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Originally Processed With FOIA(s): FOIA Number: S S FOIA MARKER This is not a textual record. This is used as an administrative marker by the George Bush Presidential Library Staff. Record Group/Collection: George H.W. Bush Presidential Records Collection/Office of Origin: Speechwriting, White House Office of Series: Speech File Backup Files Subseries: Chron File, 1989-1993 OA/ID Number: 13794 Folder ID Number: 13794-010 Folder Title: NAW (National Association of Wholesale-Distributors) 1/23/92 [OA 7567] Stack: Row: Section: Shelf: Position: G 26 22 2 5 NAWD Dirk 872-0885 Van Dongen, president of extremely supportive of Admin. Hank them a 18,000 members citil rts. agamst federal mandates parental leaves against tax increases leadershipin HEAL Dirk iz co-ch. of Health Care Equity Axn League Molly working on details Call for support of economic growth pkg. will TBD make presentation to POMS intend to have backdrop NAW salutes Bush ml Bills/Skins #1 the side (diff. favorite superbow) GB#1 other sike Issues important 1 health care reform - tax policy rates beean morethan tax credits -product liabilityreform 1 employer mandates parental leave sustain work w/ Admin, veto to Support 1 not happy w/ avil As- NADA They like Resident will send copy fannualreport 1 2nd time met w/ POTUS 1st time was week after inang. POTUS had aningitis (same people will be at this, they will remember.?) 1st trade asso. to endorse B-Qticket. ticket. day after nomination Dukaki3 got - - Mick Calio, prior to 1st trip to WH, was Sr. UP of gort. relations Current Si VP Gov Rel. Alan Kranowitz, had clures job inReagodadmin. end of ack - Dirk Alan video done last yr. industry of entrepenurial John Wayne Repubs." Strong supporters of Admin. Withdrawal/Redaction Sheet (George Bush Library) Document No. Subject/Title of Document Date Restriction Class. and Type 01. Memo Carol Aarhus to Andy Ferguson, re: Nat'l Association of 01/15/91 P-5 Wholesale Distributors (NAW). (1 pp.) Collection: Record Group: Bush Presidential Records Open on Expiration of PRA Office: Speechwriting, White House Office of (Document Follows) Series: Speech File, Backup By SN (NLGB) on 4/5/2005 Subseries: WHORM Cat.: File Location: NAW [National Association of Wholesale Distributors] 1/23/92 Date Closed: 11/16/2004 OA/ID Number: 07567 FOIA/SYS Case #: Re-review Case #: 2004-2265-S P-2/P-5 Review Case #: MR Case #: Appeal Case #: MR Disposition: Appeal Disposition: Disposition Date: Disposition Date: RESTRICTION CODES Presidential Records Act - [44 U.S.C. 2204(a)] Freedom of Information Act - [5 U.S.C. 552(b)] P-1 National Security Classified Information [(a)(1) of the PRA] (b)(1) National security classified information [(b)(1) of the FOIA] P-2 Relating to the appointment to Federal office [(a)(2) of the PRA] (b)(2) Release would disclose internal personnel rules and practices of an P-3 Release would violate a Federal statute [(a)(3) of the PRA] agency [(b)(2) of the FOIA] P-4 Release would disclose trade secrets or confidential commercial or (b)(3) Release would violate a Federal statute [(b)(3) of the FOIA] financial information [(a)(4) of the PRA] (b)(4) Release would disclose trade secrets or confidential or financial P-5 Release would disclose confidential advise between the President information [(b)(4) of the FOIA] and his advisors, or between such advisors [a)(5) of the PRA] (b)(6) Release would constitute a clearly unwarranted invasion of P-6 Release would constitute a clearly unwarranted invasion of personal privacy [(b)(6) of the FOIA] personal privacy [(a)(6) of the PRA] (b)(7) Release would disclose information compiled for law enforcement purposes [(b)(7) of the FOIA] C. Closed in accordance with restrictions contained in donor's deed of (b)(8) Release would disclose information concerning the regulation of gift. financial institutions [(b)(8) of the FOIA] (b)(9) Release would disclose geological or geophysical information January 15, 1991 MEMORANDUM FOR ANDY FERGUSON FROM: CAROL AARHUS CA SUBJECT: NAT'L ASSOCIATION OF WHOLESALE DISTRIBUTORS (NAW) I just spoke with the president of the Association, Dirk VanDongen (for future reference, his telephone number is 872- 0885). He is sending via messenger a copy of their annual report, but here's what we discussed on the phone This is the second time the group has met with the President. The first time was right after the inauguration -- the President had laryngitis, so Sununu got to do most of the speaking. The people who will be in attendance at this event were also at the last one. The laryngitis factor may lend itself toward a joke or two. POTUS did a video for the group last year. The Association claims to be the first trade association to endorse the Bush-Quayle ticket. They endorsed the day after Dukakis got the nomination. We never like to say that a group was the first, just because they claim it doesn't always necessarily mean its true. However, we can say that the President thanks them for their support early on in the campaign and for their continued support blah, blah, blah. Acknowledge in the beginning of the speech -- Dirk VanDongen and Alan Kranowitz, the Senior VP for government relations. VanDongen says that this group is an industry of entrepreneurial "John Wayne Republicans". He said although they are individualistic, they are very committed to George Bush and the Administration. Important issues: health care reform; tax policy -- rates mean more to them than tax credits; product liability reform employer mandates (i.e. parental leave) they work with the Administration to sustain vetoes, the group is not happy with the Civil Rights Act or the Americans with Disabilities Act. We probably shouldn't even mention them. The whole purpose of this event is to thank them for their continued support of the Administration and the President, and to encourage support of the new economic growth initiatives that will be announced in the State of the Union. You might want to talk to Tony about what we can say about these initiatives. I'll give you more as I get it. Call if you need anything else. I'm at extension 7754. NAWREPORT July 15 1988 Presidential Endorsement WDPAC Backs George Bush How to Win in Washington NAW helps orchestrate a stunning vic- he NAW Wholesaler-Distributor tory on costly long-term.care/payroll T always is on the record in favor of our posi- tax increase proposal. P. 4 Political Action Committee's tions. Michael Dukakis generally is not. (WDPAC) Board of Directors has unanimously endorsed George "Take taxes. George Bush is against rais- Bush for President. WDPAC is believed to be ing taxes to cut the deficit. Governor Florida Senate Race the first national association PAC formally to Dukakis refuses to rule out tax increases on WDPAC profiles Rep. Connie Mack business. announce its backing of the Vice President. (R- FL). P. 8 While WDPAC's principal mission is to "Take mandated health insurance. Bush support pro-business candidates in House is against this explosively costly proposal. Two New Insurance Products and Senate races, the Board of Directors Dukakis already has established it in Mas- voted to endorse Vice President Bush at this sachusetts and has endorsed Sen. Kennedy's NAW offers improved business travel federal initiative. accident and group term life insurance time to dramatize the importance of the programs. P. 12 choice facing wholesaler-distributors in this "Take Claude Pepper's long-term home November's presidential election. health care bill. Bush opposed this five-year "Our membership has charged us with $30 - $60 billion payroll tax increase, as did the responsibility of supporting candidates a majority of the Democratic-controlled from both parties who are pro-business," House of Representatives. Dukakis came out in favor of it. says George Seeds, President of Findley Welding Supply, Inc., Youngstown, Ohio, "Take mandated parental leave. Bush and WDPAC's Chairman of the Board. opposes it. Dukakis has endorsed it. "When you run down the list of economic policy issues of critical importance to "Basically," says WDPAC Treasurer and wholesaler-distributors, George Bush almost NAW President Dirk Van Dongen, "George (Continued on back page.) Status Legislative, regulatory overview for wholesaler-distributors. P. 2 OSHA's HCS Despite temporary stay of regulation, wholesaler-distributors should proceed with implementation. P. 14. 