Suzio York Hill

Pit & Quarry's Third Annual Aggregate Producers Forum

Pit & Quarry's KUHAR: How has your company weathered the ups and downs of the current, uncertain economy? Do you see a slowdown in business or demand right now? How do you foresee 2003 shaping up?

UPP: We have had a very strong 2002 and the general local economy has been very good, so most of our inventories are next to nothing. We’re going to spend the first part of 2003 just building inventories back up. We are, however, expecting sales to be considerably less into the early part of next year.

Our state of Missouri put a highway tax proposal to the voters, and they voted it down. So most of the money that’s going to be spent on our highways in Missouri is going to be primarily to finish up jobs that have been started or for maintaining road. So we’re expecting a down year in 2003.

LUCK: We’re in Virginia and North Carolina. And, essentially, 2002 was a strong year for us. Some of the other players in our market are slightly off from the previous year, but we’ve got a number of pertinent issues that affect the outlook for 2003.

The pending war effort will have a potentially big impact on Virginia. Virginia has the largest naval base in the world in Norfolk. When the troops get deployed, traditionally the economy there slows. Spending slows.

Consumer confidence has really helped the market, with home building being a major emphasis. The commercial market is soft. There’s a lot of available rental space out there.

In Virginia, we have a tremendous state budget deficit. There is suggestion of job cuts underway - 1,800 jobs - and a $2 billion deficit forecasted. There are major cuts taking place within the state in order to make revenues match expenses. So, in general, our picture is not strong for 2003. We’ll see the second half of 2003 be particularly weak.

SUZIO: Connecticut is about the same as Virginia. Residential is what’s driving the industry in our area. That, as well as schools and private universities and some of the power plants. That’s given us a good strong 2002. It just seems that, like anybody else, we have to work harder and do a little bit more to make a little bit less.

States are in a budget crisis, and we’re all talking about TEA-21 funding. With the states in the crisis they are, how many of them are going to be able to come up with the matching funds that are part of it? I just read an interesting report that says there are only five states in the country right now that aren’t in some kind of fiscal crisis.

So 2003 is going to be a little bit of an off year, but the airport spending and the private-school and public-school spending will keep it up. I don’t know about the residential, with as many people out of work as there are. But I don’t see it lasting. Let’s face it, inventories are down, and people are going to have to buy new equipment and produce more material, and that’s what’s going to drive the economy.

BURHANS: We don’t see a lot of change in things. There was a drop from 2001 to 2002 - moderately, a couple percent, But then you go into the Southeast - South Carolina, Georgia, Tennessee, and it has drastically declined. There was a double-digit decline in 2002.

Northern California has seen some declines. A lot of that has to do with the whole Silicon Valley group of businesses and everything taking a beating. South California is not too bad. It’s still doing well. Dallas/Fort Worth and Houston are still looking good.

But if you face a war, uncertainty goes up and all predictions are off. And we can see that in a lot of the states that we’re in. We’ll see a dramatic slowdown if people slow down their spending. The money is still there. But no one wants to spend. They want to hold it.

SUZIO: You’re right about the venture capitalists holding it, but the New York Times has been doing several articles on the people out of work who aren’t looking for work, and they haven’t cut their lifestyle at all.

Your average consumer is still living off of that credit card and those interest rates and is still spending. And you look at how many of them are out of work, and I say, where is this money coming from?

BURHANS: Some of it is the refinancing of mortgages. That’s a trend. Bankers are being flooded with refinancing. They can’t get enough people hired to handle it all. There’s a phenomenal growth of refinancing taking place right now, which brings an increased cash flow on the commercial side of business.

WALLACE: In Arizona, we saw a decline start in the third quarter of 2002 and, in the fourth quarter, we saw more decline. Our market is basically dependent on the population and new job growth.

Construction employment in 2002 was hit pretty hard compared with 2001. Construction jobs were down almost 5 percent, and 2003 is forecast to be down about another 3 percent.

