July/August  2001

AGRReports
   
Breaking News

LEGAL 

ITC Issues Preliminary Report 
on Chinese Dumping Case

The U.S. International Trade Commission (ITC) released the full document concerning its April decision in the windshield anti-dumping case on May 18, 2001. According to the document, which expounds upon the ITC’s determination that “there is a reasonable indication that an industry in the United States is materially-injured by reason of imports from China of automotive replacement glass windshields … that are alleged to be sold in the United States at less than fair value.” The case, which was originally filed in late February by Pittsburgh-based PPG Industries Inc., Columbus, Ohio-based Safelite Glass Corp. and Minneapolis-based Apogee Enterprises Inc., now goes to the Department of Commerce, which will need to determine if the dumping is actually occurring, and if so, to what level it is occurring. (See May-June 2001 AGRR, page 4.) This will be the final phase of the investigation.

In accordance with the Tariff Act of 1930, the ITC cited the following as reasons that there is a reasonable indication that the domestic AGR industry is materially-injured by imports from China: conditions of competition, volume of subject imports, price effects of the subject imports and impact of the subject imports. Under conditions of competition, the ITC explains that in its investigation, it found that the imported windshields from China and domestic windshields are of the same quality and are “highly-interchangeable.” Likewise, the Commission found that the industry is price-competitive and that during the period examined, 1998 through 2000, imports increased both by quantity and value.

In addition, the ITC found that the market share of these importing companies from China rose from 2.9 percent in 1998 to 4.7 percent in 1999, and then to 8.0 percent in 2000. At the same time, U.S. producers’ market share declined from 55.5 percent in 1998 to 48.0 percent in 1999, and then to 43.0 percent in 2000.

In regard to price effects of the subject imports, the Commission found that in all 56 comparisons it reviewed, the subject imports had been undersold by Chinese companies, with margins of underselling ranging from 5.4 percent to 72.5 percent. However, the ITC found “no clear trend during the period examined, with prices rising for some products and declining for others.” The ITC adds, “Although the record is limited at this stage of the proceeding, we find, based primarily on the evidence of significant underselling by subject imports, the high degree of substitutability between the domestic like product and subject imports, and the shift of market share from the domestic like product to subject imports, that subject imports are having significant negative price effects on the domestic like product.”
The ITC notes that it did not include the insurance market of auto glass replacement, because it found that “this large segment of the ARG market is effectively insulated from price competition from subject imports.”

In reviewing the impact of the imported windshields from China on the U.S. industry, the ITC found that “virtually all indicators of the condition of the domestic industry worsened during the period of investigation.” Domestic production, net sales and the U.S. manufacturers’ market shares all decreased during the period examined, while inventories increased, the ITC said. The document also cites the closings of two of the companies’ plants during the time examined and the filing of Safelite for bankruptcy during this period.
The Department of Commerce is now selecting a similar investigation to determine if the imported windshields are being dumped, and if so, the level to which the dumping is occurring. The release of its preliminary determination is expected sometime this summer. If the Department of Commerce affirms that the dumping is occurring and that it is to a significant level, the matter will return to the ITC, which will then conduct a full-fledged investigation of the matter. 

SAFETY
NHTSA Proposes Protective Sidelites be Included in Global Safety Regulations
The National Highway Traffic Safety Administration (NHTSA) is recommending that side-impact protection, including that in sidelites, be covered by the global motor vehicle safety regulations. The proposal is part of a United Nations agreement to establish global technical regulations regarding the safety of motor vehicles. The global regulations would create standards for the world, but would not deny individual countries from maintaining more stringent rules. The European community, Canada, Japan and the United States have already signed the agreement, and South Africa and the Russian Federation are expected to join in the near future. The nations who sign the agreement will meet later this year to name their priorities in developing the global regulations.

MANUFACTURING
Southwall Gains Approval on New Film Production Machines, PM8 and PM9
Palo Alto, Calif.-based Southwall Technologies Inc. has reported its new production machine, PM8, which is used in the production of the company’s automotive film, has been approved by all of its major customers in Europe. The company has now shipped more than $2 million worth of automotive XIR® film from PM8 to OEM automotive glass customers in the first quarter of 2001. The PM8 is the first of an array of innovative machines the company plans to launch from its Dresden, Germany, facility, which officially opened on June 30, 2000.

“We are pleased that both Saint-Gobain and Pilkington plc have performed quality audits at our Dresden plant and have approved PM8 and the new plant for supply of quality XIR film for their automotive glass applications,” said Wolfgang Heinze, vice president for Southwall Europe Gmbh. “The machine and our new operating staff are performing well and are ahead of our plans for ramping up production. We are confident that we will continue to improve the yields and throughputs, allowing us to meet our production targets in our first year in operation.”

In addition, the company began producing and shipping commercial quantities of its XIR films in early May from its PM9 machine. The film also was manufactured at the Dresden plant and shipped to France. The PM9 was scheduled to begin production in the third quarter, but the company began production on it early.

