Survey Results as 03/08/2010:
The Homestar program will:
Boost demand somewhat
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Not change our sales much
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Boost demand significantly
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Decrease sales, by focusing homeowners on other products or creating too much red tape.
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The jury may still be out somewhat on President Obama's Homestar program, but more than 60 percent expect the program could mean good things for revenues. Many people are concerned about the administration of the program, and details on that have yet to be released... Who will be the clearinghouse for the incentives? What kind of paperwork will be involved? All legitimate concerns that will affect overhead and cash flow in the channel.
"Any program that encourages consumers to repair their properties and reduce energy costs is a plus for the economy and industries that support the remodeling and repair space," writes the president and CEO of one window company. "There still remains the matter of high unemployment amongst white collar workers, increased taxes, increased health insurance costs, and tight credit that will offset programs that encourage spending. I re-read industry projections for windows, patio doors, and other doors predicting growth in 2010 that is encouraging, so perhaps the proposed legislation will be the boost needed to make projections a reality."
Still, several readers point out that the devil is in the details and express having some significant concerns about the execution and the long-term results of the program. "I understand that the President is trying to jumpstart the economy but to pass legislation giving current homeowners a credit to upgrade their windows and doors knowing full well that in order to pay for it relies on borrowing money that our children and grandchildren will have to pay back is reprehensible," says the president and CEO of a door company. "We will all pay for it in the end. Remember, government must take taxes from us in order to give that same money to someone else. A better way would be to reduce the tax burden for business to give us more income to upgrade our facilities and create more jobs."
One dealer weighs in with: "This program has the potential for a short term increase in window and door sales but it won't save the industry. Some people will take advantage of the 'free money' but what concerns me is where will the money come from? What happens when this program is finished and sales drop? How will the overburdened state governments provide the quality assurance oversight required? Remember Cash for Clunkers? In order to recover, our economy must be allowed to correct itself. The free market system works. Cutting taxes and minimizing government regulation can help this to happen. Artificial stimulus will only prolong the inevitable. Poorly-run businesses should be allowed to fail so we can learn from their mistakes and become stronger. But artificially stimulating the economy now will only make the correction last longer and be more challenging."
Another dealer remains skeptical as well: "Just like the drop in auto sales, we will see a drop in window sales. Of course the manufactures will want to be paid in a timely manner but since most retailers work on a line of credit, with interest of course, they will end up holding the bag. More government workers will have to be hired for administering and oversite of the program and once they get on the gravy train they never get off. I advocate for our industry to reject these handout programs in favor of real but steady growth."
As more details on the Homestar program emerge, we'll keep you posted. In the meantime, don't hesitate to touch base if you have some additional thoughts.