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Only Online -Door and Window Manufacturer May 2006 Heightened Awareness The hurricanes of 2005 devastated many people, homes, businesses and communities along the Gulf Coast. One reason these areas saw so much destruction and damage was because there was no statewide building code enforced. Studies since have shown that, had there been a building code enforced the amount of damage could have been reduced. Since last fall's hurricane season Solutia Inc. has become actively involved in the fight for hurricane legislation. It's an effort that is of great importance to everyone at the company, including Jeff Quinn, chief executive officer (CEO). Quinn, along with Paul Berra, Solutia's assistant general counsel and director of government affairs, and Nanette Lockwood, legislative affairs manager, talked to DWM magazine about why this is such an important issue and the measures they have taken to educate the building and codes officials on both state and federal levels. Q: Solutia has long been involved with building codes and standards. What was it about last year's hurricane season that really prompted you into this strong action? JQ: I became CEO here at Solutia in May 2004. We've been through an interesting time with our bankruptcy, and one of the things that I've learned in the three plus years I've been here, especially since becoming the CEO, is how great a product we have. Our laminated glazing interlayer (LGI) business in particular makes a product that adds such tremendous functionality to glass, and the significant hurricanes of last fall were the first incidents we've had--really significant incidents--since I became involved in these businesses. That prompted me to say "we have a product that could have done some good here," that could have prevented the massive damage that was suffered because of Katrina and Rita, especially Katrina. And, wow, do people out there realize the value that this product could add? It, unfortunately I thought, was a product for which there was not general recognition. It's out there, it's available and it will have a significant, significant economic impact on the hurricane stricken regions. So, [after] talking to our people, to Paul [Berra] and Nanette [Lockwood] and some of the other leadership in our LGI business, it became clear to me that we had been very involved in Florida when it adopted its codes, and not only from a code adoption standpoint but a consumer education standpoint. [Last fall] there was just a lot of work that needed to be done to create [the same] heightened awareness of where our products compare at the table. We've been fortunate to have been able to work with some of our customers on the window fabrication side of the business along with the leadership on the LGI side of our business to try and pull together a coalition that can work to make progress in both of those realms. Q: It's not often you hear about a company CEO taking such an active stance on an issue such as what you've done in this case. Why was this important to you? JQ: I know the benefits that our products [could have added]; you hate to see--just from a general economic principle--you hate to see a product that is available not being utilized to do the good that it can do. And certainly this business is very important to us. It is a core business for [us]. It's not a very small part of a much larger chemical company and it's not something that's happening way over in the United States [operated by a] foreign-owned company. Our LGI business is a big part of Solutia. It is really, in many ways, one of our crown jewels. It is a business that we're committed to … and as the CEO, nothing I can do has more value than to help promote one of our great products in one of our premier businesses. It's a nice mix that I believe is sound public policy and something that, obviously, for [us] is very good business. PB: I would add, that what Jeff obviously recognized with respect to the business opportunities, we've challenged the government affairs function to get involved. We brought Nanette in to the government affairs group, because of her relationships with all of the customers she already had, to build the coalition. It really helped drive this through … we've already had a major success in Louisiana and we're working hard in Mississippi. NL: I think one of the unique circumstances we ran across was the fact that, given code adoptions, the most significant [hurricane] activity the last couple of years has been [occurring] in the only three states that don't have statewide building codes. We felt like this was something that was going to be possible and probable given our position in the market, and some hard work to try and affect change. Q: Tell me about some of the efforts and projects in which Solutia has been involved pertaining to the building codes in Louisiana and Mississippi. NL: We took a look at the states that really needed legislative reform in order to affect change. We are working in Louisiana [which had its] first special [legislative] session last year, which was the first opportunity for us to actually make a difference. We worked with our customers and other industries to try and get enough support to generate full legislative reform for that state because it was not regulating residential construction at all; there were virtually no inspections [and] no permits. The only thing they were really even looking at [in Louisiana] was plumbing. So we helped write a bill, developed a coalition and were able to get it on the agenda for