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Old 10-05-2011, 04:39 PM   #1
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Lumber Liquidators it appears is doing their part to create new jobs in America and promote the future well being of American workers in the flooring industry.

Oh wait! My bad!!! Oh well here's the report anyway:

Lumber Liquidators has entered into an agreement to acquire certain assets of Sequoia Floorings relating to Sequoia’s quality control and assurance, product development and logistics operations in China.

In connection with the agreement, Lumber Liquidators expects to retain certain key Sequoia personnel in Shanghai, China and assume direct control of sourcing previously managed by Sequoia. The acquisition strengthens Lumber Liquidators’ mill direct relationships pursuant to its long-term sourcing strategy, and allows for a coordinated and efficient transition to direct servicing of mill relationships by an experienced team of quality and product development experts, the company said. Sequoia, a trading company, had provided product quality and development services on approximately 40% of the Company’s 2010 merchandise purchases, primarily those in Asia. As part of the transaction, the Company will be opening a representative office in Shanghai upon approval of its application to the Chinese government, expected to occur in October.

The acquisition agreement includes a cash outlay of approximately $5 million plus other consideration, such that the expected allocated purchase price is approximately $8 million. The Company anticipates acquisition-related expenses of approximately $0.6 million, or $0.01 per diluted share, in the third quarter of 2011. The acquisition is expected to be accretive to the business by the fourth quarter of 2011.

“One of the core components of Lumber Liquidators’ strategy and a key competitive differentiator has always been our ability to purchase products directly from mills, said Jeffrey W. Griffiths, ceo. “We are excited to launch the third phase of our sourcing initiatives with the significant expansion of direct sourcing in China. By entering into this transaction, we will be able to better control product cost and quality through our own international sourcing operations, further strengthen our value proposition and increase our competitive position. Additionally, we believe that this acquisition will allow us to expand operating margin, while at the same time provide greater flexibility in our marketing programs to help us attract consumers with aggressive opening price points. Most importantly, we look forward to working with our new Asian team and expanding our family of mills.”

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Old 10-05-2011, 05:51 PM   #2
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...sooooo.... the crappy stuff they sell now wasn't crappy enough?

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Old 10-05-2011, 06:22 PM   #3
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LL does the best they can with what they have. Reminds me of a used car lot full of caprices with a nice show room, lots of ad jingle, and pretty sales staff.
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Old 10-05-2011, 07:24 PM   #4
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I suspect the manufacturing equipment and systems were from the U.S. initially. China is not an exporter of wood, buy buys from the U.S., Canada and SE Asia, depending on the species. The bamboo may not be from China, but from SE Asia where anyone else can buy it.

The quality of the finished products depends on what the importer (not necessarily LL) to the U.S. determines as specifications and materials used.

the equipment id automated, so cheap labor is not a factor since it ends up being a management and sales situation, since many suppliers use various international manufacturing sources and control the properties of the products made.

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Old 10-05-2011, 07:27 PM   #5
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So then it is considered more "shovel-ready" work. Shovel...as in the shovel being used by China to bury us all.
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Old 10-05-2011, 08:19 PM   #6
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China is so short on wood that they are buying chopsticks from a factory in Americus, Ga.
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Old 10-05-2011, 09:58 PM   #7
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Also they got the good white birch ones from MN thanks to an older U.S. government business insensitive program.

China buys wood from Canada, the U.S. Russia and SE Asia to process on american technology equipent back to the U.S. - Maybe we should cut off all materials and technology sold to to China.

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Old 10-05-2011, 10:01 PM   #8
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Quote:
Maybe we should cut off all materials and technology sold to to China.
....or tax the piss out of it until we can catch up again.
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Old 10-05-2011, 10:16 PM   #9
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Bud -

You are a little late.

Taxes will increase the price in the U.S. and no raise it anywhere else in the world. They can still attract American investors/companies and buy equipment and technology or just go elsewhere. That would be a disaster.

Keep in mind China has a larger economy than the U.S., makes more cars (with no exports), has a larger auto market as the country digs out of the ruins and is growing fast because of the technology and natural resources. The age of the average Boeing aircraft is newer than the U.S. average.

A big hammer does not solve the problem.

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Old 10-07-2011, 01:31 PM   #10
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Quote:
Bud -
You are a little late.