The mining industry is really down - was down all of 2002. There’s relatively no growth in that area, so you’ve got the miners out of work. Our residential growth drives the economy in Arizona. Beginning in 2001, we saw a real decline in housing - about 30 percent down from previous years.

The commercial market is down. We think it’s going to pick up in the second quarter of 2003. We’re budgeting about the same volumes and revenues as we did for 2002.

People look at Arizona as the hot spot of the United States but, really, the temperature is high only a couple months out of the year, and the rest of the year is pretty nice. So we’ve got a pretty good quality of life. People still want to come. Infrastructure growth is still strong. You can see the freeways building. There are more freeway design plans on the boards.

If you look at this market, it took off in 1992, and it hasn’t looked back since. We reached some peaks in 1998 and 1999, and then a little decline. Currently, we are on the backside of a peak. Historically, we’re way up over everything. This is a good market.

One of the problems competitively with this market is the ease of entry that allows people to start businesses, placing downward pressures on pricing.

SUZIO: There was a Target store built across town from us that put 400,000 tons of rock on the market in a nine-month period, and the guy was getting paid to remove it. Then the equipment suppliers did him a nice little favor by letting him demo a lot of the equipment. A lot of times they are not dealing with the same environmental and MSHA/OSHA laws that we are.

KREMER: That’s probably very true with the regulatory agencies.

SUZIO: You get a guy who is selling rock, loaded into people’s trucks for a dollar a ton. How do you compete when you’re held to a different level of standards.

For him, it was all gravy. He was getting paid to remove it and then selling it. And it’s not uncommon. That’s the biggest problem in our state. You talk to the producers at our association meetings, and that’s what they say.

And now the problem is that when you dump that much stone in the market that cheap, stockpiles are sitting in everybody’s yard. Every contractor now has a pile sitting there, and it affected us all.

COX: I’m in the sand and gravel business, crushed stone and highway construction. I’m in the Northwest. The housing industry is very strong. The commercial industry has been struggling. We’re seeing $150,000 houses spring up out of the ground at a very strong rate.

Our highway business is probably off 40 percent. There’s a lot of competition and not as much publicly funded work. Contractors are cautious because Boeing is not building as many airplanes as they were, Microsoft’s stock is a third what it was three years ago. So all those big industries are being reduced, but 2003 is going to be very positive.

REA: I’m in Northern California, and I agree with a lot of the comments that everyone else has made - there are budget deficits, and the residential market seems to be driving a lot of things right now, particularly in Southern California.

The long-term concern for California is that the population is going to continue to grow. It’s 35 million now. It’s supposed to go up to 50 million in another 25 years. But we have to worry about competitiveness with other Western states. We’ve certainly lost some manufacturing jobs when we cut back in Silicon Valley’s high-tech business.

But compared to other states, like Texas and probably Arizona and so on, we have higher land values, land costs, taxes are higher, energy costs are a concern, and probably the challenge in the future is how we’re going to continue to attract business to keep all these people employed.

KUHAR: Is there any more talk going on about the issue of dwindling reserves in California? Is that still a hot topic?

REA: Yes, it’s definitely a concern. It’s something we’ve tried to work on with the state to help make that more widely known. We are trying to provide better information for local officials and the public to understand. They’ve come out with a map that shows the regions and some of the supply/demand balance they are trying to capture.

BURHANS: Whatever area you lay that map over, you see all the possible reserves. There are probably houses built on top of them right now. The population keeps growing and growing and covering the reserves. Within the next 10 to 20 years, we see California as probably needing to import aggregates to major metropolitan areas - Los Angeles, San Diego, San Francisco.

KREMER: We’re already seeing some of that. California is continuing to change in some of its attitudes towards mining and harvesting aggregates on the riverbeds. You’re going to see a switch to quarries.

When you look at the available reserves that are out there, it’s taking to long to get permits, and it’s not uncommon for places to have areas that have been set aside for surface mining and aggregate reserves from previous SMARA legislation. It’s not uncommon to look at available reserves that have issues with endangered species. Ten to 12 years is not an uncommon time frame to secure a permit.

