Today’s report will begin with the press release from the National Federation of Independent Businesses (NFIB), which has some 300,000 members nationally, dwarfing all of the manufactured housing industry associations combined many times over. Indeed, there are about 4 member companies for every full time worker in the manufactured housing industry.
That scale translates into clout. Per NFIB sources to MHProNews, hundreds of manufactured housing industry firms are members of the NFIB.
That said, NFIB reports like the one below are a snapshot of the sentiment of all small businesses, without a breakdown of those in manufactured housing. It should be noted that NFIB played a role in the passage of the 2017 Tax Cuts and Jobs Act, which included the Opportunity Zones provisions. President Donald J. Trump has personally acknowledged the NFIB several times publicly. The 45th president addressed their annual meeting and has met with NFIB leaders. A similar phenomenon plays out at the state and local level, as the NFIB stays engaged in state and congressional issues too.
Following the NFIB release will be a MHProNews analysis and commentary on a recent shakeup at NFIB’s leadership, and what lessons that should hold for manufactured housing.
WASHINGTON, D.C. (Feb. 11, 2020) — The small business Optimism Index started the New Year in the top 10% of all readings in the 46-year history of the survey, rising 1.6 points to 104.3 in the month of January. Six of the 10 Index components improved, two declined, and two were unchanged, with the Uncertainty Index edging up slightly. Owners expecting better business conditions dipped slightly, but sales expectations and earnings trends improved significantly. As was reported last week, actual job creation surged in January.
“2020 is off to an explosive start for the small business economy, with owners expecting increased sales, earnings, and higher wages for employees,” said NFIB Chief Economist William Dunkelberg. “Small businesses continue to build on the solid foundation of supportive federal tax policies and a deregulatory environment that allows owners to put an increased focus on operating and growing their businesses.”
The net percent of owners expecting higher real sales volumes increased 7 points to 23 percent with owners a bit more certain of future sales growth prospects. A net 7% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, down 2 points from December.
The NFIB Uncertainty Index moved up 1 point from December to 81, but well below the spike to 86 seen in last January’s Index, following the government shutdown. A net 14% of owners expect better business conditions.
The frequency of reports of positive profit trends reversed half of December’s decline, increasing 5 points in January. Thirty-three percent of those reporting weaker profits blamed weak sales, 27 percent blamed usual seasonal change, and 8 percent cited labor costs, 6 percent cited materials costs, and 4 percent cited price changes. For those reporting higher profits, 61 percent credited sales volumes. 17 percent credited usual seasonal change.
As reported in last week’s NFIB’s monthly jobs report, new job creation jumped in January, with an average addition of 0.49 workers per firm, the highest level since March 2019. Twenty-six percent of owners reported finding qualified workers as their number one problem, 1 point below August’s record high. Fifty-six percent reported hiring or trying to hire (up 3 points), but 49 percent reported few or no “qualified” applicants for the positions they were trying to fill.
Historically high percentages of owners plan to raise worker compensation, as they seek to fill open positions. Seasonally adjusted, a net 36 percent reported raising compensation (up 7 points) and a net 24 percent plan to do so in the coming months, unchanged from December. Eight percent cited labor costs as their top problem.
“Finding qualified labor continues to eclipse taxes or regulations as a top business problem. Small business owners will likely continue offering improved compensation to attract and retain qualified workers in this highly competitive labor market,” Dunkelberg concluded. “Compensation levels will hold firm unless the economy weakens substantially as owners do not want to lose the workers that they already have.”
The net percent of owners raising average selling prices rose 1 point to a net 15 percent, seasonally adjusted, continuing a measured upward trend since September. Price hikes were most frequent in retail (24 percent higher, 6 percent lower) and wholesale (20 percent higher, 8 percent lower). Seasonally adjusted, a net 24 percent plan price hikes (up 4 points).
Note: while NFIB has numbers of low-viewer videos, this particular video above has over 1.2 million views.
MHProNews Analysis and Commentary
First, the economy overall and small business optimism are good. Businesses are growing and new small businesses are opening at an accelerated pace. All of which once more begs the question, why is manufactured housing struggling while the overall economy is doing so well?
