Hints of Optimism at NAED Summit

May 21, 2010
Electrical distributors, manufacturers and reps who attended the National Association of Electrical Distributors (NAED) annual National Leadership Summit

Electrical distributors, manufacturers and reps who attended the National Association of Electrical Distributors (NAED) annual National Leadership Summit in Chicago this week were far more upbeat about the prospects for a recovery over the second half of 2010 and into 2011 than they were at the same conference last year.

The turnout for the conference was stronger and several manufacturers revived their after-hours hospitality suites, the absence of which last year underscored the austerity measures being taken by everyone in the face of a falling market.

Some of the optimism was tempered by remarks from various presenters in the conference's general sessions. Economist Alan Beaulieu, from the Institute for Trend Research, tried repeatedly to offer some hopeful signs during the presentation of his economic forecast but each time countered himself with additional causes for concern. Rising interest rates, the growing tax burden being heaped on the wealthy and businesses and a surge of inflation will make the business climate over the coming decade very different from what the U.S. has seen since the 1980s. “This will be familiar to the older managers, but the younger generation of managers has never seen anything like this,” he said.

Beaulieu did offer some suggestions for electrical companies preparing to face an altered economic reality. He said inflation pressures that will prevail in the next decade will favor locking in long-term fixed pricing and terms on everything possible while avoiding getting locked into the same long-term deals by customers; that fixed-rate debt at reasonable levels to be paid off with cheaper money over time will be one of the smartest investments available; and that the safest investments will be in inflation-adjusted assets such as real estate.

Other presenters brought similarly sobering outlooks. Frank Abagnale, the former con-man turned author and FBI security consultant (best known as the subject of the movie “Catch Me If You Can”) gave a detailed look at white-collar crime and identity theft and ways to combat them; and criminologist Jay Albanese from Virginia Commonwealth University shared results of an NAED study on theft and fraud in electrical distribution.

The May 17 general session also featured a panel discussion on the IDEA suite of e-business tools moderated by Michael Marks, managing partner, Indian River Consulting Group, Melbourne, Fla. On the panel were Bob Reynolds, CEO, Graybar Electric Co., St. Louis; Chris Hartmann, executive vice president and CEO of International Electrical Supply Corp. (Rexel/Gexpro), Dallas; Ron Schlader, vice president of operations and quality, Crescent Electric Supply Co., East Dubuque, Ill.; and Phil Barrios, senior director, corporate marketing and e-business, Hubbell Inc., Orange, Conn.

The distributors on the panel have all made major investments in their business systems so they can eliminate data errors by doing business electronically through IDEA's Industry Data Warehouse (IDW) and they expect their vendors feed the IDW with their electronic product data. Hartmann said his company has “tens of millions of dollars to spend” on its new e-business initiative. Schlader said IDEA has helped Crescent Electric Supply improve its customer service by helping the company “pick it right, pack it right and ship it right.”

A long-time supporter of IDEA, Graybar's Reynolds said distributors, manufacturers and reps can see where the electrical market is going with e-commerce by observing the retail world. “Whatever the retail world is doing today, we are going to be doing tomorrow,” he said.