KUHAR: The coal mining rescue in Pennsylvania brought back the idea that mining is a dangerous industry. How are your companies doing with their safety records?

WALLACE: We have an increased emphasis on training. We put Part 46 training back on the forefront. We did train, but we didn’t do as much as we should have been doing. We’re seeing some site-specific training for visitors that come on-site.

There is also pressure on the human-resources department because now, to hire a person, you have to do a drug test and background check. The record keeping is tremendous.

UPP: We’ve come up with an online information database, because there is so much record keeping that has to be done. There are so many different people that are added to the database - contractors, vendors and people that come onto the site. And it’s a lot of work. It’s also helpful. We can keep track of what employees had what training.

So if you’ve got a guy that you need to do a certain job, you can go in, check his training record, and say, "Yes, he got his training, and it was six months ago. He’s got it. He’s good." Or you can pick from a specific job and see all the people who have been trained for that job.

So you can know who’s been properly trained and documented. Part 46 is geared more towards documentation than it is the training aspect.

BURHANS: Part 46 was just a piece of paper for us to work on. We were already in the mode.

KREMER: We, as a company, also focus on safety. We have a good safety record both in our materials’ operations as well as our construction operations. But even with our incident rates going down, the cost is going up. We see that increasing at an alarming rate.

BURHANS: For us, financially, it has been a huge cost reduction.

LUCK: With our organization, there is no doubt that the costs have increased. We’ve hired additional safety coordinators and put them in smaller areas, covering smaller numbers of plant operations. And that was pre-Part 46. It was really part of a continuation of our culture, which just always had a tremendous safety component to it.

So, from a cost standpoint, I would agree. Currently, our accident rate and our experience from the insurance standpoint have helped to lower some of the cost hikes we would have had with insurance premiums. But, in total, it has come at a higher price.

Given our overall industry reputation and how people see us, is it worth that investment and additional funds? I’d say yes. So the administrative aspect of it is an area that we believe could have been designed in a much more efficient fashion.

COX: There’s a positive side to this. And that is raised awareness. We have people on the ground who have always talked safety, but this adds to that message. On the negative side is the bureaucracy part of it.

UPP: And we’re still seeing an increase in fatalities. In 2001, fatalities were down 10 or 15 percent from the previous year when Part 46 was implemented. I thought, "Wow, it really is making a difference." But then [2002] is on another record track for fatalities. We’re spending more money, but there are still guys getting killed. So Part 46 obviously is not the solution to the problem.

KUHAR: Have you been hit with more lawsuits in the past years than in years previous? How do you see the legal challenges of being an aggregate producer these days?

BURHANS: The biggest legal challenge is transportation-related. We load trucks and we are tied to whatever those truckers do. We just sold out of our trucking business because the liability was so high, and yet we recognized that we’re still liable to a point.

SUZIO: That’s what we see also. It’s related to the transportation more than anything. And the part that kills me is that there are times where your vehicles are involved, your driver is not cited. The person in the other vehicle is given a citation or a ticket and found at fault, yet they are the ones who see the dollar signs, grab the neck, and now you have a lawsuit.

Also, the insurance companies are to blame because they allow them to sit there and say, "It’s going to cost you this much to defend it, so why don’t we just settle." And that irritates me to no end.

BURHANS: If you’re talking about permitting or any of that stuff, those are all regional issues. People in the community can decide that they don’t want the quarry there anymore - the quarry that’s been there for 50 years before they ever had a house there. They just say, "Hey, it’s time for you to leave. We’re here."

It takes just five residents to get a politician stirred up to start chasing you out. Before you know it, you’re having to defend your right to be there, even if you’ve been there for 50 years or a hundred years. I’ve had an experience in Chicago where the quarry was there before there was any civilization and now they’re trying to do everything they can to shut it down.