Apparently not!

By JAMES R. HAGERTY

The U.S. government is preparing to decide whether to tack additional duties on wood flooring imported from China—yet another trade dispute between the countries.
But this battle has a domestic component, too, pitting American flooring distributors against one another, as manufacturer-owned companies seeking the duties face off with independent firms.
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Bloomberg News Duties on Chinese flooring could push up costs for homes like this one being built in Thornton, Colo., in July.



In October, eight U.S. makers of flooring filed a petition with the Commerce Department seeking duties on Chinese-made "multilayered" wood flooring, made from veneers. The U.S. market for such goods totaled about $736 million in 2009, based on the wholesale value of imports and shipments from U.S. producers.
These U.S. firms allege the Chinese flooring is subsidized by Beijing and dumped on the market at less than fair value. Dumping generally is defined as pricing exports below what is charged in the home market.
In December, the U.S. International Trade Commission found a "reasonable indication" that the American firms were being hurt by Chinese flooring that is subsidized or sold at less than fair value.
The U.S. Commerce Department is due to make preliminary decisions this month and in May on whether to put higher duties on the Chinese products—already subject to tariffs averaging 8%—and, if so, how much to increase them. Final decisions are likely in October or November, trade lawyers say.
The U.S. firms seeking the duties include Shaw Industries, a maker of carpet and other flooring based in Dalton, Ga., and owned by Berkshire Hathaway Inc., the investment company headed by Warren Buffett. A Shaw spokesman said the company aims to redress trade practices "where the company is unfairly disadvantaged."
Six of the eight U.S. manufacturers seeking the duties in recent years also have imported Chinese flooring and distributed it along with their domestically made products. They imported some from China because their customers, including flooring retailers and home builders, were "requiring lower-priced flooring," said Jeffrey Levin, a lawyer representing the U.S. makers.
Other importers of Chinese flooring and some of the Chinese manufacturers have hired lawyers to fight the proposed duties.
Among them is Swiff-Train Co., a Corpus Christi, Texas, importer and wholesaler of flooring. Jonathan Train, a vice president at Swiff-Train, said flooring prices in the U.S. would rise initially if the duties are imposed. Eventually, though, he said production would shift to other countries that aren't subject to the duties, such as Indonesia and Malaysia, and U.S. manufacturers wouldn't end up with a bigger slice of their home market.
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Mr. Train said the real fight is between independent U.S.-based flooring distributors such as Swiff-Train and bigger companies such as Shaw that are both manufacturers and distributors. Swiff-Train will have a harder time offering a full range of flooring if duties block imports from China, he said.
"This is not the U.S. versus China," he said. "It's U.S. companies against other U.S. companies."
Mr. Levin, the lawyer for the manufacturers, denied they are seeking to hurt independent distributors.
Also opposing the duties is Lumber Liquidators Inc., a U.S. chain of flooring stores. The company said at a trade-commission hearing in November that certain types of Chinese flooring are among its most popular products and that U.S. manufacturers had failed to "adapt to the changing market trends."
Importers would be in a tough spot if duties were imposed, said William Perry, a lawyer representing some of them. That's because such levies can be adjusted by the federal government annually, and new duty rates are applied retroactively. As a result, importers don't know how much they would have to pay when they agree to bring in Chinese products.
On average, the trade commission found, Chinese import prices in 2009 were 28% below those on similar domestic flooring. Chinese imports accounted for 47% of the U.S. market for this type of flooring in the first nine months of 2010, up from 32% in 2007 as a whole.
China has become a frequent target for U.S. trade penalties amid charges of government subsidies or unfairly low pricing. Of 298 U.S. duties in force targeting dumping or subsidies, the Commerce Department said, 36% are on Chinese goods, ranging from steel and bedroom furniture to seafood and chemicals.
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Old 10-15-2011, 03:26 PM   #11
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Here's a followup:

Ole Bud ain't so dumb afterall.


http://www.foxbusiness.com/markets/2011/10/12/commerce-sets-duties-on-chinese-wood-floors-steel-cylinders/
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Old 10-28-2011, 03:00 PM   #12
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http://www.ntlfloortrends.com/Articles/Breaking_News/BNP_GUID_9-5-2006_A_10000000000001120617?bnpad

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