FXGuide Interviews Digital Domain CEO

Last week Digital Domain CEO John Textor conducted an interview with FXGuide’s Mike Seymour on the DDI controversy. Here’s his email to employees. Variety’s David S. Cohen comes to his defense. The VES released a statement and it sort feels like a slap on the wrist that turns into a pat on the back.

On the other hand, The Animation Guild and Cartoon Brew both refer to the response as a basic non-apology apology: He’s sorry for what he said and while he’s clarified and back-tracked on his original intentions, he is still going forward with plans to utilize student work on production. In the end, who verifies that all of this follows labor law?

As an FXGuide commenter pointed out, the federal rules on this are pretty simple. Here is one snippet:

The employer that provides the training must not derive any immediate advantage from the activities of the intern

The Broken System

However the purpose of my piece was to point out the much larger problem for the VFX industry. As VFX NYC pointed out in his post, Mr. Textor acknowledges the core VFX work-for-hire system is dead and I agree.

Many attempts to try to transition out of that system without fixing the core problem have been done before. Rhythm has done co-productions. Imageworks has tried military simulation and while we all wish these are solutions, the latest attempt by DD is a bit incoherent to me.

In the interview Mr. Textor says the VFX industry is broken with jobs all going to India and China. He argues against diploma mills like Full Sail charging 100k in tuition and resulting in no jobs for graduates. Yet DDI is really no different. It’s going to charge and train students in VFX where they will graduate and apply for work in an industry that in his view will have no jobs for grads because it’s all going to India and China.

In the same interview he expresses reluctance to go to places like India because of quality issues. Other facilities owners have also agreed that chasing work to cheap locations is not the solution. Look, if the solution was going to India and China it would’ve happened long ago. At what point do we acknowledge it’s not going to India and China. It’s going to locations with huge subsidies.

He also admits that they don’t save any money from subsidies and cheap labor as the client demands it. He expressed interest in the US taking a stronger stand on trade issues. A few facility owners have expressed interest on this. Why not join forces on this lone issue and take it to the USTR?

Scott Ross had advocated for the formation of a trade organization yet it seems no one has called him back. In the interview Mr. Textor says the VES should be fixing these problems. Look if the recent events are any indication of how the VES intends to fix the industry then members need to stop giving that organization money. It’s becoming a hinderance to fixing industry problems.

People have said this industry needs leadership and I agree but it’s also missing something very simple: stewardship. You have to give Mr. Textor a lot of credit for admitting he was wrong and allowing himself to be available to questions. I think its great that Mr. Textor is offering staff positions to employees but even companies with the most successful track records like DreamWorks Animation hire on a project basis.

At the end of the day all we can do is “trust but verify”.

Soldier On.

Previous posts on this issue:

The “Paying To Work For Free” VFX Business Model

Questions And Reactions: Paying To Work For Free

LA Times Report On Digital Domain Institute

DD CEO John Textor: “Free Labor Is Much Better Than Cheap Labor”

 

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57 Responses to FXGuide Interviews Digital Domain CEO

  1. Pssst says:

    Just another example of american corporate culture trying to work out how they can continue to ‘exploit’ labor in an age of global ICT and the Chinese controlling the WTO

    ‘‘The government does need to look at the digital economy as manufacturers’’
    http://www.brisbanetimes.com.au/digital-life/smartphone-apps/developers-show-business-some-serious-apptitude-20120417-1x5m1.html
    http://www.theage.com.au/national/get-tough-on-china-unions-20111002-1l3zp.html

    How long before first world governments realize that propping up middle class, ‘national culture’ media industries with tax payers money (subsidies) is futile in a time of global media sharing? The Indians and Chinese understand this.

    http://bigamericanfilms.com

    • Pssst says:

      http://www.awn.com/news/business/iron-man-3-production-heads-china

      The third industrial revolution
      The digitisation of manufacturing will transform the way goods are made—and change the politics of jobs too
      Governments have always been lousy at picking winners, and they are likely to become more so, as legions of entrepreneurs and tinkerers swap designs online, turn them into products at home and market them globally from a garage. As the revolution rages, governments should stick to the basics: better schools for a skilled workforce, clear rules and a level playing field for enterprises of all kinds. Leave the rest to the revolutionaries. http://www.economist.com/node/21553017