SUZIO: And, in some cases, they feel that the value of their home has decreased, and they see what people in other neighborhoods are getting for the same style house, and they are resenting it.

So now they say it’s because of you, and they go after you.

BURHANS: It’s all motivated by the value of their homes. It’s not a safety issue.

LUCK: On that particular front, I guess we’ve been pretty fortunate. In our area, we traditionally try to work very closely with the neighbors. Our plant managers have it in the business plans to see all the neighbors and community associations X amount of times per year. So that has opened lines of communication, and it has really helped us.

We have been doing roundtables with a cross-section of the community, and we do site visits. We give them a heads up on things that we’re looking at and what kind of a year we’re looking at - any future changes to the site. Those things have, for us, been very, very helpful. And we have not had any legal challenges from the communities, even in the Washington, D.C., area where the property values of the houses are climbing.

So that has not been a problem in our area, maybe because the quarries are in the regular path of the most desirable areas to live in. It does go back down, to some degree, to the communication thing and trying to run a really tight operation.

And I agree with the comments regarding risk exposure on the vehicle side. That’s huge. Even if the vehicles are unloaded and not dispatched by us and coming to us in a random fashion, we still get dragged into it.

BURHANS: In your community roundtables, have there been any demands put on your facilities to make adjustments to accommodate the community?

LUCK: Oh, yeah.

BURHANS: Do you respond to it?

LUCK: Absolutely.

BURHANS: I’ve had that success in the past, too. With the downturn in the economy, we worry about cost-cutting and everything like that. And there’s a paradox here regarding going out into the community and being open to deal with the issues if they come with a complaint. Spending the money to fix that raises costs and expenditures, but we need to be willing to do that.

LUCK: If you don’t, you just alienate everybody. And most of the stuff they are asking for, in general, is stuff you can deal with.

BURHANS: Reduce the noise.

SUZIO: We’ve actually found in some cases that people just want to be listened to. The worst thing you can do is turn a deaf ear to these people, because then you’re encouraging them to say, "See, they don’t care." But there are neighbors that we have that complain and we’ll sit down with them and sympathize with them.

You explain, you communicate, and a lot of times you can walk away from that without actually doing any alterations to your business. They just see that you’re concerned, and they appreciate that. They don’t want to feel that you’re turning a deaf ear to them.

KUHAR: Our research tells us that one reason aggregate producers dislike a lot of the recent industry consolidation is because it contributes to an inability to get parts and service, largely because of the loss of relationships with the people that were there previously. Is your company experiencing any difficulties with parts and service and what is being done about it?

UPP: Our problems are more on the service side. What we found is that with the mergers, one of the first things they do is get rid of technical people or downsize the technical department. The people that we used to go to, to get questions, to get answers to technical questions, are no longer there and we have still bought that piece of equipment from that company.

Granted, they may have been a different name at that time, but we still rely on them for service. And when there’s nobody there anymore, it’s difficult to figure out what you’re supposed to do and how you’re supposed to resolve issues. We keep the names of those people so that we can try to track them down. And even though they are not with the company, they are very willing to give you help.

KUHAR: What drives that?

UPP: Those people still feel such a sense of pride, even though they got canned. They are the ones that built that company up to what it was before it got taken over.

SUZIO: We find the same thing. We get more help out of the retired guys than a lot of the current ones. And it’s frustrating, because, like anything else in our world, it’s to a point where people feel that these things are disposable. Their solution is either an upgrade or to sell you a new piece of equipment. They don’t want to deal with what you have. They want to put you into something new.

That’s not really our theory. We made a capital investment to begin with, and we want to get our money’s worth out of it and then some. And their answer is, "That’s eight years old. You need to put in a new one." And that’s fine, but eight years ago when you sold it to us, you told us it was going to be the answer to our problems for 10 or 12 years.

COX: If you want to service our business, obviously you’ll be our first call, but if you don’t participate or don’t want to support our business, we’re going to go to people who support it.