Or why is it that some manufactured home plants – per reports by a public firm that is a Manufactured Housing Institute (MHI) member – are still idle or performing at only about 67 percent of their capacity? Why is it that only a handful of new production centers has opened in recent years out of the estimated 12,000 new factories that have opened during the Trump era?
But set all that aside for a few moments. Let’s look instead at a recent shakeup at NFIB to see what insights that might provide to manufactured housing professionals, investors and associations.
According to left-of-center Politico on 12.17.2019, “NFIB declined to comment on the circumstances behind [Juanita] Duggan’s departure [as the NFIB president], but the trade group has struggled with declining membership numbers in recent years. Dan Danner, Duggan’s predecessor, wrote in a Fox News op-ed a few months before Duggan was hired that NFIB boasted 350,000 members. In a statement announcing her departure, Duggan put NFIB’s membership at “almost 300,000.”
The same source said that “Duggan described her departure as “a mutual decision” made by her and the group’s board of directors…She described the split as “completely amicable.” “I think we’d both been thinking about this for a long time,” she said.”
Note that there is no mention of scandal or conflict of interest in the above.
Rather, the NFIB matter appears to be an issue of performance as measured by a decline in members. In fairness to Duggan, perhaps some former NFIB members felt that under the more pro-business Trump Administration, they didn’t have to be as worried about having their interests protected by a trade group as was true under prior regimes in Washington for the prior two decades. It is plausible that the split was “amicable” as described. Duggan enjoyed a solid career prior to NFIB. She reportedly has plans for a consulting operation that could open this spring.
By contrast, at the Manufactured Housing Institute (MHI), Richard “Dick” Jennison was the subject of years of problematic reports from the Arlington, VA trade group’s staff – particularly women – that complained about the difficult workplace environment. The response by MHI’s elected leadership about those concerns? ‘If staff doesn’t like it, they can leave.’ That seriously was what their then chairman Nathan Smith told MHProNews when the issues was raised.
Smith likely meant that, because numbers of MHI staffers did in fact come and go during the Jennison years.
More recently, Lesli Gooch, Ph.D., has taken over as CEO when Jennison’s troubled tenure ended. Shortly after taking over the helm, MHProNews received a package of information from an anonymous whistleblower that were all focused on CEO Gooch. In pursuing background on that package, an MHI source told MHProNews about being ‘aware’ of the concerns in the whistleblower documents. What has been MHI’s leadership’s position about those documents that are digitally signed by Lesli McCollum Gooch that point to significant conflicts of interest between manufactured housing interests and that of conventional housing focused operations?
Was Gooch disciplined, rebuked or dismissed? What is known with certainty is that CEO Gooch was treated to a trip for another video and photo opportunity with Tom Hodges – currently serving as MHI’s ‘elected’ Chairman – Kevin Clayton and HUD Secretary Ben Carson. Rephrased, that highly public visual of Gooch, Clayton and MHI leaders was a message that it is ‘business as normal’ at MHI. For whatever reasons, elected leadership is apparently looking the other way about the conflicts of interest, as the organization apparently postures and pretends there is nothing wrong.
To double down on that, just days ago, Tim Williams was reportedly nudged into defending Gooch via emails that were reportedly shared with dozens of manufactured housing state association leaders. Williams told MHProNews – in a defense of Gooch and here work that she was a “superb” leader. The best Williams had ever seen. Really? Why the hyperbole? Where is the performance as measured by enforcement of existing laws? or where is the performance as measured by loans on all – not just select – manufactured homes being originated by the GSEs as the Duty to Serve manufactured housing mandates? Are zoning barriers falling because MHI has successfully pressed under Gooch’s ‘leadership’ for a full and proper implementation of all aspects of the Manufactured Housing Improvement Act (MHIA) of 2000?
Everyone is entitled to their own opinions, but as Williams himself has said, people are not entitled to their own facts. While our analysis does include comments, those comments are grounded in objective evidence, hard data that cites sources, and accurate quotes – i.e.: in facts.