11 Supreme Court Decision Vice President George Bush, in bis White House office, meets with NAW President Dirk Van Dongen and Senior High court define permissible 'gray-market' Vice President-Government Relations Nick Calio. imports. P. 16. NATIONAL ASSOCIATION OF WHOLESALER-DISTRIBUTORS 1725 K St., N.W., Washington, D.C. 20006 Supreme Court Issues Ruling on 'Gray-Market' Imports n May 31, in K Mart Corp. v. Cartier goods bearing a valid U.S. trademark but im- O Inc., et al., a sharply divided ported without the consent of the trade- Supreme Court voted to permit mark owner. Despite objections from U.S. some gray-market imports and to manufacturers holding prestigious trade- prohibit others by invalidating certain pro- marks, the Customs Service has allowed visions of the Customs Regulations. gray market imports under a "common- The Customs Regulations in question control" exception (in the case of affiliated allowed entry of gray market products: (1) entities) and under an "authorized use" A "gray market" if both the foreign and the U.S. trademark are exception where the foreign goods bear a trademark under authorization of the U.S. owned by the same business entity, (2) the product is a foreign- foreign and domestic trademark owners are owner (although the foreign manufacturer subject to common ownership or control, is independent of the trademark holder). manufactured good, or (3) the trademark has been applied to the Certain wholesalers and retailers carved bearing a valid U.S. foreign product under authorization of the out a price advantage for themselves by pur- U.S. owner. trademark, that is im- chasing goods abroad and, even after pay- The Supreme Court decision was based ing import duties, selling them at prices well ported without the con- primarily on an evaluation of common below authorized competitors. sent of the U.S. trade- ownership and control of the trademark: The case found its way to the courts when a U.S. firm registers a domes- when a group of U.S. manufacturers founded mark bolder. tic trademark for goods manufactured by the Coalition to Preserve the Integrity of an affiliate abroad, an unaffiliated third- American Trademarks (COPIAT). COPIAT party may buy the goods and ship them brought suit seeking judicial reversal of t. to the U.S. According to published sources, regulations permitting gray market imports under the common-control and authorized- most U.S. gray market imports fall in this category and are legal under the Supreme use exceptions. The group was generally dis- Court's ruling. appointed with the ruling and has vowed to continue its efforts by filing additional however, when a U.S. firm holding a lawsuits and by seeking federal legislative U.S. trademark authorizes production by an relief. independent foreign manufacturer, the foreign manufacturer may not ship them to No federal legislation on the issue is the U.S. without authorization, nor may a likely in 1988 and prospects for next year are unclear. third-party buy them and ship them to the U.S. without authorization. Those seeking additional information For 50 years the Customs Service regu- may write NAW for its Legal Advisory on the lations have not applied a prohibition to all subject, Supreme Court Defines Permiss- able Gray Market Imports. WDPAC Backs George Bush the Washington Post recently noted in a (Continued from page 1.) front-page article, a look at Dukakis' eco- Bush relies on the free market to meet our nomic positions reveals an attitude about nation's needs, while Dukakis is much more government's role that "hardly qualifies as inclined to use federal taxing, spending, and conservative. During his recent campaign regulatory authority. Our strong preference for president, [he] has advanced proposals for marketplace solutions makes it logical that would substantially increase govern- that we support George Bush for President." ment intervention in a wide range areas Sometimes these entail 'publ. WDPAC's analysis of where Bush and private partnerships' in which government Dukakis fall on the public policy spectrum and business work together. Sometimes they is widely shared by political observers. As entail more coercive methods." 16 NAWREPORT CAMPAIGN '88 Interview With Vice President Bush eorge Bush was elected Vice Presi- NAW Report: Mr. Vice President, the Pro-Business G dent in 1980 and re-elected in Reagan/Bush administration enacted the 1984. He is a candidate for the Kemp-Roth tax reform bill in 1981 and Voter Registration Republican Presidential nomina- pushed through the historic 1986 Tax Business needs tion in 1988. NAW has had Reform Act, in which numerous tax pref- to turn out the numerous opportunities to work with the erences were exchanged for lower marginal vote in November. Vice President and bis staff over the last tax rates. How important are lower tax rates P. 4 seven years, including the NAW Forum on to economic growth? And what kind of Tax Reform, held in New Orleans in 1985, priority would you give to preserving them at which the Vice President met in a town- in your administration? meeting forum with over 300 NAW members. Vice President Bush: I am opposed to tax increases. Prior to becoming Vice President, Mr. Bush served as Director of the Central For too long, tax increases have been Intelligence Agency, Ambassador to China, used to feed congressional spending, not Chairman of the Republican National for true deficit reduction. This should be Committee, and as a member of the House a warning to all future Presidents against tax of Representatives. NAW recently bad the hikes-unless we can control Congress' opportunity to discuss current issues and spending, increased revenues will mean in- the Presidential race with the Vice creased spending. President. SPECIAL 88 ISSUE NAW President Dirk Van Dongen and Senior Vice President-Government Relations Nick Calio meet with Vice President George Bush in bis White House office. NATIONAL ASSOCIATION OF WHOLESALER-DISTRIBUTORS Get Out The Business Vote! "NAW has joined with several lease immediately mark your and absentee ballot if you will be traveling P your spouse's personal and of- and unable to get to the polls on Elec- other major associations to form fice calendars with reminders to tion Day (including overseas travel). If Free Enterprise '88, an initiative VOTE ON ELECTION DAY, you think you or your spouse might NOVEMBER 8. Every business em- be out of town on Election Day, call to turn out the pro-business vote ployee who votes is critical if we are to the number listed below for your state in November. This may well be positively affect the outcome of the to learn how you can obtain an Presidential, Congressional, State and absentee ballot. Request these the most important thing we do Local races. materials immediately so you have this year." sufficient lead time to vote absentee. Registration You voted in the last election-so Besides travel, the states have varying Victor Kanners you're registered to vote, right? requirements regarding other valid NAW Chairman of the Board WRONG! reasons for voting by absentee ballot, If you have moved or changed including blindness, disability, mili- your name, you must re-register tary or student status or for religious as a new voter. In some states if you reasons. You may call the appropriate number listed below to learn which missed voting in the last election, your registration is no longer valid. requirements apply in your state of residence. If you're not sure you're registered, call the number listed below for your Make sure you send an absentee ballot state and ask for information on how far enough in advance of Election Day you can register today. Act today to to ensure that your vote will be ensure that you can exercise your counted. In many states, absentee Right to Vote on Election Day! ballots must be returned several days before the election to be counted. Absentee Voting Don't forfeit your Right to Vote Absentee voting requires you to plan just because you are out of town. ahead. Every state and the District of Remember, every vote counts! NAUREPORT Columbia permit you to vote by Editor, Philip B. Jaffa © 1988 Voter Contacts By State NAW REPORT is published monthly by the National Asso- ciation of Wholesaler-Distributors, 1725 K St., NW, Washington, D.C. 20006. (202 872-0885) Readers are Alabama Idaho Missouri Pennsylvania encouraged to reproduce or borrow our material in whole (205) 261-3126 (208) 334-2852 (314) 751-4875 (717) 787-5280 or in part, with attribution, but we would appreciate Alaska Illinois Montana Rhode Island receiving tear sheets for our files. Camera-ready artwork is available by special arrangement at a nominal charge. (907) 586-6181 (217) 782-1547 (406) 444-4732 (401) 277-2345 Arizona Indiana Nebraska South Carolina Design: Neo Graphix (602) 267-8683 (317) 232-3939 (402) 471-2554 (803) 748-4944 Arkansas lowa Nevada South Dakota (501) 371-1010 (515) 281-5781 (702) 885-5203 (605) 773-3537 California Kansas New Hampshire Tennessee (916) 445-0820 (913) 296-4559 (603) 271-3242 (615) 741-7956 Colorado Kentucky New Jersey Texas (303) 866-2041 (502) 564-7100 (609) 292-3760 (512) 475-3091 Connecticut Louisiana New Mexico Utah (203) 566-3106 (504) 925-7885 (505) 827-3620 (801) 533-5115 Delaware Maine New York Vermont (302) 736-4277 (207) 289-3501 (518) 474-6220 (802) 828-2304 District of Maryland North Carolina Virginia Columbia (301) 974-3711 (919) 733-7218 (804) 786-6551 (202) 727-2504 Massachusetts North Dakota Washington Florida (800) 462-8683 (701) 224-2900 (206) 753-7121 (904) 488-7690 Michigan Ohio West Virginia Georgia (517) 373-2540 (614) 466-2585 (304) 345-4000 (404) 656-2871 Minnesota Oklahoma Wisconsin Hawaii (612) 296-9218 (405) 521-2391 (608) 266-8005 (808) 548-3415 Mississippi Oregon Wyoming (601) 359-1383 (503) 378-4144 (307) 777-7378 4 NAW Dirk Van Dongen Photo Copy Preservation DELIVER TO: Carol Darhus 111 1/2 Old Exec Office Bldg X-RAYED NATIONAL ASSOCIATION OF WHOLESALER-DISTRIBUTORS MA OF WINNING IN WASHINGTON REPORT National Association 1990 AINN UAL of Wholesaler-Distributors The National Association of Wholesaler-Distributors (NAW) is composed of thousands of Direct Member companies and a federation of national, regional, state, and local commodity line Associations and their member firms which, collectively, total more than 40,000 companies. In addition to its government relations program, NAW's scope encompasses the activities of the Wholesaler-Distributor Political Action Committee (WDPAC), the Distribution Research & Education Foundation (DREF), and the NAW Service Corporation (SC). MESSAGE OPENING Don Carlson, President, Carlson Systems, NAW Chairman of the Board OW do you feel NAW as a dues-paying Direct As you page through this H about what goes on Member. It's time to under- Annual Report, I think you'll in Washington, stand the issues, and voice see what NAW can do for you DC? Are you too your position to your elected and you can do for NAW busy to worry about it? Are officials. Write them. Call in government relations in you so cynical that you figure them-or better yet, get a political action in research you can't do anything about it? group of wholesalers and go and education and in As NAW Board Chairman, visit