    • Pssst says:

      Indeed, that brings me to the larger issue consumers should keep in mind. I understand that more people, especially those under 30, believe that the advent of the internet ushered in an era of “information is free”, that anyone can be a “writer” and, perhaps, the idea of a paid creator is a thing of the past. But, it is a truth that, even in the age of the internet, where we think things are free, some very big powerful corporations are making, and will make, billions of dollars.
      Ultimately, that’s because this is about power. Actors, news writers, screen writers and some journalists make a decent living because unions established basic conditions and marshalled power – the “work for free” virus has spread precisely because millions of creators throughout the world lack collective organisation. That isn’t inherent in what we do – it’s because we’ve failed to get out of our pyjamas and on to the streets.
      What is happening to authors is another example of the bankruptcy of a system some call “the free market”. We have to see that simply as a slogan used by the elite to exploit and intimidate others and then toss a few crumbs back for the rest of us to fight over. In that sense, authors are not a different breed at all and we must stand ready to challenge a system that is a threat to democracy and creativity.
      http://www.guardian.co.uk/commentisfree/2012/apr/23/professionals-work-free-writers-expected

  2. vfxguy says:

    Subsidies, subsidies, subsidies.

    Soldier, honestly, if subsidies ended tomorrow, and all the work came back to LA, do you really think the lot for the average vfx artist would be any better? Do you really think studios will start paying more for their shots just out of some sense of patriotism?

    Studios have continued, and will continue to pressure the price down and there will always be shops willing to undercut others to get the work. When all the work does come back to LA and dozens of small shops open up to pick up the scraps the big boys drop for them, how well do you think they’re going to treat their employees? How many of those places will provide transferable healthcare, or retirement plans?

    By all means go to the WTO and get subsidies ended (because after all, hundreds of trade law experts agree with you), but you’d better make damn sure the industry’s unionized before that happens or all of us who are coerced to move back to California to find a job are not going to be thanking you. That’s right – some of us out here in the wider world have families and hate living in LA.

    As much as I enjoy sniping at you I do admire some of what you’re trying to do. Not having proper health care, not being paid, not being able to find a job, these are problems all of us can relate to. I just think you’re horribly naive and misguided if you think killing the industry in Vancouver, London, Sydney etc. is going to fix any of that.

    • VFX Soldier says:

      Ending subsidies would certainly help.

    • Ashes says:

      If there were no tax incentives, then the Studios would be force to pay for the actual work done. There would be less of a chance to underbid and the Studios couldn’t force US shops to underbid.

      I have been in the industry for over 17 years and have yet to work at a major house that did not give me OT. Even all the small houses were pretty good. If they had problems paying me, I left. My contract states I get paid X and if I don’t get X then it’s null and void. So, I don’t think artists are going to be worse off if the tax incentives are gone.

      No where have I seen VFX Soldier demanding all work to go to LA. He’s demanding fair and ethical business practices to ensure the health of the vfx industry. The current tax incentives are creating an unhealthy industry. They force movement, cause underbidding, and devalue the work.

      Just because tax incentives benefit you does not mean they are good. The WTO has come down on several other undustries for doing what’s happening in our. The only difference is that our industry doesn’t have anyone strong enough complaining about it.

    • JTJR says:

      Coerced into moving back? Give me a break, dude. You were coerced to move out there in the first place. Subsidies screw up the natural market and are a bad idea on so many levels. I

      If you hate living in LA, then why did you choose a career in the movie industry?

      So, you have a family, fantastic. You sound like you feel you are entitled to your dream job in your dream city at your dream pay scale. You sround like a spoiled brat.

      • vfxguy says:

        @JTJR – I have never been coerced into moving anywhere. I work where I do because I like it here.

        You say I “sound like I feel I am entitled to my dream job in my dream city at my dream pay scale”.