the special session and walk it through. That has been really a full time effort from back in October and November until Gov. Kathleen Blanco signed it at the end of November. Then we moved over to Mississippi and [that state's] session began [in January]. We were able to form another coalition to do similar things. We've got bills that are now introduced … and in the meantime what we've been trying to do is generate enough public awareness of the problem by sponsoring the studies from Louisiana State University's (LSU) hurricane center where they have actually been modeling some of the damage. In Louisiana we modeled some of Katrina's damage [to learn] what would have happened if the building codes had been in place there, both commercially and residentially, and the reduction in loss was about 68 percent. Now we've done the same thing in Mississippi where it looks like the reduction in losses would have been about 65 percent if the codes had been in place. We are only talking about three different changes in construction techniques. So with slight changes and a unique opportunity to re-build their codes … we're trying to get the message out to consumers, other industries and the legislature to say, this is something you don't ever have to repeat; you have a solution to this problem. We've been focusing on an educational as well as legislative path, to try and push these initiatives through. Now we're looking at Alabama, because their session [began recently] as well. PB: Take that LSU number (65 percent). That is estimated at $3.1 billion worth of damage that could have been avoided if a Katrina-like situation hit Mississippi and a statewide building code had been in place. That's real dollars, and these are significant public policy issues [being] raised [to show] the kind of potential risk-mitigation measures available. It just emphasizes again … why we believe this is such an important issue. NL: … We have such a unique opportunity to truly strengthen homes and businesses in those areas. We are only rebuilding about three percent of our building stock every year along the coastlines. And now, all of a sudden, we have a unique opportunity to re-build in those three states. If we capture the buildings in those areas it would be a significant jump in the types of construction and the opportunities for laminated glass. PB: On the federal level, we've been working in Washington D.C. with the United States representatives and senators on trying to tie things in to the Stafford Act. Although state and local governments share the responsibility for protecting their citizens, the Stafford Act was passed to enable the Federal Government to assist them, and their citizens, when they are overwhelmed during a disaster. The law establishes a process for a governor to request a Presidential disaster declaration and defines the scope of assistance from the Federal government; FEMA is charged with coordinating responses under the Act. Solutia has worked hard to promote model-building codes in disaster-prone areas. Better codes allow buildings to withstand natural disasters, thereby saving lives and property, and ultimately billions of dollars in federal, state and local rebuilding costs. Solutia is currently seeking to amend the Stafford Act to provide "bonus" funding for states that choose to include statewide model building codes (and related inspection and enforcement measures) in their mitigation plans. It is expected that this additional funding will encourage states to adopt new Enhanced Mitigation Plans with statewide model building codes, and strengthen buildings to withstand future disasters. JQ: This is no different than our focus on any part of this business. We view our glass fabrication customers as being important consistently. That's why we continue to work on innovation; that's why, even in bankruptcy, we've made moves to significantly improve the positioning of our LGI business. We're beginning construction of a PVB sheet plant in China; we've [also] just acquired full ownership in our former Quimica M joint venture in Mexico with Vitro. So even in bankruptcy, we're investing money in a business we feel to be very strategic. And … customers in that area (LGI) not only get a quality product, but they get the other things that go with it; they get a full-service, functioning governmental affairs group working hard to build new markets and understand the values of our products. [Customers] get the innovation and the research and development. We're really committed to a full-service type model for this business; this is not a sideline business for us; this is something that is very core to the future success of our organization and it is great to have the opportunity to partner with our customers to create opportunities for each of our respective businesses and also to create opportunities for good sound public policy. Q: You've also done a lot to educate the building community, code officials, architects, etc. Why is it so important that these people are aware of the legislation and also why impact/hurricane products are so important? NL: When you have a newly-regulated environment in a state … there is a tremendous learning curve … there are issues on understanding what the products are, what they offer and the appropriate products for the particular zones in which they are placed. So, traditionally we have partnered with building departments, architects, engineers and builders to bring them all together to talk about the issues. We bring in test labs and customers so we can truly have everyone on the same playing