them. It's time to contrib- improving the productivity I've traveled all over the ute to our Political Action and profitability of that country. I've talked to whole- Committee. miracle in the U.S. economy- saler-distributors in many Cursing the darkness won't wholesale distribution. different commodity lines. work. You've got to stand up Typically, executives in our for what you believe in. industry consider our nation's As I see it, there isn't any Don Carlson tax-and-spend-and-regulate- excuse whatsoever for the Don Carlson the-heck-out-of-business most prosperous and powerful President policies to be a major threat to nation in the history of the Carlson Systems our future and they curse world continuously living Omaha, Nebraska the darkness. beyond its means. NAW Chairman of the Board Well, folks, it's time to But it's up to us to do light a candle. It's time to join something about it. 1 AW's members achieved important MEMBERSHIP N objectives in 1990. Mandated parental leave legislation was defeated. Punitive estate tax provisions were amended. Unrealistic provisions affect- ing truck fleet operations were deleted from a clean air bill. There was a critical victory, too, on the judicial front. The Supreme Court largely followed NAW's brief in Hasbrouck v. Texaco. The lower courts and 35 state attorneys general had sought to make normal wholesale distribution procedures illegal under the antitrust laws. NAW's work in research and education also moved forward. The association convened a conference on distribution technology and released a new productivity- Dirk Van Dongen, NAW President enhancing study, The Tech- nology Maze in Wholesale Distribution: Choosing the Right Path. Given the have faced so many impon- industry's evolving financing derables in our economic and needs, the association also political future. published Financing Whole- One thing, though, is sale Distribution in the 1990s. certain. NAW is working to NAW makes And NAW's executive training promote your financial well- program at The Ohio State being. Your membership in University School of Business, NAW is a business invest- a difference the Wholesale Distribution ment on which we are com- Executive Management mitted to giving you a high Courses, received their rate of return. where it highest ratings ever. The NAW Service Corpo- ration chalked up its eighth counts on straight year of increased Dirk Van Dongen services to wholesaler- NAW President your bottom distributors. Unfortunately, the year ended with the economy line. slowing. The political mood appeared to have turned unfriendly to the business community's interests. It has been many years since we 2 The Wallace Co., Inc., Houston, Texas brought home the bacon for the wholesale distribution industry in 1990. They were one of four compa- nies awarded the prestigious Malcolm Baldrige National Award for Quality by the Commerce Department. "Investing in quality has completely turned our busi- ness around," says Michael Spiess, Executive Vice President and Chief Operat- ing Officer. "In the past three years, we have increased sales 70% and operating profits 750%. We have invested in NAW for the same reason we invested in quality. NAW's work on taxes, regulations, and in court have a significant impact on our profitability. We also like their promotional work on behalf of our indus- try. It's difficult to establish relationships with suppliers and customers if they don't have any idea what a whole- Clockwise from top left are John Wallace, Chief Executive Officer saler-distributor does." of Wallace Co. Inc.; C.S. Wallace, Jr., President; and C.S. The Wallace Co. distrib- Wallace, Sr., Chairman of the Board. utes pipes, valves, and fittings, primarily to the oil and chemical industry. President Bush congratulates John Wallace, Wallace Co.'s CEO, on receiving the prestigious Malcolm Baldrige Award. 3 AW and its member MEMBERSHIP N associations have a division of labor, says Joe Cook, Executive Vice President of the National Association of Chemical Distributors. "The commodity line groups handle specific marketplace issues. NAW addresses the broad, industry-wide concerns. It's a perfect complement. However, for NAW to have the re- sources to do its job, firms need to belong to NAW as dues-paying Direct Mem- bers." Joe Cook, Executive Vice President, National Association of Chemical Distributors USER simple green simple Left to right are John (Vice President), Jere (President), and Matthew Fonda (Vice President) of the John Day Co. Jere W. Fonda, President, benefits from NAW than any keep a family business intact. John Day Co. (center), other organization to which I NAW went to work on the proudly poses with his two belong," says the senior issue. We secured repeal in sons, Matthew W. Fonda, Fonda. Take one issue: 1990. I-call that a valuable Vice President, and John D Estate taxation. I've worked Direct Member benefit." John Fonda, Vice President (left), my entire life to create a Day Co. distributes farm at their corporate headquar family company. Congress equipment and industrial ters in Omaha, Nebraska. "I enacted 2036(c) in 1987, supplies. get as many, if not more which made it difficult to 4 Paul Ahrendt is President of Tool House/Henkle & Joyce, a wholesaler-distributor of hardware and construction supplies in the Midwest. "I'm living proof of the value of association-sponsored re- search and education," says Ahrendt. "I completed a leveraged buyout just days before the big recession hit the farm economy out here in '84. With the roof collapsing on me, I bought books and went to seminars and com- pletely changed my business practices. I'm very grateful to the Specialty Tools & Fasten- ers Distributors Association and NAW for their collective assistance. My advice to wholesaler-distributors is: Join NAW and your commod- ity line association, buy their Paul Ahrendt, President, Tool House/Henkle & Joyce publications, and attend their programs." The secret to NAW's effectiveness is its unique partnership with its member associations," says Thomas A. Fernley III, Chairman of the Board, Fernley & Fernley, Inc., and Managing Director of the National Wholesale Hardware Association, Philadelphia, Pennsylvania. "Collectively, we bring the entire resources of a $1.8- trillion-per-year industry to bear on legislative, regulatory, and judicial issues on industry public relations on general research and educa- tion programs and on business services. There is no more effective lobbying effort for distribution than NAW. The association is very well respected on Capitol Hill and at 1600 Pennsylavania Avenue." Tom Fernley, Chairman of the Board, Fernley & Fernley, Inc. 5 ANNUAL MEETING N-A-W Secretary of Defense Richard Cheney t was an extraordinary events in the Persian Gulf, objections to mandated I time to hold a public his remarks seem eerily on benefits. She promised a policy meeting. The target. presidential veto of parental Soviet Empire was Then-Labor Secretary leave legislation if it passed collapsing. The U.S. was Elizabeth Dole underscored the Congress a promise turning inwards to define a the administration's strong President Bush fulfilled. whole new set of national priorities. In this atmosphere, the collective, voluntary leader- ship of the wholesale distribu- tion industry was treated to an extraordinary parade of influential policymakers at the 1990 NAW Annual Meeting and Washington Conference. On everybody's mind, quite literally, was the ques- tion, "What lies ahead as we chart our course for the '90s both as wholesaler-distributors and as concerned Americans." Secretary of Defense Richard Cheney gave a tour de force review of national security in the Gorbachev era. He noted that America faced Then-Labor Secretary Elizabeth Dole receives a Special Leadership other security threats besides Award from NAW's Jim Anderson, Senior Director-Government the Soviets. In light of the Relations, and Dirk Van Dongen, President. 6 N NAMS 1990 WHOLESALER ASSOCIATION Annual NATIONAL DISTRIBUTORS OF Meeting W NAW E & FBI Director William Sessions S FBI Director William Sessions briefed wholesaler- distributors on the growing- National Association of not diminishing-level of military and industrial espio- Wholesaler-Distributors nage. Sessions also spent a considerable portion of his N time addressing the issues of illegal drug usage and the role employers have to play in ridding the nation of that problem. Sessions advised CEOs to Left to right are Rep. Henry Waxman (D-CA), Sen. Alan Simpson educate their managers on the (R-WY), and Mary Tavenner, NAW Senior Director-Government issue. Most employers, he Relations. notes, are simply unaware of what this problem is costing Assistant Senate Republi- them. can Leader Alan Simpson (R- WY) and Health and Environ- ment Subcommittee Chairman Rep. Henry Waxman (D-CA) went head-to-head on health The leaders of the care policy. Waxman proposed a wholesale distribution version of Senator Kennedy's mandated health insurance proposal costing perhaps $50 industry meet with billion per year. Simpson expressed the basic sentiment of most leading policymakers in wholesaler-distributors: "Who the hell is going to pay for it?" the nation's capital. 