        I find it hilarious that you don’t seem to recognize that you’re expressing exactly how I feel about most of Soldier’s posts. It works both ways.

        @Ashes – “If there were no tax incentives, then the Studios would be force to pay for the actual work done.”

        Do you really believe that? If that were the case then Vancouver and London would be getting the same $ per shot as they were when the subsidies came in. That’s not the case. Downward price pressure is not driven by subsidies, its driven by studio accountants and the constant willingness of someone else to work cheaper.

  3. edwardh says:

    I certainly don’t wish anything connected to the military was a solution. I would immediately look for work at another company if mine started doing projects like that.

    But as far as the federal rules are concerned – are they not already violated by unpaid internships?
    Laws are a tricky thing. You don’t need to know much about current events and/or history to realize that there are different unwritten laws for people (and remember… corporations are people…) of differing wealth. And it doesn’t really matter what country you look at – it’s just less visible in rich countries.

  4. !#FSghea$@& says:

    The mind boggles at how idiotic this whole situation is.

    Studios create a system where work must be outsourced to entry-level people who can’t complete the work.

    VFX studios, having bid the project assuming everything will go to plan, are forced to hire senior artists to relocate and complete the work at great expense.

    When they VFX shops complain to studios that they can’t make any money, they’re told to outsource more and hire cheaper labor.

    I think we all know what’s going to happen: these business decisions will fail spectacularly and lose everyone a ton of money, especially local taxpayers, investors and shareholders.

    The executives who made these decisions will shrug, collect their bonuses and carry on like nothing happened.

    The DDMG deal is like politicians, wall street and hollywood having a creepy, gross love affair in a truck-stop bathroom.

  5. Eric Rosenthal says:

    “The DDMG deal is like politicians, wall street and hollywood having a creepy, gross love affair in a truck-stop bathroom”

    Haha yeah that pretty much sums it up. Textor and his minions aren’t evil; they’re just out to make a buck for themselves and their shareholders and don’t care if the industry gets reemed in the process. Apology or no, what he said in his shareholder speech was probably as close to the truth as we’ll get from him.

    The great thing for DD is that even if the thing fails (come on, students working on features??) they don’t really lose much; they’re playing with Florida’s money and the student’s tuition.

    Between this, the Trevon Martin case, and the George W election, I hereby nominate Florida to change it’s motto to “The Asshole of America State”

  6. jonavark says:

    I have to agree on your point about the VES. Seems impotent to me. unable to deal with anything because of their charter.. what service do they really provide? Save for awards ceremonies?

    • yeah says:

      What I don’t get is, if the VES is saying they can’t do anything because of how they are set up, but they want to change things.
      Why don’t the people within the VES who want to do something, don’t just start a similar seperate group with more authority?
      They wouldn’t necessarily have to break away from the VES, but be in both.

      • VFX Soldier says:

        “Why don’t the people within the VES who want to do something, don’t just start a similar seperate group with more authority?”

        A union.

    • Pssst says:

      VES is just an international supervisors club patting them selves on the back while they poor money into the hands of the studios – why would they want to bite the hand that feeds them?

      • ??? Not sure how the VES is pouring money into the hands of the studios. The VES is similar to the Academy or ASC. Education and honor among other things. Until such time as their is a union we are the largest group of professional visual effects artists. Believe me, the VES is look at all options.

  7. Jason Miller says:

    Um. I’m a Full Sail student. My tuition is no where near 100K. We work in full production environments and are readily prepared for the industry. We have ex-Disney instructors as well. Do all of the students belong here? Of course not, but that doesn’t reflect upon the school’s ability to teach industry standards. Instead, that reflects upon the students lack of passion. We get all the tools and knowledge necessary to be successful, but not everyone puts in the necessary time.

    Everyone seems to be pointing fingers at everyone else but not at the obvious core of the problem. We got too complex too fast and we all pay Autodesk for mediocre software that will never catch up to demand. We literally went from animatronics built by a few people to 200 staff CG monsters over night. Hollywood didn’t know what to do with the increased staff budget and still doesn’t.

