Getting Down to Business – The Best and Worst States for Door and Window CompaniesMay 19th, 2014 by DWM Magazine
It’s hard enough running a business. But in certain states, it may be even harder for door and window companies than others. Texas and Florida are number one and two, respectively, in terms of the best and worst states to do business, while New York and California round out numbers 49 and 50. This is according to surveys conducted with more than 500 CEOs across the U.S. and published in Chief Executive magazine. Recipients graded states on measures including tax and regulatory regime, the quality of the workforce and the quality of the living environment. DWM talked to door and window manufacturers in these best and worst states to find out if they agree with these recent findings.
GlassCraft president John Plummer, a door manufacturer based in Texas, agrees with his states ranking and points out some other positive facts about doing business in the Lone Star State. Texas has five cities in Forbes Top 25 Best Places for Business, and it regularly places its five largest cities in the top homebuilding lists. Labor costs are reasonable, Texas is a “right to work” state, and he adds that the recession was not as impactful here as in most other areas.
“This is not surprising at all to the business-owners who call Texas home,” he says. “Our state government provides a low-cost, pro-business regulatory environment. Almost weekly, another major company (most recently Toyota) announces a move or expansion in Texas.” He also mentions that Texas has been recognized as a national model for environmental regulation.
Florida came in at number two and Tom Riscili, president and CEO, CGI Windows & Doors says there are many elements that combine to make Florida such a wonderful place to do business.
“First, the people: whether you’re looking for someone to work the manufacturing floor, or someone to complete a strong management team, Florida attracts all different kinds of people, greatly increasing your chances of finding the perfect hire,” he says. “Secondly, quality of life. Solid quality of life is expected by employees. The tax structure in Florida, combined with the geography, weather, and a good educational system, all combine to create a quality of life second to none.”
Alabama came in at number 17 and this was the recent state of choice for profine who opened a plant in Hunstville recently (not far from Tennessee which incidentally is number three on the list). “We picked this area as we had an opportunity to find competitive land, there was also a good skill level and knowledge from local personnel available to us,” says Robert Thiroff, profine International. “Huntsville also provides us with an excellent rail and road infrastructure for us to distribute our products throughout the U.S. From a production perspective the pvc producers are located very close which makes for an excellent supply point of view, and another consideration is the stable electricity supply which is a very important consideration.”
The top 10 worst places (states 40-50) to do business were as follows:
40. Rhode Island
47. New Jersey
49. New York
DWM looked at the unemployment rates for the above states and four of the above states also came in in the bottom 10 in terms of the highest unemployment rates: Michigan, California, Illinois and Rhode Island. On a side note, what’s particularly interesting in terms of unemployment is the state of Nevada which came in at number eight on the best list but whose unemployment rate sits at 8.0 at number 50.
David Barnes, president at ViWinco, based in Morgantown, Pa., is surprised at his state’s bottom 10 ranking. “I don’t see challenges of doing business here,” he says. “I constantly get hit by states who want me to relocate. But we have a great workforce …. I am sure you can get cheaper taxes in other places. Because we were founded here I wouldn’t relocate my company based on taxes. This is what we live and breathe and where we grew up. A lot of manufacturers have left the area but I don’t have any intentions of leaving even if we are the worst.”
Massachusetts, four rungs lower on the ladder at number 46, can always be a challenge says Scott Channell, general manager, National Vinyl LLC, based in Chicopee, Mass. “From taxes to health care it is expensive,” he says. “However, regardless of how hard it can be, we are here and we make the best of our situation. We try to concentrate our efforts on what we can control such as how we service our customers and how we manufacture our windows and doors. By accepting this as our greatest responsibility we have been able to sustain growth consistency over the past four years.”
Peter Folsom, president of Panorama Windows in Bronx, N.Y., is also positive regarding his states number 49 ranking.
“Being in New York, and particularly New York City, there are probably more regulations than in most other parts of the country,” says Folsom. “That is probably because of the concentration of wealth. Wealthy populated areas that have been wealthy for a longer duration of time tend to develop rules and regulations to provide protection for and from the wealthy. This manifests itself in more stringent building codes, labor laws and societal rules and regulations (such as Landmarks Preservation restrictions). Being in a metropolitan environment increases the number of rules needed to abide by.”
But again, Folsom doesn’t let it bother him.
“Panorama Windows thinks of itself as being fortunate, however, to be in this environment because we focus on very high quality products and anticipating/creating ‘the next best thing.’ The myriad of rules such as those mandating sick pay, labor rights and rigorous Building Code and Landmark compliance helps to discourage cut-rate competition.”
As for California at number 50, Matt Power, CEO of LaCantina Doors in San Diego says simply, “It’s not that bad.” Yes he says tax increases are pretty hefty and federal and state taxes are one of the biggest burdens. But there are positives as well.
“We enjoy doing business here,” he says. “We enjoy access to a great labor pool. We want high caliber employees and high caliber employees like living in California and San Diego specifically. We find being a door and door and window manufacturer in Southern California is a good place to be especially for our products.”