7 enator Chuck Robb (D- ANNUAL MEETING S VA) gave industry leaders a look at fiscal conservatism in the Democratic Party. The budget cannot be balanced, in Robb's view, unless legislators are willing to say "no" even to worthwhile expenditures. Robb, who frequently is mentioned as a "future" Democratic candidate for President, also talked about his efforts to move his party back towards the political center-specifically, his founding of the Democratic Leadership Council. Senator Conrad Burns (R- MT), one of the Senate's most colorful members, regaled wholesaler-distributors with a Westerner's view of the Senator Chuck Robb (D-VA), left, shares a few thoughts with nation's capital. Burns was NAW President Dirk Van Dongen before addressing the NAW particularly concerned with Annual Meeting. the growing legislative activity in environmental areas. JAMES JIMDERSON Senator Conrad Burns, center, reviews NAW's 1989 Annual Report, hot off the press, with Jim Ander- son, left, NAW Senior Director-Government Relations, and Don Carlson, right, NAW Chairman of the Board and President of Carlson Systems, Inc. 8 A skilled politician can put on quite a show. That's exactly what Newt Gingrich (R-GA), the House Republi- can Whip, gave wholesaler- distributors at the NAW Annual Meeting. Gingrich laid out a mission to empower the American people to change laws and the current bureaucracy to make an ailing system work to rethink our old approaches to education, health care, and other programs. Wholesaler-distributors certainly got an inspirational message from the Republi- cans' "lightning rod" in the House of Representatives. Later in the year, Gingrich launched a spirited debate House Republican Whip Newt Gingrich (GA) within Republican circles over the "soul" of the party by included higher taxes. The Senator Pete Domenici (R- refusing to back the budget dust from that whirlwind has NM), the Ranking Republican compromise package that yet to settle! on the Senate Budget Commit- tee, gave wholesaler-distribu- tors a pessimistic (and unfortu- nately accurate) analysis of the emerging budget negotiations. Domenici predicted that little real progress on the budget would be achieved without an increased Republi- can presence in the Congress. Senator Pete Domenici (R-NM) 9 he federal govern- Coalitions: NAW works publications and through its ment. What it does Washington Action Network GOVERNMENT RELATIONS T with more than 30 legislative for you, or to you, can and regulatory coalitions, (a cooperative venture be- have a large impact usually in a leadership tween NAW and more than on your bottom line. capacity. Coalitions help 100 member associations NAW's primary mission is prevent "divide and conquer" listing wholesaler-distributors to ensure that the federal tactics from being used to who know Members of Con- legislative, executive, and implement anti-business gress personally). judicial branches of govern- legislative and regulatory Media Relations: NAW ment give wholesale distribu- initiatives. produces a wealth of materials tion the consideration its Grassroots Action: NAW's for the general media and the economic importance war- effectiveness is largely trade press. Key legislative rants. We accomplish this in a dependent upon the willing- and regulatory issues often are number of ways. ness of wholesaler-distributors decided by the way they are Washington Advocacy: to write letters, make phone reported and the way NAW regularly works with calls, send telegrams, and policymakers and the public Members of Congress and the meet face-to-face with Mem- respond. NAW works to Executive Branch to discuss bers of Congress. NAW establish a reputation as a key issues. We also submit advises wholesaler-distribu- reliable source of information position papers and congres- tors on when and where to on business issues. sional and regulatory testi- make their views known most mony. effectively through its many Some of NAW's most important work consists of meeting with policymakers and helping establish an agenda. Shown here, meeting in the office of the Vice President of the United States, are (left to right), Dirk Van Dongen, NAW President; Vice President Quayle; Alan Kranowitz, NAW Senior Vice Presi- dent-Government Relations; and Jim Anderson, NAW Senior Director-Government Relations. 10 In 1990, it became a lot easier to keep a family business in the family. Congress passed and the President signed into law a repeal of Section 2036(c) of the Internal Revenue Code. The "estate tax freeze" was thereby reinstated. This issue is a classic example of industry govern- ment relations. The Internal Revenue Service had at- tempted to get rid of estate freezes through administra- tive action. It was rebuffed in the courts. The IRS then persuaded congressional tax writers to effectively ban the estate freeze by inserting Rep. Raymond McGrath (R-NY), left, a member of the House Ways provisions at the 11th hour in and Means Committee, talks with NAW Board Chairman Don a tax bill-without hearings. Carlson just after the NAW official's testimony on the estate freeze. Reinstating the freeze then Carlson, whose brother, son, two nephews, and daughter and son- faced an immense obstacle: in-law all are in the family business, imparted a personal perspec- tive to this issue. Estate freezes lose revenue, which violates budget guide- lines. businesses, helped lead the helped turn out the grass The wholesale distribution charge. NAW met with roots. In October, 1990, three industry, which is heavily government officials, testified solid years of work culminated populated with family-owned at congressional hearings, and in repeal. P.B.&S. CHEMICAL COMPANY. INC. NAW chalked up a victory in 1990 that will help family-owned over 40 businesses stay in Letters from home like the one from Ray Preston, Presi- the family. dent, P.B.& S. Chemical Company, Inc.-helped persuade Congress to repeal 2036(c). 11 GOVERNMENT RELATIONS President Bush meets with representatives of the business community to plot strategy for sustaining his veto of mandated leave. Seated at his right is Mary Tavenner, NAW Senior Director-Government Relations. egislation requiring their workers passed the Representatives. In fact, L employers to offer Congress in 1990. President despite extraordinary pressure mandated family and Bush vetoed it. His veto was by the unions, not one single medical leave to sustained in the House of Representative who earlier voted against the measure "turned" and voted to override The veto fight over the President. This was a big victory for NAW. The association serves mandated leave became a as Executive Secretariat of the Concerned Alliance of test of strength between Responsible Employers, the leading business group opposing the measure. business and labor. Labor Defeating mandated benefit proposals is one of the industry's top legislative lost. As a result, many priorities. Mandated benefits are undesirable for the economy labor-backed initiatives because they introduce rigidity and inefficiency into were shelved in the 101st the labor markets. They are a potential political disaster for the country because they offer Congress. a way to move federal "ben- efit" programs off-budget. 12 The 1990 budget summit budget deficit-ever-increas- ADA was another proverbial between the White House and ing federal spending for steamroller coming down the congressional leaders was a entitlement programs. legislative pike, with few fiasco. Little was done to cut A number of other NAW- opportunities for improve- spending. Taxes were raised. opposed items made their way ment. The political damage was into the budget package (a As a result, the ADA is even worse. A decade-long continuing problem with extremely vague. No one debate about federal over- "omnibus" budget legislation). really knows yet how the law spending was transformed into Congress raised the Pension is going to work and it could one about whether the rich Benefit Guaranty Corporation spawn a considerable amount paid their fair share. premiums that employers pay of litigation-a major prob- NAW strongly opposed the when they have single- lem for wholesaler-distribu- final budget package. Higher employer defined benefit tors and other employers. tax rates will distort economic pension plans. And a new, NAW will be closely watch- decisions. The phaseout of higher, variable excise tax was ing the Equal Employment personal exemptions and established for employers Opportunity Commission and reductions in itemized deduc- recouping excess assets from the Justice Department for tions are so complicated that defined benefit pension plan their implementing regula- they probably will be short- terminations. tions. lived. Also in 1990, Congress NAW and the wholesale and the President rushed to distribution industry face a enact a new law to help the difficult year in 1991. The disabled-the Americans nation's political leadership With Disabilities Act (ADA). does not appear willing to Certainly helping the disabled address the root cause of the was a noble objective. But the Don Carlson, NAW Chairman of the Board and President of Carlson Systems, Inc., testifies before the House Ways and Means Committee. His message: Don't raise tax rates. 13 AW devoted great N energy in 1990 to NAW helped defeat defeating a so-called civil rights bill. It would have allowed current or legislation that would former employees to use statistical imbalances in an employer's workforce to create have spawned costly a legal presumption of dis- crimination. "Guilty by reason of litigation and transferred statistics" would have been the verdict even if an em- huge sums from ployer did not intend to discriminate and even if an employer's practices had no wholesaler-distributors discriminatory effect. The result would have been a huge amount of costly litigation- and other businesses to and hiring and promotion quotas. President Bush showed trial lawyers. great political courage in vetoing it just before an election. SHADRIN President Bush's veto of so-called civil rights legislation was upheld by a single vote. The election to the Senate of Rep. Larry Craig (R-ID), a long-time legislative ally, will certainly help in 1991. Shown here meeting in Craig's Capitol Hill office are NAW's Jim Anderson, Senior Director-Government Relations; Alan Kranowitz, Senior Vice President-Government Relations; Mary Tavenner, Senior Director-Government Relations-and Rep. (now Sen.) Craig. 