LUCK: We have a Metso distributor in our area and we are partnering with them. We’ve made a list with them of all the things that we need, and we want to see stocked. Some of them are stocked by us; some of them are stocked by them. And we really feel like it’s too early to tell, longer term, how the service is going to be handled?

How are they going to back things? What’s going to be their attitude? But we basically have jumped in with two feet and said, "We’re going to do our damnedest to try to make the thing work and we’re going to knock on the door and we’re going to be right there with you and trying to set clear our expectations of how can we work together.

WALLACE: We have been fairly fortunate in Arizona. So far we haven’t had a lot of trouble with lack of supply. We’ve had a little trouble with the service.

KREMER: A lot of suppliers and dealers that we were used to dealing with are no longer in that line of business. A good company that wants to continue on in the business is going to work with you and make sure that relationship continues to go forward. I have some concern, however, that control over proprietary parts seems to be getting out of hand. That, to me, is a larger issue than just the consolidation of industry.

KUHAR: What do you mean by "proprietary parts?"

KREMER: For example, some foundries might not make liners for particular cones, so you’re pretty much at the mercy of their manufacturers to do that. It might be a bearing or some other thing. In years past, it was pretty easy to get replacement parts that weren’t necessarily proprietary.

REA: California has a lot of specific requirements for air emissions, particularly, diesel emissions. Some have said they’ve had a hard time working with manufacturers on retrofits and things like that for some of the off-road equipment for trucks. It’s getting a little bit better, but it has been an issue to address California standards.

KUHAR: Are you still going through the process of automating plants, or do you feel you have done the bulk of that job already?

UPP: We fully automated our plant. Whenever I say "plant," I mean crushing plant. We’ve had an increase in plant efficiencies, as far as reduced downtime, reduced costs. One thing that we’re going to focus on in the next year is integration of the data provided by automation. There’s so much information out there that comes from the plant. It’s hard to process all that information into something useful. So one of the main focuses that we’re going to have with our automation is finding out what the data is that’s out there and how we can use it to maximize the efficiency of the plant.

KREMER: We’re certainly not where we want to be. I can remember going through a Luck Stone operation 20 years ago and seeing their automation and seeing what they were doing back then. It was just phenomenal. But I do think that technology has become a lot better. It’s becoming cheaper. In places where we thought it wasn’t a possibility - portable applications - it’s now a reality.

As the work force competencies become greater or even lesser, automation in data collection becomes more important. Coming from primarily union operations, we’re a little bit restricted because of manning requirements on certain things. But, overall, the key to productivity is going to be automation. We’re certainly looking to do a lot in our operations in the next year.

BURHANS: Automation is like the ongoing battle for truth, justice and the American way. With all the acquisitions and the integration of what we’re doing, it’s conditional upon the plants that we acquire and the plants that we’re working with.

We may have some that are in good shape and automation is simple and easy to implement and upgrade. With others, automation may have to wait until we do a full plant reconstruct. And so it’s going to be a continuous work in progress for Hanson in the long term. I don’t see that changing over the next five to 10 years.

LUCK: I got to say that we are continuing to look at everything that’s possible from front gates all the way through the entire process. As well as trying to look at opportunities in the traditional production sense, we are also trying to look for opportunities to automate information to customers and really look at the customer’s side. That’s a major change at Luck - to look at the customer’s side versus the crushing and screening.

WALLACE: Our main focus is on the customer’s side, as well and getting the particular account automated. We don’t have a lot of automation in the plant side. We try to keep that simple and straightforward. Primarily, our operations are mobile plants; they are not stationary.

BURHANS: One of the things that we’re seeing industry-wide are mega plants. Not only mega plants, but mega terminals. We’re trying to limit truck transportation - going to rail or water and looking at connecting and automating everything.

And that’s an industry-wide issue with a lot of companies - integrating the load-out facilities and the transportation into the plants more. It goes well with what you’re doing regarding the customers’ side of the business.

