to sign the death certificate, collect the insurance, and invest in something with a future.

"Ah, but we can't," goes the prayer. "We can't because we have responsibility, a responsibility to our employees, to our community. What will happen to them?" I got two words for that: Who cares? Care about them? Why? They didn't care about you. They sucked you dry. You have no responsibility to them. For the last ten years this company bled your money. Did this community ever say, "We know times are tough. We'll lower taxes, reduce water and sewer." Check it out: You're paying twice what you did ten years ago. And our devoted employees, who have taken no increases for the past three years, are still making twice what they made ten years ago; and our stock, one-sixth of what it was ten years ago.

Who cares? I'll tell ya: Me. I'm not your best friend. I'm your ONLY friend. I don't make anything? I'm makin' you money. And lest we forget, that's the only reason any of you became stockholders in the first place. You wanna make money! You don't care if they manufacture wire and cable, fried chicken, or grow tangerines! You wanna make money. I'm the only friend you've got. I'm makin' you money.

Take the money. Invest it somewhere else. Maybe, maybe you'll get lucky and it'll be used productively. And if it is, you'll create new jobs and provide a service for the economy and, God forbid, even make a few bucks for yourselves. And if anybody asks, tell 'em ya gave at the plant.

And by the way, it pleases me that I am called "Larry the Liquidator." You know why, fellow stockholders? Because at my funeral, you'll leave with a smile on your face AND a few bucks in your pocket. Now that's a funeral worth having!

Terminator: Asta La Vista, Asphalt shingles...

Asta La Vista, Asphalt shingles...
Amen.

April 2004. Rooflandia at the National Home Show in Toronto

A special web banner has been set up to promote Rooflandia participation at the National Home Show in Toronto. April 2004.

Rooflandia display at the National Home Show in Toronto. April 2004.

Rooflander, a friend and Rooflandia display at the National Home Show in Toronto. April 2004.

Rooflander meets a Funny Guy! Do you remember that guy? Yes, it's Mike Bullard. His show is no longer on TV, but the guy is still smiling, which is a very good sign.