14 Getting together for a Capitol Hill strategy session are Senator Rockefeller (left) and Jim Anderson, NAW Senior Director- Government Relations. Once again, the political again, focus attention on this attorneys pursuing "deep muscle of the trial lawyers problem. pocket" legal theories-suing prevented Congress from NAW has developed, with wholesaler-distributors, not enacting product liability key lawmakers, a "product because they have done reform. NAW, however, seller's" provision that would something wrong, but because which serves as Executive essentially base the liability they have resources. Secretariat of The Product of wholesaler-distributors on Liability Alliance, believes fault. Most of the product there were some important liability claims made against advances in this long-haul industry firms are the result of struggle. President Bush made product liability reform an administration priority in his 1990 State of the Union Address and Vice Presi- dent Quayle assembled a cabinet-level council which pushed the measure. More- over, a prominent Democrat on the Senate Commerce Committee, Jay Rockefeller (WV), began toiling in the trenches to line up support on his side of the aisle. Vice President Quayle, left, presides over a White House meeting Liability insurance with the business community to discuss product liability reform. markets appear to be tighten- Jim Anderson, NAW Senior Director-Government Relations, is at ing up, which should, once the far right. 15 t was an exceptionally the practice of suppliers distributors could be subject RELATIONS I busy year for NAW on offering a lower price to to triple damages under the the legal front. wholesaler-distributors. The antitrust laws for carrying out The U.S. Supreme lower courts-and, incred- their primary economic Court, in Hasbrouck v. Texaco ibly, 35 state attorneys function. (closely following an amicus general-had taken the Also, the Georgia Court of brief filed by NAW), upheld position that wholesaler- Appeals-in the Mayer Electric case-followed an NAW amicus brief and For the first time, the revived Georgia's Mechanic's Lien Act (which protects a wide range of distributors U.S. Supreme Court supplying the building trades). And NAW filed an amicus acknowledged the brief with the Supreme Court in the Pacific Mutual case arguing that a $1,037,500 important economic role punitive damage award for an employee who suffered $2,500 in actual damages violated an of our industry. employer's constitutional rights. The U.S. Supreme Court IN THE Finally, at Supreme Court of the United States year's end, MOTION FOR LEAVE TO FILE NAW filed an BRIEF AMICUS CURIAE AND amicus brief BRIEF OF NATIONAL ASSOCIATION OF WHOLESALER-DISTRIBUTORS in the Cooper IN SUPPORT OF PETITIONER Electric case, LOUIS R. MARCHESE disputing a NEIL J. KUENN federal 20 North Wacker Drive Chicago, IL 60606 District Court July 31, 1989 Attorneys for National Association ruling that of Wholesaler-Distributors inside sales men and women in the wholesale distribution indus- try are no different than sales clerks in the retail industry- and thus are subject to overtime requirements under and the Fair Labor Standards Act. The Cooper Electric ruling exposes wholesaler-distribu- tors to large back pay claims and potential civil fines. 16 The U.S. Supreme Court, in the Maislin case, reluc- ERTS tantly granted the trustees of bankrupt trucking firms the right to collect additional money from many shippers ME CARE who already have paid their OCKVILLE, MD. freight bills in full. The high court called upon Congress to fix the statute. 0 YGE Unfortunately, a legislative remedy was sidetracked by some old-fashioned arm- 2 twisting by the Teamsters Union. NAW plans a renewed legislative effort in the 102nd Congress. In another transportation Bob Roberts, the President of Roberts Oxygen Co., Inc., Rockville, issue, NAW helped secure an Maryland, an NAW Direct Member, poses next to one of his trucks. important change in the Clean Fleet operators like Roberts Oxygen come under the Clean Air Act Air Act amendments. Whole- provisions. saler-distributors with com- mercial fleets will not be required to convert to clean- in solving problems. But, NAW routinely issues fuel vehicles when manufac- oftentimes, NAW is left with information bulletins, trade turers do not offer them, as the mission of explaining to press articles, and regulatory required under the initial wholesaler-distributors compliance packages to help House-passed version. regulations that are convo- wholesaler-distributors with Instead, the law estab- luted, complex, and of little their regulatory obligations. lishes a "pollution credit" benefit. program, under which fleet operators who are under their N.A.W pollution standards can sell November 1990 INFORMATION BULLETIN OSHA credits to operators who are SUMMARY OF NEW DOT EMERGENCY RESPONSE COMMUNICATION ANDARDS (HM-126C) over. HAZARD New U.S. Department of Transportation (DOT) emergency response information governing the transportation materials (commonly referred Regulatory Compliance: HM will into effect December 31. 1990. The purpose the new which are DOT Hazardous Materials (HMR) "improve the emergency response information HMR in order enhance pertaining safe handling hazardous materials involved incidents Fed. 1989. One of NAW's most impor- Reg. COMMUNICATION Nothing in HM 126C serves to expand the scope of the HMR; rather HM 126C imposes the additional on wholesaler distributors and others in the currently regulated community: tant, and least understood identification of hazardous materials on shipping papers by technical name: STANDARD hour emergency response telephone number on shipping papers: and functions, is dealing with the placeme emergency response information on vehicles and facilities where materials are loaded. stored or handled during any phase of transportation federal regulatory bureau- 1. USE OF TECHNICAL NAMES HM 126C defines name" recognized chemical currently used scientific and handbooks journals, and texts may not used cracy. For (not specified) names listed new regulation technical name appear parentheses association with the proper name hazardous The popular notion that material being shipped is a mixture solution materials, shippers must the shipping paper, by their technical names, the components most contributing the product's hazards A Proper shipping names which this applies are Complete the regulatory system largely Acid, liquid, "How-To" Alcohol Alkaline has a mind of its own, and Cement. adhesive, Kit Combustible liquid, n.o.s. Compressed gas, Corrosive liquid, n.o.s. often is unresponsive even to Published by: the National Association of Wholesaler Distributors NATIONAL ASSOCIATION 1725 Street NW 700 Washington PLE the President, has a great deal of validity. NAW does submit NAW helped wholesaler- NAW's model compliance testimony and provide exper- distributors understand their program for OSHA's HCS has tise to regulatory agencies to obligations under new Depart- helped many wholesaler- help in drafting regulations. ment of Transportation regula- distributors meet their legal And it does go to Congress tions governing the shipment of obligations under a very and the White House to help hazardous materials. complex law. 17 ost political action WDPAC M committees funnel their support- almost exclu- sively-to those who are in power. NAW's Wholesaler- Distributor Political Action Committee (WDPAC) is different. It devotes a signifi- cant portion of its resources to changing the composition of Congress. The goal: A Con- gress and an executive branch that better understand that greater profits translate into bigger paychecks for the nation's workers and their Jim Anderson, NAW Senior Director-Government Relations, families. congratulates Rep. Hank Brown (R-CO) on his receiving WDPAC supports candi- WDPAC's endorsement for Senate. Brown won and is now the dates on a nonpartisan basis. junior Senator from Colorado. The WDPAC Board of Directors The 1990 elections, authorizes contributions and support of candidates. The Board is unfortunately, were indeci- composed of three wholesaler-distributor Chief Executive Officers, sive. The Republicans three industry association executives, and two NAW senior execu- tives. continue to hold the executive branch. The Democrats have increased their grip on up safe House seats and But, in our view, whatever Congress a little bit. The challenge incumbent Sena- chances they might have had President still appears to have tors. Almost all of them had simply disappeared with the sufficient support to uphold adopted as their theme "Cut confusion over the handling of his vetoes. spending and don't raise the budget summit. This was, however, a taxes." That was music to disappointment. NAW's ears. WDPAC en- The Republican party dorsed every one of them. leadership persuaded a Given the powers of number of veteran pro- incumbency, not all of these business Congressmen to give challengers would have won. NAW, through WDPAC, seeks to elect federal officials who understand WDPAC Chairman of the Board is George Seeds, Presi- and support our free dent of Findley Welding Supply, Youngstown, Ohio. market economy. 