1. Big Picture: The Hook to Recovery
Combining efforts to buy big, cheap, and green can spark recovery.
Source: BIG BUILDER Magazine
Publication date: November 1, 2008
By Dana Barton
Large-volume home builders have a hook available that could not only help stop the industry's slide into the
abyss of non-sales, but also could help snatch it out of the mess entirely. However, it would require us all to
together in trust to build a new supply chain for green products.
The pain is quantifiable. According to the U.S. Census Bureau, housing starts in August were at a seasonall
annual rate of 895,000, marking a year-over-year decline of 33.1 percent. The Bureau of Labor Statistics rep
construction has lost 564,000 jobs since its peak in September 2006—and over half of that decline occurred
eight months of 2008.
Are we hurting enough yet to set aside our entrepreneurial, isolationist thinking to embrace something that d
us working together to recover together?
I believe creating a big builder consortium to buy green materials can help jump-start recovery in home bui
related industries, and, eventually, the rest of the U.S. economy.
The general consensus is that it will take years for us to recover naturally from this low point in the cycle. I
we can afford to wait for that to happen or for the government to provide enough tax incentives to make ins
products in our homes a profitable option.
The consortium would become a vehicle for us to pool all our volume buying power to purchase green, ene
products. We would then be able to leverage our total spending with the fewest possible suppliers to achiev
buying at a cost equal to, or lower than, what we are currently paying for traditional, non-green, non-energy
products.
ADVERTISEMENT
Email this article
Print this article
Subscribe to BIG BUILDER
Subscribe to Newsletters
Dana Barton

2. This is possible because I think these suppliers' costs are still artificially high due to the high cost of their ca
low volume of product that they are producing. Suppliers would willingly participate when they see the pot
creating a long-term connection to such a large buying entity and the opportunity to become a leader in thei
Home builders would buy into the concept as well, out of fear that they couldn't afford to be left behind.
Here's how building green homes would spark more sales and benefit builders:
 Provides potential buyers an incentive to purchase a new home instead of an existing home.
 Gives buyers of new homes lower utility and maintenance costs.
 Appeals to those who are interested in saving our environment.
 Makes a home buyer think like a car buyer: Why buy used when you can buy new at the same price with
available on used models?
 Gives people a reason to shop for a home.
 Casts a positive glow on home builders, demonstrating that they are doing what they can to protect the e
combat global warming, and reduce our consumption of foreign oil.
Creating a big builder consortium to buy materials that are green
and conserve energy can help jump-start recovery in home
building, related industries, and, eventually, the rest of the U.S.
economy.
Again, building this consortium would require us to work together honestly and with trust. And, yes, it mea
some of that competitive advantage all of us think we have over one another today. But that's a small price t
becoming profitable and a major contributor to economic recovery sooner rather than later.
I have built successful consortia in tough markets before, both domestically and abroad, and I think the timi
for this industry. As a start, this consortium would require every participating builder to supply a list of gree
energy conserving products they are interested in buying. Then a team, built from representatives of all the
builders, would develop a plan to determine which products, suppliers, and programs to pursue, as well as t
with providers. In the end, we would all have the same pricing for these products.
We need this hook.
Dana Barton is a consultant to the home building industry and other manufacturing operations. He may be
e-mail at mailto:danabarton1978@att.net
Sponsor Spotlight ADVERTISEMENT