    Also, being a student, I’m positive you have to be a complete idiot to think having a name in film credits is worth doing mundane tasks like rotoscoping and 3D conversions for the next Michael Bay disaster.

    • so uh says:

      Jason,

      I respect your enthusiasm for the craft and desire to get involved and make things better. Keep at it.

      You have a lot to learn, though. Especially about tact. The people that do roto and 3d conversion on films as big as MB’s are artists in their own right, much more accomplished ones than you currently are. If you work very hard for another couple years you might get there, but first you should learn some respect for other people’s accomplishments. This is a very small industry and your reputation will follow you.

      You are very naive to think that ‘hollywood’ doesn’t understand the needs of production. They know very well, and are doing everything they can to drive costs down. VFX artists lack the necessary leverage to escape being targets of these efforts.

      Also, many of us don’t use Autodesk’s ‘mediocre software.’ And those of us that do know how to make it work. Your ex-disney instructors can tell you that. Keep practicing.

      Free advice: Ignore “industry standards” in “production environments” and try to become a better artist first. Actually scratch that, try to become a better person first. Your success will be almost completely determined by people’s desire to work with you.

      • Jason Miller says:

        I apologize to anyone I offended. I’m sorry my perspective came off as distasteful, that wasn’t my intention.

        I can see why you’re assuming that I’m a young person whose talents have yet to grow, but that isn’t the case. I’m much older than you think and have been a successful designer for many years. I just woke up one day and thought it would be cool to work in entertainment sector instead of the engineering sector I’m currently in. I don’t need to practice Autodesk software. My comments are valid and come from many decades of resentment from having to deal with Autodesk on a daily basis.

        I don’t consider roto and 3D conversion to be artistic. There comes a time when you have to be creative to solve a problem with a difficult key, but it’s mostly technical. Jobs born out of necessity. The day someone invents a better way to do such tasks or completely automates them these jobs will disappear. John Textor is trying to make these jobs appealing so he doesn’t have to pay for them. “Get your name is movie credits,” is what he’s telling people, when he’s really saying, “We don’t want to have to pay for this technical hurdle if we don’t have to.”

        Same goes for everything else. The entire industry seems to be holding out for simpler times where they don’t have to hire so many people so they can still afford to pay studio execs, producers, directors, and actors millions even if a production is a failure at the box office.

      • Ashes says:

        Jason, you need to stop talking about things you obviously know nothing about. Roto/paint people are artists and have to be creative. Good ones are worth their weight in gold. They work hand in hand with compositors and help greatly with getting shots finished.
        I have no idea what your actual age is, but you come off as an entitled, arrogant 19 year old who thinks they know what happens in an industry they’ve never worked in. I would listen to what So Uh is saying to you. It’s spot on.

    • fizz says:

      Jason, you’ll find that the only way to really learn industry standards is by doing the job, starting at matchmove or roto or some similar entry-level position – this goes for any part of filmmaking whether it’s camera department or craft services.

      Roto, stereo conversions and comparable tasks are far from mundane – they’re labour-intensive and require skill. They’re just not very glamorous. However, any VFX professional will tell you that if those things aren’t done correctly the end result will never be any good, regardless of the time and money spent on it. Whether the work is done in Bengaluru or on the desk next to yours it still has value.

    • jonavark says:

      “We literally went from animatronics built by a few people to 200 staff CG monsters over night. Hollywood didn’t know what to do with the increased staff budget and still doesn’t.”

      Actually.. we went from animatronics built by lots of people to CGI staffs of hundreds.. but that actually started in the early 90s.. late 80s. So it wasn’t overnight by any stretch of the imagination

      HA! I am with you on the Autodesk dilema..

      Actually.. having a name in film credits, if you get credited, for doing mundane tasks is the real world. Welcome to it.

    • Marcus says:

      Lets talk about a task being mundane again after the umpteenth redo of your particle sim/animation/character rig :)

  8. ambertreto says:

    Reblogged this on TNG Visual Effects and commented:
    VFX professionals are creating movement in an effort to organize. Those who can adapt and adjust to impending changes will be the most successful. Will the entrepreneurs please stand up?