COX: Associations don’t get in the middle of operations, obviously, but one thing we do is a truck ID program, where all aggregates haul trucks gets one number that we’ve issued, and that’s helped simplify the operations. It helps so there are not six or seven numbers on a truck. It’s one. It helps the truckers, it helps in the billing, and it moves the trucks more quickly through the plant.

KUHAR: What national, state or local regulations cause your company the most headaches in terms of time, energy and money? How does your company handle compliance?

WALLACE: We have two people assigned to safety and environmental concerns and compliance to all regulations, and that’s one thing we do. We want to be complaint with all regulations.

KREMER: Being primarily a public company, but also a company that’s owned by a majority of the employees, compliance is a huge issue to us. The last thing that we want to see is our name on the front page of the newspaper or anything else relative to being noncompliant to issues and regulations.

It’s really hard, at least for us, in dealing in the Western states with the endangered species issues and with the lack of science that has given way to speculation on several issues. That continues to be what we spend a lot of time with in our permitting.

For the most part, California has given its influence to many, many states over the past 20 years, whether they like it or not. And for some, this has been positive. I don’t think that I would be remiss to say that some of the regulations that came out were totally wrong.

I can see differences in air quality in southern California and northern California. Those are obviously positive things. But again, it relates back to the sciences. That’s primarily it - making sure that what you’re doing has sound science applied to it before you make a regulation.

LUCK: Environmental issues are probably one of the most time-consuming and most frustrating aspects in this business. What we have in Virginia is basically the Department of Environmental Quality, which has really set up its own set of regulations, and then we have engineers that have theirs. And, from time to time, we have the fish and wildlife people come in, they have their lawyers EPA comes, they have their lawyers. The Virginia Department of Mineral Mining has its lawyers.

KREMER: And they are each the moving target?

LUCK: Exactly. We have been fortunate that we have tried to come at this thing with an approach of trying to work together, trying to be cooperative, trying to keep collaborative, trying to do our very best to do that, even when we are just absolutely torn out of the socket, and we’re so frustrated.

We really tried to go at it with that approach. Hopefully, in time, they’ll begin to move toward some degree of agreement, so that we have better direction.

KUHAR: We’re about two years into the Dave Lauriski era at MSHA as opposed to the McAteer era that came before that. I expected to see a little bit more of a change out of MSHA and to see it become more of a consulting agency, as opposed to a heavy-handed regulatory agency. Have you seen any difference?

COX: It’s gotten worse in my area.

SUZIO: They started out with good intentions. I don’t know if anyone else had a chance to participate in it. But right after they came on board, they went around and they did these shop talks and these quarry talks. It was an opportunity where the citation books stayed in the truck, and they talked to the managers, and they talked to the front-line supervisors and the employees about common sense and reducing risk and injury.

It was very, very encouraging for me. It was not adversarial. And they said that they were going to do more of those, and it was going to be more of these open house talks. But we haven’t seen anyone come back and do that since that first time through. And that was discouraging because it was a nice switch from having the guy coming in and having to find something wrong with your operation.

COX: Lauriski publicly stated that it was going to be less citation minded. We haven’t seen that in our region. We have seen a greater number - they find something wrong and write a citation. So we don’t see an improvement in our area at all, as far as regulations.

BURHANS: You see MSHA people in different areas trying to work with you and in other areas just pulling the book out. It’s an organizational design issue that goes through MSHA. They need to make a clean sweep of what they are doing and totally revamp the organization, but that probably will never happen in our lifetime.

SUZIO: OSHA is also part of it. I’ve seen more of those two agencies butting heads and trying to overstep jurisdiction and not really knowing which has which role.

KREMER: Acceptable standards not being the same through OSHA and MSHA, you’re constantly playing the catch-up game. What might be acceptable to an MSHA inspector might not be acceptable to OSHA or vice versa. So again, there’s some inconsistencies in the regulations - the interpretation of the regulations.

