Volume 43, Issue 6 - June 2008

the Business

Going (for the) Green
by Lyle R. Hill 

In the eyes of the world, Johnny “The Mooch” Rago would not be considered a very bright guy. In fact, some might even refer to him as somewhat dull. And certainly if we were to look only at his academic achievements ... or lack thereof ... we would have to conclude that he might just be challenged intellectually. He was 16 years and seven months old when he graduated from grammar school—the only graduate in the history of Irving Elementary to legally drive himself to his own graduation ceremony. At the age of 19, he dropped out of high school. He was a second semester freshman at the time. In spite of the shortcomings of his formal education he is, in many ways, a very intuitive, logical, sharp individual. And if we were to equate intelligence to cunning, shrewdness and perspicuity, we might even be inclined to think he is a genius of sorts. 

It had been a little over a month since we last spoke and, during that conversation, I had promised The Mooch that I would look into this National Fenestration Rating Council (NFRC) thing that, for some unknown reason, had caught his attention. So it came as no surprise when he called late one afternoon to see how I was doing with my investigation. 

“Hill,” he began, “how goes the struggle?”

“It’s never easy, Mooch,” I answered after immediately recognizing his low gravelly voice. “In fact, in some ways the struggle gets a little rougher every day. And how goes it with you?”

“It’s okay, Hill, but I’m anxious to see how you’re doing with your analysis. Have you reached any conclusions yet?”

“Well, to be honest with you, I probably have more questions than answers at this point. But I’ve gotta tell you, Mooch, that I’m a little puzzled by your interest in all of this.”

“Hill, you should know me well enough by now to know that I am a student of two things and two things only. The first is money ... specifically, who has it and how do I get some of it? And secondly, I continue to be interested in, and fascinated by, human nature.”

“OK, but like I said, this whole NFRC thing is puzzling and I’m struggling to make sense of it.” 

“I’m not surprised that you’re struggling, Hill. In fact, I would be more surprised if you weren’t. So, I’ve been doing a bit of research on my own, but before I tell you what I’ve come up with, let me hear where you’re at with all of this.” 

“It’s complicated, Mooch … at least at first glance. You see the NFRC was created about 17 years ago to develop a uniform identification program that would help standardize and maybe even enforce energy requirements for residential windows. All kinds of manufacturers were making bogus energy claims and there was mass confusion with regards to standards, compliance and ratings. The NFRC really helped to clean up the mess. In fact, you could say these guys were more or less at the forefront of the ‘green movement.’” 

“OK, then what?”

“Well, as time went by, the NFRC people apparently felt as though they had conquered the residential side of the window fenestration industry and so they decided that they should maybe turn their attention to the commercial side of the market. Perhaps they felt that the commercial side needed some help from them in going green.”

“Did anyone ask for their help?”

“That’s not real clear to me, Mooch. I have heard them imply that the DOE had pushed them that way but, you know, there’s already all kinds of safeguards and verification procedures for the commercial side of the industry. I mean, the commercial side is much more formalized and the permitting, sample and test submission procedures are already time-consuming, costly and cumbersome. I can see why the residential area needed some cleaning up, but there is a huge difference between the residential and the commercial fenestration businesses. Maybe they just felt that the green movement at the commercial building side of things needed them.”

“Kinda out of the goodness of their hearts, Hill?”

“I don’t know, Mooch. Something has to be motivating them to move into the commercial side.” 

“What do you think it might be, Hill?”

“I’m not sure. I mean, I’m all for the environmental stuff but I don’t honestly see what the NFRC brings to the table except another layer of redundancy and the costs associated with it. I’m a little confused about the whole thing. Specifically, what will they really do that isn’t already being done or couldn’t be done more efficiently and cost effectively by someone already in a position to do so?” 

“Let me ask you something, Hill. Have you ever heard of IRS Form 990?”

“It sounds familiar. I think it’s the form that not-for-profit organizations have to file with the IRS each year, but I’m not going to tell you that I’ve ever seen one.”

“Well Hill, I’ve seen quite a few of them.” 

“How do you get them? You don’t steal them do you, Mooch?”

“No, no, no. You see, if an organization has a tax exempt status, their 990 form is available to the public for review. You can get a 990 on any tax exempt organization and let me tell you Hill, some of them make for some very interesting reading.”

“Really? So did you get one on these guys?”

“Yes I did and it was pretty much what I expected.”

“What do you mean, Mooch?”

“They are a decent size business, Hill and just like any other business. They take in money, give out contracts, spend money on themselves and take pretty good care of their people. And they seem to be doing quite well. Particularly if you look at their cash position and investment holdings. In fact, Hill, I think you would be amazed at how well they’ve been doing.” 

“So what are you saying here, Mooch?”

“I’m saying that, just like any other business that wants to sustain itself, they need to look for new things to do … new services to sell, and particularly so if the stuff they used to do to earn money has started to dry up. And it really doesn’t matter if what they do is wanted, useful or even needed. If they want to keep the train rolling, they’ve got to look for new areas to go into.” 

“So you don’t think it’s all about going green, Mooch?”

“No, Hill, I do not. I think it’s actually all about going for the green.” 

Lyle R. Hill is president of MTH Industries of Chicago. Mr. Hill’s opinions are solely his own and not necessarily those of this magazine.

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