Initially, Williams said in an email that he would meet with our publisher L. A. “Tony” Kovach to publicly discuss and debate the performance of Lesli Gooch and MHI. But when pressed to set a time and place in the near term to have that discussion, and when asked to have MHI’s leaders from the Omaha-Knoxville-Arlington axis and their allies to join them on stage in a moderated discussion in front of a live audience of manufactured housing professionals, Williams went silent. MHI’s leaders, who per reports pushed Williams into those emails in the first place, apparently want nothing to do with a real defense in public. Why not? Perhaps because Tony Kovach urged that mainstream media and public officials be invited to attend the proposed event. That is not so different then former MHI executives like Rick Robinson or Dick Jennison ducking out on questions and answers in front of other industry professionals in recent years.
When now former General Counsel Robinson and an outside attorney were pressed on the topic of getting enhanced preemption for manufactured homes fully and properly enforced, instead of posturing at meetings where the federal preemption issue isn’t properly raised, what does Robinson do? He leaves MHI for a private gig. Fine.
“Unlike the NFIB – where there is accountability for performance and no public stench of corrupt behavior, conflicts of interests or favoritism – where is the similar call for performance and accountability at MHI? What OMHA’s Tim Williams and other episodes illustrate is that a basic principle of fairness and accountability are seemingly missing at the Manufactured Housing Institute,” said publisher L. A. “Tony” Kovach.
“All manufactured housing related initiatives at MHI should be able to meet simple tests of fairness and transparency. For example.
- Does the plan proposed by MHI leaders benefit all of the industry – including independents – or does it magically favor only a few big boy insiders?
- Are the good laws that already exist that were passed by joint efforts of MHI, the Manufactured Housing Association for Regulatory Reform [MHARR] and state associations being robustly pursued for enforcement? Or are those good laws being obscured and diverted in ways that once more benefit a few to the harm of the majority of state association members and MHI or other independents?
- Is there transparency and accountability at MHI? If not, why not?” – Kovach said.
Instead of photo ops and videos with high ranking officials, if MHI can’t get those same officials to fully and properly enforce existing laws, then why doesn’t MHI, and their affiliated state associations join MHARR and publicly press Congress for oversight hearings that use subpoena powers? That’s what our publisher has called for – formal investigations into what has gone wrong with laws that are not being enforced. Because even if no trade association was asking to have laws enforced, law enforcement is what public officials are supposed to do.
Returning to the opening points about NFIB’s small business confidence being at record levels, in stark contrast, numbers of manufactured housing retailers witnessed a decline during an affordable housing crisis. What impacts retailers and communities then impacts producers and suppliers. On its face, that’s an outrageous yet objective reality. See how that looks through the lens of data published by Cavco.
To go deeper on the related issues that are keeping manufactured housing underperforming during an affordable housing crisis, see the timely reports linked above or further below. That’s it for this report on manufactured housing “Industry News Tips and Views Pros Can Use“ © – MHVille’s runaway #1 news source, where “We Provide, You Decide.” © (News, fact-checks, analysis, and commentary.) Notice: all third party images or content are provided under fair use guidelines for media.
Submitted by Soheyla Kovach for MHProNews.com. Soheyla is a co-founder and managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com. Connect with us on LinkedIn here and here.
There is more than enough evidence that there is corruption, deceptive trade practices and other arguably illegal activities that are benefiting a few to the harm of the many. See the related articles below.
The bad news is that the opposition to ethical ‘white hat’ businesses, investors and other professionals have deep pockets and they are politically connected. But the good news is that Bernie Madoff could have once made that similar claim. Today, Madoff sits in a federal cell. It took persistence on the part of a few professionals with federal officials to finally topple Madoff’s multi-billion dollar empire.
David Dworkin, National Housing Conference, Compared and Contrasted with Lesli Gooch, Manufactured Housing Institute on Fannie Mae, Freddie Mac Proposed Modifications to FHFA on Duty to Serve Finance Plans