field for [understanding] what laminated glass is, what is required, what types of testing are needed and why you don't want to approve a product that has not been tested and rated. [We've done educational events in South Carolina and along the panhandle of Florida] and now we're planning events for Louisiana as a follow up, because they really don't know a lot of what's in these codes. It's a difficult jump to make for them. It is an opportunity for our customers to have direct communication with the people who are going to be approving those products, as well the people who are going to be specifying them. That way we can short cut the process and all of the painful learning. For example, [there was an instance] in South Carolina in which windows were being approved that were not truly tested nor rated for the wind speeds of [the areas] in which they were being installed. The building officials and the inspectors would have to go out and say, "OK you've got an option because they [the windows] don't meet code. Either you're going to have to replace them or you're going to have to put plywood shutters over them." So it [education] helps to avoid all the re-work that goes on out there. Our customers work really hard and spend a lot of money testing. We want to make sure they can get to market with ease. Q: Last November Louisiana adopted the 2003 IRC and IBC. I know that Solutia was very involved in this project. What was challenging about it; were you faced with any resistance or opposition? How did you overcome that? NL: We worked with the state organizations for engineers, architects, building officials, local governments, builders and the insurance industry to form a coalition behind the concept of a statewide building code. We helped to draft a bill based on everyone's needs and then met frequently prior to and during the session with the coalition and various legislators to address questions and concerns regarding implementation. Initially, many of the organizations were opposed to this legislation, but by working through their issues one by one, we were able to establish general consensus. Q: Solutia has also partnered with other companies and customers to get the word out to the industry about the changes in codes. What are some of these projects? NL: Solutia is partnering with various customers and sponsored educational seminars in Louisiana during the month of April for the building officials and inspectors, architects and builders. These seminars included designing, permitting and building to the wind provisions and opening protection criteria as required by the IBC and IRC along with live impact demonstrations of laminated glass. Q: What are some things you see on the agenda for the future? NL: This new law in Louisiana will make sweeping changes throughout the state. I am sure there will be attempts during the upcoming regular session to modify the new law. Additionally, Solutia is currently working in Mississippi and Alabama toward similar ends with the codes. Mississippi's HB 1406, as passed by the Senate, is now in conference committee with the House where they will decide how far down the road toward a state code they are willing to go. However, both chambers agree that codes are needed immediately along the coast, so it looks like at least the coastal counties will be enforcing the 2003 IBC and IRC by the end of 2006. Alabama's SB 525 calls for updating to the 2003 IBC and IRC throughout the state with immediate enforcement in the coastal counties in 2006 as well. SB 1336 in Florida gives the authority back to the Building Commission to redraw the wind-borne debris region in the panhandle and was voted out of committee [recently] with an implementation date of no later than May 31, 2007. With any luck, most of the rebuilding in the heaviest hit areas from Hurricanes Ivan, Katrina and Rita will be built back stronger and safer and to current hurricane-resistant standards with no minimizing of the codes. Q: I know that in the past Solutia has had to deal with some environmental issues. Does the company have any plans to take on any environmental issues the way it has taken on the hurricane codes and building legislation? JQ: Those environmental [issues] for Solutia … significantly impacted the company … but were related more to Monsanto, our former parent company and not our current business. It is our fundamental belief … [that we] operate in a way that prevents [such] environmental issues from occurring. We have no specific government affairs issues, but certainly want to reach out to the environmental [community] on both a state and national level to highlight Solutia as truly being a steward of the environment. Linking Federal Dollars to Statewide Codes Solutia has been working with United States representatives and senators to tie statewide model-building codes into the Stafford Act. Better codes allow buildings to withstand natural disasters, thereby saving lives and property, and ultimately billions of dollars in federal, state and local rebuilding costs. The company is currently seeking to amend the Stafford Act to provide "bonus" funding for states that choose to include statewide model building codes (and related inspection and enforcement measures) in their mitigation plans. It is expected that this additional funding will encourage states to adopt new Enhanced Mitigation Plans with statewide model building codes, and to strengthen buildings to withstand future disasters. Ellen Giard is a contributing editor to DWM magazine. © Copyright
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