18 It has been said that Democracy is the worst form of government, except for all the others. So, too, our system of raising funds for political candidates has been roundly criticized-with many far worse systems (for example, taxpayer financing) waiting in the wings. WDPAC raises money for its political agenda through a Political Action Fund (PAF) and a Corporate Political Education Fund (CPEF). PAF funds are voluntary WDPAC Grand Prize Winner for the mid-year raffle is George personal contributions from Finley, President, C.C. Distributors Inc., Corpus Christi, Texas. industry executives. They are "Now, more than ever," says Finley "the wholesale distribution donated 100 cents-on-the- industry needs a strong and effective political action effort." dollar to candidates for wholesale distribution firms. endorsement letters to local federal office. They are used to mount voter wholesaler-distributors; and CPEF funds are tax- registration and get-out-the- defray WDPAC's fundraising deductible contributions from vote drives; send candidate expenses. W Everyone's a winner when they participate in the WDPAC raffle at NAW's Annual Meeting. Left to right are Jimmy Taylor, NAW First Vice Chairman and President of Taylor Parts & Supply Co; Gary Armstrong, President of General Air Service & Supply; Greg Gregory, Vice President of Suncoast Roofers Supply; Bob Larsen, President of the Insurance Administration Center; and Jay Church, NAW Chairman-Elect and President of Cordage Papers, Inc. Mr. Gregory was the Grand Prize Raffle winner and Mr. Armstrong was the winner of the Bonus Raffle. 19 DREF AW conducts a wide- & Management Information N ranging series of research and educa- tion activities. These are designed to provide wholesale distribution executives with the knowledge they need to remain highly profitable. And they are designed to provide public information about wholesale distribution to improve the business environment in which the industry functions. A good place to start is NAW's Distribution Research & Education Foundation (DREF). DREF carries out long- DREF's Chairman of the Board is Jerry Rosenstone, Office of the range research on basic Chairman, Continental Glass and Plastic Company, Chicago, issues, where wholesaler- Illinois. distributors in many different commodity lines have a common interest. In baseball, you've got to "hit 'em where they ain't." In wholesale distribution sales, you've got to "hit 'em where they are." Technology can do wonders in that area. Shown here, at Arthur Andersen Consulting's Logistics 2000 exhibit in Atlanta, is a color-coded system that allows inside sales representatives to quickly focus their efforts on the most profitable line-items and accounts. 20 Technology in a distribu- tion environment there is probably no single business issue that generates more interest among-and inquiries THE from-NAW's membership. TECHNOLOGY MAZE The sheer pace of technologi- IN WHOLESALE DISTRIBUTION cal change has become a staggering challenge. In August, 1990, DREF C H 0 0 S N G convened a Distributor of the Future Technology Conference T in Atlanta. More than 100 H E wholesale distribution lead- ers-representing more than R I G H T A three dozen industry commod- P ity lines-got a glimpse of A T high-tech wholesale distribu- H tion in the 1990s. N.A.W The conference was put ARTHUR DREF together in conjunction with ANDERSEN DISTRIBUTION RESEARCH ARTHUR ANDERSEN CO.S.C. & EDUCATION FOUNDATION Arthur Andersen & Co., the international accounting and consulting firm. It also included a tour of Andersen Consulting's Logistics 2000 facility-a model distribution Knowledge. It's the key company that integrates leading-edge technology. Conference participants to running a successful got an advance-briefing on the results of DREF's new report wholesale distribution The Technology Maze in Wholesale Distribution: Choosing the Right Path. That study provides business. Educating practical answers to such questions as, "What technol- bankers, suppliers, ogy should I adopt?" "How much should I spend?" "How should I proceed to public policy officials train my staff on the new systems?" and "When will and others about it pay for itself?" DREF's research indicates that technology is one of the wholesale distribution crucial determinants of success or failure of wholesale distribution firms in the also is a critical 1990s. NAWIDREF function. 21 DREF AND BAR CODING THE & Management Information Lower Costs How To and Increase Customer Service INTRODUCTORY MEETING &PLAN 71709 49042 GENERAL Leaser III ANOX ar Coding: Whole- Bar coding is a technology needed-and costly. B saler-distributors can tailor-made for wholesale Furthermore, companies- significantly improve distribution. The error rate for like products and people- their productivity by scanning is approximately one have a life cycle. Different using bar codes. In addition to in three million. The error rate types of financing tend to be the obvious inventory tracking for data entry via keypunching appropriate at different stages. applications, bar codes can be is approximately one in three The best wholesaler-distribu- used in a variety of "front hundred keystrokes. tors look beyond today's or office" activities. Bar Coding is another in tomorrow S operating require- The benefits of bar coding DREF's series of studies on ments to develop a whole-life are so great that NAW's the use of technology to financing strategy. Distribution Research & improve industry productivity To meet these needs, Education Foundation and profits. DREF and the consulting firm (DREF), in 1990, published Financing: The 1990s are of Deloitte & Touche have Bar Coding and the Whole- bringing even greater chal- conducted one of the most saler-Distributor: How To lenges to wholesaler-distribu- comprehensive financial Lower Costs and Increase tors. Competition is steeper. studies in industry history, Customer Service. Technology is even more Financing Wholesale Distribu- 99 tion in the 1990s. The book summarizes the industry's common financing experi- ences and presents the advantages and disadvantages of nearly two-dozen separate financing sources. Financing Wholesale Distribution Wholesale Executive Management Course: NAW and The Ohio State Distribution University School of Business offer a one-week training the in 1990s course in the essential ele- ments of wholesale distribu- tion. It is an intensive review of marketing, finance, and human relations-targeted at wholesaler-distributors' Deloitte & N.A.W particular concerns. Touche DREF The course also offers participants a rare opportu- nity-a chance to compare business practices with other improve their profitability. the nation's undergraduate wholesaler-distributors who In 1991, the course will be and graduate programs, are not competitors. held June 9-14. Special DREF, in 1990, worked with The professors at The Ohio emphasis is being placed on Professor Adel I. El-Ansary of State University School of management techniques the University of North Florida Business probably have more suitable for operating in a College of Business Adminis- expertise in wholesale distri- tough economic environment. tration. bution than any other univer- Model Wholesaling Course: Dr. El-Ansary has devel- sity. They've helped hundreds To help improve the standing oped a model curriculum, of wholesaler-distributors of wholesale distribution in "Wholesaling: Structure, Strategy, and Management," That course, now a part of the UNF curriculum, is being made available to other colleges and universities. DREF also is underwriting a student internship at the University of North Florida. Industry Data: NAW continues to provide the nation's news media with an analysis of the Producer Price Index. And NAW, in conjune- tion with Arthur Andersen & Co., continues to issue the Wholesale Distribution Industry Confidence Index-a University of North Florida Professor Adel El-Ansary congratu- quarterly gauge of industry lates Grady Heiss, a junior marketing major, who was selected to business conditions. receive DREF's new wholesale distribution internship. 23 SERVICE AW-CIGNA Property/ selected states) presented an Program has intensified its CORPORATION N Liability Insurance irritant to member firms. effort to become the primary Program: The NAW- In the fourth quarter, writer of property/liability/ CIGNA partnership, though, the traded securities auto/workers' compensation now in its ninth year, has of the major property/liability for firms engaged in whole- consistently delivered out- insurers were flirting with 52- sale distribution. The recently standing coverage at a week lows. This would formed Wholesalers Insur- competitive price in the suggest that the "soft market" ance Group (WIG) operates highly cyclical insurance will, in all likelihood, con- as a CIGNA "company within industry. NAW is CIGNA's tinue into 1991. a company" with dedicated single largest customer- While this is good news underwriting, marketing, loss generating more than $90 for member firms, it does control, and claims servicing million in annual premiums. raise some serious questions capabilities. In 1990, intense price regarding the future financial For the seventh consecu- competition in the property/ viability of those underwriters tive year, insured firms will casualty marketplace kept who continue to extend their receive a return of premium business insurance protection market share at inadequate in the form of a significant broadly available and "afford- prices. dividend totalling able." It seems that only CIGNA, the underwriter of $4,863,000. This brings workers' compensation (in the NAW Property/Liability aggregate dividends on the NAW-CIGNA Program to more than $21 million in the last four years. Over the past twelve months, the NAW-CIGNA program has expanded both in terms of written premium, and, most importantly, number of insured firms. Given the complexity of the CIGNA reorganization and intense price competition in the marketplace, this achievement is remarkable. "Last year,' says Ray Gross (seated), President, Transply Inc., "we received a $2,214 dividend under the NAW-CIGNA liability program. That's more than twice our annual membership dues." "But that's not all," notes Ray's brother Dean (standing), who serves as Vice President of the Dillsburg, Pennsylvania firm. "The NAW program gives us additional protection if we have a claim." 