Speech from Industrial Distribution Association president Jim Beckstein at the I.D.A. Annual Distributor and Manufacturer Business Expo in Chicago Nov. 22-24.

We are all fortunate to have participated in the most stable, fluid and productive free market in the history of the world.

And the key word here is free. For it is the free enterprise system that enables us as entrepreneurs to: grow our businesses, work in our communities, and to live happy and productive lives with our families.

There’s a lot of negative perception out there: about business, about the economy, about where things are headed. But there’s a big difference between being negative and being a realist.

Being a realist means recognizing we will never return to the levels of sales we enjoyed in 1999. Those days are gone forever!

But I believe that every one of us in this room is here today because we are realists. We have been through some very tough times and because of those tough times we’re finding new and productive ways to be successful in this new global marketplace.

I’d like to share with you today my perspective on where we are and what we need to do to be successful in the year ahead.

Many people talk about the past three years of the U.S. industrial economy as “The Perfect Storm.”

We have experienced:
• a complicated set of circumstances;
• the flight of manufacturing offshore;
• increased insurance and regulatory costs;
• increased pricing pressures and other competitive challenges; and,
• not to mention the threat of terrorism on our great free country.

After three years of stormy seas, these past few months have made it easier for realists like myself to be a little more optimistic. Let me share with you a few key economic facts.

The U.S. economy looks healthier every day. There’s evidence of slow and steady progress in this new world of ours. The economy has grown over an annual rate of 7 percent in the third quarter, the strongest pace in nearly two decades. Manufacturing was up again in September, for the fourth month in a row; it’s now at its highest level in four years. Productivity has climbed to an annual rate of 8 percent in the third quarter, the highest in over 10 years. Industry forecasts point to a 5 percent increase in 2004 in industrial and construction sales. The 2004 gross domestic product is expected to climb to 4 percent. Interest rates remain at historic lows, and inflation is under control.

But let’s be realistic!

No matter how you slice it, the employment numbers in U.S. manufacturing tell the story more vividly than any words I can come up with. More than 10 percent of all U.S. factory jobs have been lost since 1999. And they’re not coming back.

The reality is that more businesses are going off-shore. But this is not about one country; it’s not about China. We’re witnessing a fundamental shift in world trade and competition. And we have to change our vocabulary and our way of thinking about this issue. You can call it off-shore competition or foreign competition. The fact is it’s global competition, and it’s here to stay.

The companies that are going offshore answer to their stockholders? They’re making a business decision, and that’s the reality. Therefore, as distributors and manufacturers ,we have to redefine our value to our customers. We have to.

We provide an array of services that offer great value – services such as connecting product application and knowledge of the customer’s unique problems, as well as logistics and other essential functions.

And I wonder sometimes if that isn’t part of the difficulty we have in saying no to certain customers, saying no to certain suppliers? To finding the core areas of customers, products, services and suppliers to leverage our unique position in the supply channel. To profitably carve out our competitive position that we can defend and grow.

I’m delighted and honored to be serving as your I.D.A. president this year. And I’d like to share with you the challenge I give my co-workers at Mill Supplies when they attend these conventions. I ask them to come back and share with the rest of us how our company can gain $100,000 worth of new or extended business from what they learned, from their meetings with suppliers, other distributors or from the educational sessions.

If you aren’t looking at the profitability, and the return on your investment from all your activities, then I suggest that it’s time to do just that. I.D.A. has the tools and the resources to help you take your business further and to capitalize on all your assets and on the resurging economy.

Many of you know that I’m a pilot. I love to fly. One of the lessons you learn when piloting a plane is to stay ahead of the aircraft. That means that when you’re at 10,000 feet, you can’t pull over, take out the map or the manual, and figure out what to do next. You constantly have to think ahead and plan ahead.

I challenge all of us in this room to stay ahead of your aircraft – your business – to think ahead, and to take the next few days here in Chicago to plan how you’re going to build a successful 2004.

Thank you! May god bless you, and may God bless America.

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