  9. Victor Frank Xavier says:

    There are a few points that have been bothering me in the discussion of these issues.

    1. Subsidized locations:
    This has been covered here before, but just to reiterate. No facility receives any extra money, or any financial advantage for being in any particular location. The production company (WB, Fox, Disney et al) gets a percentage of cash back from the local government for sending work to that location.

    The only business reason any of us are opening up in these locations is because the film execs want that free cash, and thus demand that we move our facilities there so they can get it. That’s it. They get the free money, and we get the benefit of still being offered work.

    2. Undercutting:
    Facilities in subsidized areas don’t undercut facilities in non-subsidized ones. (Any more than standard business maneuvering at least.)

    In reality, they are often quite close on price. (Shots cost what shots cost!) However, the studio says to the non-subsidized facility “we get a rebate of 20% for using them, you need to cut your price 20% to have a shot at this work.” That is the real detriment to artists in LA for example, because that 20% they are cutting is pretty much the profit margin for the facility. (If you are wondering why the stable staff positions have disappeared, that’s it. We can’t afford to pay that little extra to keep you around all the time, even though we’d like to.)

    3. Incentive to subsidize:
    Local governments are throwing tax-payer money at film studios (not VFX studios!) to get them to bring the work to their areas. Why? It’s not because they are huge film buffs, or that these productions produce so much benefit to their area. It’s because they are promoting the creation of a local industry.

    Look at London. It is common to say London VFX is the town Harry Potter built. Which is probably somewhat accurate. WB got a sweet deal on some movies, and London now has some of the premiere talent in VFX, and a lasting industry. Vancouver is heading the same direction, establishing a strong and sustainable VFX infrastructure. That’s the point of subsidies.

    The question is… why do they continue to throw subsidy money to the studios once their local area is built up? It’s out of fear that once they stop giving free money, they will get no more work, and all their work building up a local infrastructure will collapse. The film studios love to hint at this outcome to keep the pressure on!

    4. VES:
    I don’t believe the VES will be much help soothing the growing pains of this industry. Any professional guild is made up of three parts: a trade organization (union), an honorary society (VES), and an educational branch (nobody seems to care much about this one, do they.)

    VES is primarily an honorary society, which dips its toe into some light organization, like the bill of rights it released. It is not designed to lead any efforts, and is only barely functioning outside of its Summit and Awards events.

    And finally, the VES is chaired by Jeff Okun, who is himself running an indian VFX studio. Which kinda makes it a conflict of interest for him to then lead any effort to slow or turn around the runaway VFX production problem, doesn’t it?

  10. Hey Soldier, long time reader, first post. I bring the London perspective to all this and gotta say… I like what you’re doing. I

  11. Hey vfxsoldier,

    Long time reader, first post. I bring the London perspective to all this and gotta say… I like what you’re doing. It’s a shame some fellow vfx artists here in Soho are so knee-jerk in their criticisms of your “California-centric” approach. Thanks for this platform which has become a few notches better than all that bitching we used to do on vfxhell. Hopefully we can use it to fix what’s broken. It’s already happening.

    Cheers

  12. @vfxguy: I don’t know. How can you know that? Is there precedent? We all saw what happened in New Mexico, but we are not New Mexico. Vfx in soho are big business. We can handle tentpole features. I’m not denying the subsidies are quite an unfair advantage for us — and BC etc. — and so can understand California artists’ frustration. But thanks to that advantage, industry here is now sufficiently advanced such that I think it would not be disaster if they were to disappear. And really, if we’re to be completely honest with ourselves, we would be making a gross error of judgement if we didn’t prepare for that inevitability. The rug will be pulled out from underneath. It’s just a question of “when?”

    Bottom line: I want us to be able to bid for work on our own merits and not get an award thanks — in large part — to a 30% tax break. It doesn’t feel good.