KUHAR: This is something that we’ve talked about in the past, but deserves to be revisited. Would you like to see an national image-building program for the aggregates industry? NSSGA has tried to do that, but there’s never been any industry-wide campaign to tell the story of what the aggregates’ industry has to offer.

SUZIO: The national level is where we get the information, and I’d like to see them do more of the putting together the pamphlets and all. But it really comes down to a local level. I can’t expect someone in Washington to go out there and put me in a good light in my community. I need to do it. It comes down to being accountable for your own actions.

I don’t feel we have to build our image. We have a very good image. We just need to get it out there and get more involved. I like the fact that we can rely on the national associations for the information, but I don’t expect them to get it in the hands of the school kids or the zoning boards or the neighbor down the road. It’s our responsibility. That’s our job. And more producers need to see it that way.

WALLACE: I agree to a point, but you’ve got opposition groups that are in a lot of states. We need to get our message across - the value of our industry to people across the country. Some of those folks do not know what we do and what we bring to the table.

We should have some advertising campaign. I remember growing up in Arizona. Arizona used to be the four Cs: copper, cattle, cotton - and whatever the other fourth C was. But the mining industry had a little TV show. It was on television 30 minutes a week, and it was quite informative, and it showed all kinds of things that the copper industry was doing,, the value of the mining industry.

We’re talking about getting people interested in becoming future employees. Let’s let them know what we do. We need an advertising program out there that tells the amount of revenue in our industry, the amount of jobs, the things that are impacted by our industry - houses, this hotel, gypsum wallboard.

SUZIO: Toothpaste.

WALLACE: Anything in your house.

LUCK: The campaign of "Got Milk" and "The Other White Meat" campaign that was done by the pork industry - both of those were nationwide campaigns. It cost them about $10 million plus in order to do that kind of thing. How do you think people would respond to footing the bill for a campaign like that, or something even half of that. Do you see companies bellying up to the table for that kind of thing?

UPP: Before we invest in something like that, we would want to know, "What’s our return going to be? What are we going to get out of it?" One area it would be prudent to look at is the coal industry. Several years ago, they did a campaign through commercials and advertisements and in newspapers and so forth, and they invested a lot of money, so more people would know about the coal industry.

One of their ads was just a light switch. So maybe our industry needs to look at a similar industry, like the coal industry, to learn if they got their message out. Was it beneficial? Or are we better off going locally or to the state, and find out if there was a similar industry that’s been there doing that?

KUHAR: The thing about the milk industry and the pork industry campaigns were that they had a way to measure their success, because it all boiled down to retail sales of pork products, retail sales of milk products. Maybe the aggregates industry doesn’t quite have that kind of measurement.

BURHANS: And we’re not dealing with the consumer, but we are.

SUZIO: Exactly. Are we talking a national image-building campaign or a national marketing campaign? They are two different things. We just want to show people, "Hey, you can make a living in this industry." We want to educate people that there’s a need for what we’re doing. You need these materials. You need a roof over your head with shingles on it, and you need a foundation.

You need that driveway, and you need that school. You walk out your door in the morning and everything that your foot or the rubber on your car comes in contact with came from a quarry, a mine, or a sand and gravel operation.

KREMER: Charlie, can you talk maybe a little bit about the matrix that we employ there in California in doing this image campaign?

REA: In our association, it’s been a big deal. We spent $250,000 to $300,000 over the last couple of years. We began by doing research. We had a group go around the state. We got some focus groups and then a phone survey, so we got an idea of what people thought about our industry.

PR people went back to figure out what messages were needed – principally that people are concerned about a shortage of aggregates, and they are interested in the economic impact. So, subsequently, we’ve gone out and put together a lot of reports and information on the economic impacts. We’ve surveyed our stone producers on reclamation and found out how many types of reclamation are out there.

We’re doing a video on reclamation. We’re going out and getting our members some training on what to say and how to phrase things - communications training.

We try to involve state agencies or academia, if that’s possible, because they are more credible than we are at getting that message across. We’ve got a lot of materials out there. It’s up to the producers how they want to use them.