Panelists representing a broad cross-section of the area’s economic community participated in a panel discussion at the Corridor Business Journal’s Mid-Year Economic Review June 6 at the DoubleTree by Hilton in downtown Cedar Rapids. Participants included Lisa Barton, newly-named president and chief operating officer of Alliant Energy; Joe Ahmann, president of Ahmann Companies; Rod Lehnertz, […]
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Panelists representing a broad cross-section of the area’s economic community participated in a panel discussion at the Corridor Business Journal’s Mid-Year Economic Review June 6 at the DoubleTree by Hilton in downtown Cedar Rapids.
Participants included Lisa Barton, newly-named president and chief operating officer of Alliant Energy; Joe Ahmann, president of Ahmann Companies; Rod Lehnertz, senior vice president for finance and operations at the University of Iowa; Jeremy Wild, president of New Leader Manufacturing; and Pat McGrath, president of McGrath Automotive.
The panel was moderated by Jack Evans, chair of the Hall-Perrine Foundation.
Here, in lightly-edited form, are panelists’ responses to a variety of questions posed by Mr. Evans and audience members.
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Mr. Evans: Lisa, let’s start with you. During your career, you have been an advocate for responsible energy policy. Could you share your definition of responsible energy policy? Ms. Barton: I have had the privilege of serving this industry for the better part of 36 years, and it has been an industry that has, particularly over the past 20 to 25 years, been in an incredible state of transformation. I've had the opportunity to speak before Congress, FERC (the Federal Energy Regulatory Commission), and state commissions, all really trying to (determine) how we meet our energy needs, not just for today, but over the next 10, 20 or 30 years. The types of investments that need to be made by utilities across the country are really long-term investments. So when we talk about responsible energy policy, it's really making sure that we're balancing those short-term and long-term interests, and focused right now on clean, affordable, reliable and resilient energy. Now more than ever, our customers’ and communities’ expectations have changed. From the derecho not that long ago, we had devastating damage. So what you end up having to do as a utility is solve for that future. For Alliant Energy, that's very much focused on reliability, resiliency, undergrounding a number of lines, and taking advantage of the tremendous generation resources that we have here, particularly wind (and) solar.------
Mr. Evans: Joe, your firm designs residential and commercial properties around the country. What economic indicators are you see? Mr. Ahmann: I started in the residential design business in 1985, coming out of the farm crisis. The very first project I worked on was a home, I believe the budget was $350,000. That was the house of all houses. We've been through a lot of different economic ups and downs (since then). To answer your question, I'm going to go back to 2008 to 2009 and an indicator that we discovered after the fact that we missed then, and one we watch a lot harder today. We sell a stock plan. We design a plan, we sell it online, we sell it through catalogs. And that is the indicator that we really watch closely, because those plans are sold not only locally, they're sold nationally and internationally. Back in 2006, at the highest point, we were selling about 80 to 90 of those plans a month. In 2009 at the lowest, we were at 14. That happened very quickly, but we missed that piece. Our overall numbers were up, but looking back at it, it was like a big white flag. We started to notice in late fall of ‘22 those numbers started to drop for three or four months, but in January, we had a bounce back up. With low interest rates and existing homes, the housing market seems to be holding its own. It's actually going up slightly. The builder confidence level has been up five months in a row, which is good. And I think it's due to if you have a low interest rate, you're not selling your home. There's product that needs to be out there. They're building new homes. 33% of the listings right now are new construction, where the average from 2000 to 2019 was 4.7%. Will that continue? How will that work in the future? When people get used to the interest rates, I think that will change.------
Mr. Evans: Jeremy, two years ago, you were a panelist and announced an intention to expand to Brazil. How has that gone, and what do you expect in the future? Mr. Wild: Two years ago, I was on a plane the day after this meeting to go to our factory in Indaiatuba, Brazil, about an hour and a half outside Sao Paulo, to kick off what became our own manufacturing facility in the region. Before that, we’d used a contract manufacturer. Since then, it’s been a fantastic journey. I’ve worked with a person there that happened to live 30 minutes from our facility that was doing consulting work and chose to come work for us and help us get off the ground. We started from scratch. We flew our welders there to train them. For many of our welders, it was their first time on an airplane, so it was a great adventure for them. Another thing that happened was that we ended up 300% more than what we set up for our manufacturing facilities, so we had to pivot very quickly. What we thought might be a 10 to 12 person operation is now 30 people. We had a banner year last year, and it's all full bore this year. It's been a really good experience. I will say our employees down there are uniquely engaged. They love being part of New Leader Manufacturing. There are some synergies we've seen between both locations, and my expectation is in the future that our Brazil operations will be just as big, if not bigger, than our North American operations. There's a lot of potential there, and we're excited and bullish on the future.------
Mr. Evans: Pat, what are you seeing in terms of your workforce and how have you changed your employee compensation? Mr. McGrath: My daughter Jaymie, our CPO or chief people officer, has really brought us up to date. She brought a whole new perspective to our PTO and totally revamped that two years ago. Much more user-friendly for our employees, a lot more time, flexible work schedules. I've always been that you're here 8 to 5, or whatever your schedule is. She brought a lot more to that. The hardest position for us to hire is an automotive technician. We've got 160 of them, and they are really hard to find because the young men and women that used to consider working on cars went into the computer world. We went to a four-day work week with our technicians, because time is the new currency. People say that pay is big, but because we're retail and we work a lot of hours, that time we gave our people really changed. The other thing she brought to the table was that I was always really big on recruiting. How are we going to recruit more people, and maybe we can get better ones? Well, now every month we watch our data about what who we’re retaining? And with our leadership team, we ask who is a flight risk and why? Maybe they are not built to take time off. We had a gentleman when we took over Toyota that was bell to bell. We sat down and said, ‘you have daughters, you need to coach one of your daughters.’ He said ‘no, I can't do that,’ and we said ‘no, that’s one of your requirements. You have to coach your daughter.’ Jaymie really opened our eyes up to that, and now that's probably the biggest thing for us, that currency of time.------
Mr. Evans: Rod, building responsibilities are very diverse. What are you seeing in terms of the supply chain? Mr. Lehnertz: There are a lot of construction industry experts here who probably know better, but at the University of Iowa, we're seeing some regulation, or at least leveling off, with respect to some of the materials availability. There are still some very tough long-lead items in areas (such as) building systems and roofing systems for larger scale projects. The number three and number four largest copper and aluminum producers in the world happen to be Russia and Ukraine. So as they remain at war, those prices, which are present in almost all building systems we're doing, (are up). Then you look at electrical vehicle battery factories being built all over the country, and that's another draw on those same materials. Our bigger issue is man and woman power in the construction industry from a labor perspective. As K-12 programs received cuts in pay and in funding and had to cut programs, many shop programs over the years have been lost. And the number of contractors, especially in the subcontractor arena, the number of empty benches that are in labor rooms are killing us. We're still seeing very high bids with one, maybe two, bidders on a lot of projects, not because they're not interested in diverse projects but because there aren't people to build. And that is our largest concern, especially given the amount of work we have.