    • vfxguy says:

      I have no doubt that London can compete on quality and price, but it’s not really a level playing field. Imagine you’re a hollywood vfx producer, deciding where to put the work. DD, Sony, Dneg and Framestore have all put in similar bids (because there’s no tax break any more). Do you go with the company that’s 8000 miles away with which you have to manage all the feedback by cinesync or pay extra to hire a production office in London? Or do you go with the facility where you can stop at your favorite coffee house on the way to the review in the morning?

      In order for London facilities to survive in anything like their current state, they’d have to offer studios something they couldn’t get anywhere else. There’s only two facilities in the world that can do that. One’s in SF, the others in New Zealand.

      • VFX Soldier says:

        What you are saying is basically an endorsement that vfx is not a global industry, it’s and agglomerated industry.

        Being close to your client is a market driven advantage. Offering a subsidy that artificializes the price to lure that work to London is a barrier to market economics.

        This is why the WTO has made subsidies illegal and also the reason why the WTO doesn’t regulate “nearsourcing”.

        London has a huge talent base and many filmmakers based there. Why not get away from depending on us studios and encourage your own film industry to grow?

      • xfv says:

        Or, do you want your 1500+ shot vfx tentpole movie split over 10 midsized companies in LA (DD and Sony might be busy?), or split between 2-3 vfx houses in soho who have proven to be able to deliver shows on time to a super high quality.
        Probably a bit more important than having your regular coffee house nearby.

      • Djfjdbdicjd says:

        @xfv those companies wouldn’t exist without subsidies.

      • fizz says:

        So how do you explain all those shows that don’t get subsidies but still post their work in London, Australia, France, NZ etc? Superman Returns, Man of Steel, Iron Man I&II, Avengers, Thor, Wanted, Where the Wild Things Are, Your Highness, Sorceror’s Apprentice, The Hunger Games, Terminator Salvation, World Trade Center, X-Men 3, Wolverine, Tree of Life, Salt – all films where a significant chunk of the VFX work was created/is being created outside of subsidy programs.

      • Ashes says:

        @londonvfxsoldier, thank you for actually being honest about the tax incentives. I agree with just about everything you have said. I do believe that if the tax incentives went away right now the vfx industry in London would survive fine. The vfx industry is still lacking in senior level talent. Now is the time for the incentives to disappear while it won’t destroy the Canadian and London industry. There’s enough work for everyone. If the tax incentives went away, the studios would be force to pay the actual cost of the vfx shots.

    • fizz says:

      @vfxguy – are you sure that the show you’re working on right now actually qualified for the rebate? BTW: it’s not 30%, more like 18%

      • xfv says:

        @Djfjdbdicjd

        they do exist now, and are all massive companies bigger than most american studios (bar ILM and R&H).
        You are saying that they wouldn’t get any work if there weren’t any tax breaks?
        I don’t think you could get around these places nowadays.

  13. Anon says:

    Mike himself has his students paying to contribute to his short films via vfxphd. I also note his almost… but not quite…inaudible sniggering brag when Textor talked about the profits of training institutions vs the fx industry. Obviously vfxphd is doing very nicely which is why Mike can afford to buy every flavour of new camera and gadget that hits the market. Not a criticism. I applaud his commercial acumen.

    The fact is, those who USED to do, now teach and they get paid a crap load more money for it these days than working in production. Good on them. Teaching people to do what they will never possibly be able to do in the real world has always been big business… thats why the secret was such a best seller.

    VFX courses are the new consumer widget. Sell away.

    • I agree with Anon on Mikes Background but give the Man kudos for a) asking Textor some hard questions employees did not dare or care to ask and b) fully disclosing his educational interest as soon as Textor stared to tackle that topic.

      I dont think its wrong to charge for education. I think your ethics need to be finetuned to not just be a for profit school like scad, fullsail etc. How many people actually flunk these? Churning out vfx workers by the hundreds is only hurting this industry but if you had told me that 10 years ago I would have laughed at you too and continued my filmschool.

  14. The VES can’t fix these issues, only the big FX houses can. The VES is registered in a way that legally prohibits it from becoming a union.

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