24 In politics, there is strength in numbers. That also is the case in business services. NAW's Service Corporation uses the collec- tive muscle of 40,000 whole- saler-distributors to negotiate highly favorable terms and conditions with a variety of vendors. NAW-New York Life Insurance Company Life/ Health/Dental/Disability Insurance Program: Employee group health insurance continues as the number one In 1990, George Valiga joined NAW as Vice President and insurance irritant facing most General Manager of the NAW Service Corporation. wholesaler-distributors Restricted benefits, limited availability, and constantly NAW-Hertz Car Rentals: service-including Hertz # 1 increasing costs have pushed The program continues to Gold Club, Computerized the traditional "indemnity" provide superior price and Driving Directions, Cellular group health insurance quality. Phones, and more-the coverage beyond the availabil- By combining special NAW-Hertz Program has re- ity of many firms, their nationwide discounted rental mained very popular. employees, and dependents. rates and a high level of NAW has embarked on an extensive survey of member firms in order to establish a clearer picture of the health NAW uses the economic insurance options being selected by member firms in various parts of the country. power of 40,000 wholesale From the early survey results, a picture is emerging which distribution firms to confirms that an increasing percentage of wholesaler- distributors have moved away negotiate highly favorable from traditional group health insurance towards the so- called "managed care" terms and conditions for programs (i.e. HMO, PPO, "triple-option," etc.). Others business services. One are using "self insurance." NAW is currently meeting with selected insurance companies to determine their clear benefit: Broadly interest in developing a health insurance program which written, competitively encompasses these options. priced insurance. 25 SERVICE digital Fiber Optic Network have turned the NAW CORPORATION Program into US Sprint's largest association customer, generating annualized volume in excess of $1.5 million in 1990. That is a notable achieve- ment for a program in its first full year of operation. NAW-Meridian One FAX Program: Wholesaler- distributors (and, indeed, their customers) can use the NAW program to purchase FAX machines from several manufacturers in both portable and full-size models. Meridian One offers machines with a tremendous array of features and options at pricing that is quite attrac- tive. NAW-Emery Worldwide Overnight Delivery Program: When is it good news when a George Williams, President of Williams Equipment Co., Inc.-a shipper's dropped something? fluid power distributor headquartered in Olathe, Kansas-has When it's his prices. been quite pleased with the NAW-US Sprint program. "My staff With strong competition has experienced three clear benefits from the service," says in air courier and air freight Williams. "We've consolidated billing for our three locations. And express delivery, NAW and that's a real time-saver for our accounts payable people. We've Emery were able to deliver found the Travel Card to be easier to use. This view has been excellent prices to whole- unanimous among our outside sales group. And our monthly bills saler-distributors in 1990- have dropped about 5%. That's an excellent advantage to any as well as first-rate service. company." The NAW-Emery Program offers discounts on Emery's regular overnight delivery AW-US Sprint discounts on intrastate rates of up to 30% , on any N Long-Distance as well as interstate Dial 1 size or any weight shipment, Telephone Program: and Dial I WATS service. with no minimum usage Wholesaler-distribu- Toll Free 800 service requirement. In addition, the tors in the NAW-US Sprint at an extra 5% off US Sprint's Program was extended in Program-to borrow a daytime rates. 1990 to include all shipments phrase-could reach out and and international calling that are made within Canada, touch a few more people in to every dial-direct country at or between Canada and the 1990 than they could in 1989. a 10% discount. United States, with savings of And they didn't have to touch The superior features of up to 25% off Emery's list the bank account quite as the NAW-US Sprint Program prices. often, either. US Sprint's high-level of Emery also is one of the Among the new services service and the remarkable few carriers willing to handle were: quality of US Sprint's 100% cargoes considered hazardous 26 under U.S. shipping regula- NAW's VISA Gold Credit tions. Card Program, offered in For wholesaler-distributors conjunction with First Ameri- with higher volume accounts can Bank of Virginia, pro- (those with $500 or more per vides wholesaler-distributors month in total shipping with a superior personal activity with Emery), the credit card. Some of the NAW-Emery Program offers special features include a additional discounts over and minimum credit line of above the standard NAW $5,000; a guaranteed finance rates. charge on unpaid balances of As a result, the NAW- 5.5% above the prime rate, Emery Program experienced with a minimum of 14% and a strong growth in 1990-the maximum of 18%; a special, first full year of the program- first-year annual fee of $20.00 generating more than $1 for the principal cardholder; million in volume. and an array of travel ser- NAW VISA Gold Card: vices. C1B Customer service is the name of the game in wholesale distribution. That's just what Emery can help provide. At a recent NAW event, one of NAW's hardwood plywood distributors talked about a unique request his firm received-and fulfilled. An enormous walnut conference table was to be built for an international conference in Washington, DC. The conference was just days away! A walnut tree was located in the suburbs of the nation's capital. A logger was hired. The log was rushed by truck to a veneer manufacturer. The veneer was rushed by air to a Southern California cabinet shop. (No one local would touch the job!) The customer's table was shipped by air by Emery just in time for the prestigious event. 27 National Associations Industrial Distribution Associa- National Association of Flour MEMBER tion Distributors, Inc. ASSOCIATION Air-conditioning & Refrigeration Institutional & Service Textile National Association of Hose and Wholesalers Association Distributors Association, Inc. Accessories Distributors American Machine Tool Distribu- International Sanitary Supply National Association of Manufac- tors Association Association turing Opticians American Supply Association International Truck Parts National Association of Marine American Traffic Safety Services Association Services, Inc. Association, Inc. Irrigation Association National Association of Meat American Veterinary Distributors Purveyors Association Jewelry Industry National Association of Plastics Appliance Parts Distributors Distributors Association Distributors Association, Inc. National Association of Service Associated Equipment Distribu- Machinery Dealers National Merchandising tors Association National Association of Sporting Association of Steel Distributors Material Handling Equipment Goods Wholesalers Association of the Wall and Distributors Association National Association of Tobacco Ceiling Industries- Motorcycle Industry Council Distributors International Music Distributors Association National Association of Writing Automotive Service Industry Instrument Distributors Association National Appliance Parts National Beer Wholesalers Aviation Distributors & Manufac- Suppliers Association Association turers Association National Association of Aluminum National Building Material Distributors Distributors Association Bearing Specialists Association National Association of Chemical National Business Forms Beauty & Barber Supply Insti- Distributors Association tute, Inc. National Association of Container National Candy Wholesalers Bicycle Wholesale Distributors Distributors Association Association, Inc. National Association of Electrical National Commercial Refrigera- Biscuit & Cracker Distributors Distributors tion Sales Association Association National Association of Fire National Electronic Distributors Equipment Distributors Association Ceramic Tile Distributors National Association of Floor National Fastener Distributors Association Covering Distributors Association Copper & Brass Servicenter Association Council for Periodical Distribu- tors Association Council of Wholesale-Distributors National Kitchen & Bath Association Electrical-Electronics Material Distributors Association Farm Equipment Wholesalers Association Fire Suppression Systems Association Fluid Power Distributors Association, Inc. Food Industries Suppliers Association Food Marketing Institute Foodservice Equipment Distribu- tors Association General Merchandise Distributors Council Pausing for a break at one of NAW's semi-annual Association Health Industry Distributors Executives Council meetings are Sandy Hill, Chairman-Elect of Association the AEC, who serves as Managing Director of three NAW Member Hobby Industry Association of America Associations-the National Association of Chemical Distributors, the National Association of Hose and Accessories Distributors, and Independent Laboratory Distribu- the Independent Laboratory Distributors Association; Beate tors Association Halligan, Chairman of the AEC, and who serves as Executive Vice Independent Medical Distributors Association President of the Power Transmission Distributors Association; and Independent X-Ray Dealers Marv Schylling, Past Chairman of the AEC, and who serves as Association President of the National Association of Electrical Distributors. 28 National Food Distributors Textile Care Allied Trades Georgia Beer Wholesalers Association Association Association, Inc. National Frozen Food Association Greater Detroit Chamber of National Grocers Association United Products Formulators & Commerce Wholesaler- National Independent Poultry Distributors Association Distributor Association and Food Distributors Greater North Dakota Associa- Association Video Software Dealers Associa- tion/WAM Council National Industrial Glove tion Greater Washington Food Distributors Association Wholesalers National Insulation and Abate- Wallcovering Distributors ment Contractors Association Association Indiana Beverage Alliance National Lawn & Garden Water and Sewer Distributors of Distributors Association America Jobbers Credit Association National Locksmith Suppliers Wholesale Florists & Florist Association Suppliers of America Los Angeles Fasteners Association National Marine Distributors Wholesale Stationers' Association, Association Inc Michigan Association of Distribu- National Paint Distributors, Inc. Wine & Spirits Wholesalers of tors National Paper Trade Associa- America. Inc. Michigan Beer & Wine Wholesal tion, Inc. Woodworking Machinery ers Association National Printing Equipment and Distributors Association Michigan Distributors & Vendors Supply Association, Inc. Woodworking Machinery Mid-America Supply Association National Sash & Door Jobbers Importers Association Middle Atlantic Wholesalers Association Association National School Supply & Mississippi Malt Beverage Equipment Association Associate Associations Association National Solid Wastes Manage- Missouri Beer Wholesalers ment Association Advertising Specialty Institute Association National Spa and Pool Institute Alabama Wholesale Beer & Wine National Truck Equipment Association National Appliance Service Association American Society of Computer Association National Welding Supply Dealers National Association of Tobacco Association Associated Beer Distributors of & Confectioners National Wheel & Rim Associa- Illinois National Office Products Associa- tion Association of Biotechnology tion National Wholesale Druggists' Companies North Carolina Beer Wholesalers Association Association of Ingersoll-Rand Association National Wholesale Furniture Distributors North Carolina Wholesalers Association Association, Inc. National Wholesale Hardware Beer & Wine Association of Ohio New England Paper Merchandis- Association Beer Industry League of Louisi- ing Association Northamerican Heating & ana New England Wholesalers Airconditioning Wholesalers Beer Industry of Florida, Inc. Association Association Beer Wholesalers Association of New York State Beer Wholesalers North American Horticultural New Jersey Association Supply Association New York State Plumbing & North American Wholesale California Association of Tobacco Heating Wholesalers Lumber Association, Inc. & Candy Distributors California Association of Whole- Pacific Southwest Distributors Optical Laboratories Association salers-Distributors Association Outdoor Power Equipment California Beer & Wine Whole- Distributors Association salers Association Scaffold Industry Association Canadian Electrical Distributor South Carolina Beer Association Pet Industry Distributors Association Southern Wholesale Hardware Association Canadian Institute of Plumbing & Association Petroleum Equipment Institute Heating Southern Wholesalers Association Petroleum Marketers Association Canadian Wholesale Drug of America Association Western Association of Fastener Post Card Distributors Associa- Central Wholesalers Association Distributors tion of North America Chicago Metropolitan Distributors Western Suppliers Association Power Transmission Distributors Association Wholesale Beer Distributors of Association, Inc. Colorado Beer Distributors Arkansas Association, Inc. Wholesale Beer Distributors of Safety Equipment Distributors Computer Dealers & Lessors Texas Association, Inc. Association Wholesale Distributors Associa- Shoe Service Institute of America tion Specialty Tools & Fasteners Digital Dealers Association Wisconsin Wholesale Beer Distributors Association Distributors Association Steel Service Center Institute Electrical Apparatus Service Suspension Specialists Association Association 29 NAWINAW Service WDPAC Board of John F. Church, Jr. Directors LEADERSHIP STAFF Corporation Boards of Cordage Papers, Inc. Directors Cincinnati, Ohio Chairman Chairman George A. Seeds G.A. Taylor Fernley Donald Carlson Findley Welding Supply, Inc. Fernley & Fernley, Inc. Carlson Systems Youngstown, Ohio Philadelphia, Pennsylvania Omaha, Nebraska Gary L. Buffington Ernie Hodas Chairman Elect Southern Industrial Distribu- Century Supply Corp. John. F. Church, Jr. tors Association Madison Heights, Michigan Cordage Papers, Inc. Atlanta, Georgia Cincinnati, Ohio Bruce C. Lindsay John W. Nerlinger Brind Lindsay Co., Inc. First Vice Chairman Automotive Service Industry Philadelphia, Pennsylvania James M. Taylor, II Association Taylor Parts & Supply Co., Inc. Chicago, Illinois Toby Mack Andalusia, Alabama Associated Equipment Dis- Jerome Rosenstone tributors Second Vice Chairman Continental Glass & Plastic Oak Brook, Illinois Richard P. Turner Company Outdoor Sports Headquarters Chicago, Illinois President & Treasurer Dayton, Ohio Dirk Van Dongen James K. Risk, III Secretary Kirby Risk Supply Co., Inc. Executive Director George W. Sydnor, Jr. Lafayette, Indiana Ron Schreibman James McGraw, Inc. Richmond, Virginia Richard W. Tilton General Merchandise Distribu- Executive Staff Past Chairman tors Council Ernie Hodas Colorado Springs, Colorado James W. Allen Century Supply Corp. Senior Director-Membership Madison Heights, Michigan Executive Director and Secre- Marketing, NAW tary Chairman, Subcommittee on Alan M. Kranowitz James A. Anderson, Jr. Budget and Finance, and Trea- Senior Director-Government surer Treasurer Relations, NAW Victor Kanners Dirk Van Dongen Director-Field Operations, Cadillac Shoe Products WDPAC Southfield, Michigan DREF Board of Directors Patrick Burns Chairman of the Association Director-Information Systems, Executives Council Chairman NAW Service Corporation Beate Halligan Jerome Rosenstone Power Transmission Distribu- Chicago, Illinois Beth Rivera Cruz tors Association Vice President/Controller, Park Ridge, Illinois Vice Chairman NAW James D. Wilder Chairman-Elect of the Associa- Columbus, Ohio Carlton E. Farr tion Executives Council Vice President-Corporate Re- Sanford J. Hill Secretary lations, NAW National Association of Chemi- Louis Marchese cal Distributors Halfpenny, Hahn, Roche & Lewis Feldman Washington, D.C. Marchese Manager-Membership, NAW Chicago, Illinois Past Chairman of the Associa- Ann Franco tion Executives Council Robert S. Barrett Marketing Representative, Marvin Schylling Barrett Electrical Supply WDPAC National Association of Electri- Maryland Heights, Missouri cal Distributors Joyce Goldman Wilton, Connecticut John J. Buckley, Jr. Director-Administration, NAW National Paper Trade Associa- Manager-Internal Operations, tion, Inc. WDPAC Great Neck, New York 30 Laura Howard Executive Administrative Assis- tant to the President and Direc- tor of Meetings, NAW Philip Jaffa Director-Communications, NAW Alan Kranowitz Senior Vice President-Govern- ment Relations, NAW Executive Director and Secre- TRENIS tary, WDPAC Excellence Karen Lowenberg Manager-Sponsored Programs, NAW Service Corporation John Peter Director-Corporate Relations, NAW G. Bud Pope Manager-Membership, NAW Phil Jaffa, NAW Director-Communications, receives an award from Frank Martineau of Association Trends for NAW Report, William J. Robinson the association's newsletter. NAW also received awards for its Marketing Representative, WDPAC 1988 and 1989 Annual Reports, its 1990 convention materials, marketing materials for its Hertz car rental program, and for an Ron Schreibman editorial column. Vice President-Communica- tions, NAW Executive Director, DREF Elaine Shaw Manager-Membership, NAW In 1990, NAW's Mary Tavenner Senior Director-Government Relations, NAW communications programs Director-Campaign Research, WDPAC George Valiga picked up six national Vice President and General Manager, NAW Service Corporation awards from five different organizations. " 31 REVENUE SOURCE USE OF FUNDS Total $6,362,000 NAW $3,625,000 Includes dues, publications, seminars, annual meeting, coalitions SC $2,306,000 Includes insurance, vehicle, credit card, accounts receivable, overnight delivery, long distance, and other programs WDPAC $297,000 Includes Political Action Fund, Corporate Political Education Fund DREF $134,000 Includes contributions, publication royalties EXPENSE Total $6,362,000 NAW $3,872,000 Includes publications, seminars, annual meeting, coalitions, operations, provision for reserves SC $2,001,000 Includes insurance, vehicle, credit card, accounts receivable, overnight delivery, long distance, and other programs, operations, and provision for taxes WDPAC $325,000 Includes candidate contributions, operations DREF $164,000 Includes project grants, operations December 1, 1989-November 30, 1990 32 NAW SC The mission of the NAW Service Corporation is to sponsor industry- wide service and product offerings that benefit wholesaler-distributors. DREF The mission of NAW's Distribution Research & Education Foundation is to sponsor and disseminate research into strategic management issues affecting the wholesale distribution industry. DREF aims to help merchant wholesaler-distributors remain the most effective and efficient channel of distribution. TABLE OF CONTENTS Opening Message 1 Membership 2-5 Annual Meeting 6-9 Government Relations 10-17 Wholesaler-Distributor Political Action Committee 18-19 Distribution Research & Education Foundation, and Management Information 20-23 Service Corporation 24-27 Member Associations 28-29 Leadership & Staff 30-31 Source & Use of Funds 32 NAW 1725 K Street, N.W. Suite 710 Washington, D.C. 20006 202/872-0885 FAX: 202/785-0586