“We are very pleased to be producing XIR ahead of schedule on PM9,” said Thomas Hood, president and chief executive officer. “Together with the successful start-up of PM8, which has now produced more than 5 million square feet of automotive XIR in 2001, this is an important signal of our ability to grow our production to meet the near-term needs of our automotive glass customers.”

In addition, the company announced on May 24 that its July 2000 desert test of the film, conducted in conjunction with Dearborn, Mich.-based Visteon Corp. and the U. S. Department of Energy’s National Renewable Energy Laboratory was successful. According to a news release issued by Southwall, the tests showed that the transparent, infrared reflecting film “significantly reduced temperatures and would exhibit approximately a 3-percent improvement in fuel economy, compared to the control vehicle equipped with standard tinted glass, if the air conditioning compressor capacity was reduced appropriately.” The test included wind tunnel evaluations at Visteon’s facilities in Michigan and road tests in Phoenix. The test was conducted with a North American luxury sedan.

CONSOLIDATIONS
Safelite Consolidates Corporate Offices into One Facility

Columbus, Ohio-based Safelite Glass Corp. centralized its corporate locations at 2400 Farmers Drive in Columbus in June. All employees at the company’s 1105 Schrock Road location will move to the consolidated facility, which will occupy 3 floors and will house more than 600 employees.

“It has always been Safelite’s desire to have all of our corporate functions in one location, but space availability and the cost of moving our complex data center has made this almost impossible,” said John Barlow, Safelite president and chief executive officer. “When the major tenant at 2400 Farmers Drive announced its plans to vacate, the timing was coincidental with the expiration of our lease on the Schrock Road facility. This presented us with exactly the opportunity that we had been looking for—to bring our teams together for greater productivity, teamwork and customer service.”

IN FLIGHT
PPG to Manufacture Windshields and Cockpit Windows for Embraer 170 and 190
Pittsburgh-based PPG Industries Inc.’s aerospace transparencies business has been awarded a multi-million dollar contract from Embraer to design and manufacture the cockpit windows for its new ERJ 170 and 190 regional jetliners. Under the contract, PPG will be responsible for complete design of the main windshields and cockpit sidelites and system integration into the fuselage.

“PPG was able to meet Embraer’s needs in designing a high-performance lightweight all-glass main windshield,” said David France, PPG global sales and marketing manager of original-equipment transparencies.

France added that the contract includes PPG’s worldwide aftermarket support for its products, supplied 24 hours a day, 365 days a year.

The main windshields for both planes will consist of three plies of PPG’s proprietary Herculite II chemically-strengthened glass to meet bird-impact requirements at the lightest weight. The cockpit sidelites will be made from two plies of acrylic with an optional acoustic lite. The windows will be manufactured at the company’s aircraft transparency plant in Huntsville, Ala. Deliveries are expected to begin by mid-2002 for the ERJ 170 and late-2003 for the ERJ 190.

The company was awarded a similar contract several months ago to manufacture the original-equipment transparencies for Seattle-based Boeing Commercial Airplanes’ supply its aircraft cockpit windows and landing light lens assemblies until the year 2005 (see March-April issue of AGRR, page 9).

ON THE SIDE
P-3 AEW Takes Off with All-Glass Cockpit

The first aircraft with an entirely-glass cockpit recently conducted its first flight from Lockheed Martin’s Aircraft Logistics Center in Greenville, S.C. The P-3 Airborne Early Warning (AEW) aircraft for the U.S. Customs Service (USCS) #7 is a modified former U.S. Navy P-3B Orion, retrieved from government storage by the Customs Service for drug interdiction. The glass cockpit incorporates a new flight management display system, which consists of four 6- by 8-inch glass displays to support flight and navigation displays and color weather radar.

Lockheed-Martin expects the new glass-cockpit design to be the wave of the future in flight. “This flight marks a new chapter in the Customs Service’s P-3 AEW aircraft story,” said Tom Wetherall, Lockheed Martin’s USCS P-3 program manager. “This aircraft’s upgraded configuration, with the improved cockpit displays, digital autopilot and state of the art flight management display system makes this the most advanced P-3 cockpit in the world. These improvements make the aircraft easier to fly, easier to maintain and provides the flight crew with a heightened awareness of the aircraft’s tactical situation.”


COMPANIES 
AP Technoglass Acquires Rights to Research Frontiers’ SPD Glass
AP Technoglass of Florence, Ky., has acquired a non-exclusive license from Research Frontiers Inc. to manufacture and sell its suspended particle device (SPD) sunroof glass for use in variable light transmission sunroofs. In a technology very similar to Pittsburgh-based PPG’s electrochromic glazing, in which glass changes colors at the touch of a button, the darkness of an SPD sunroof can be adjusted either by turning a knob or at the flip of a switch. The SPD technology is inhabited by a thin piece of film inside the sunroof glass, developed specifically for this purpose.

“SPD technology offers the most effective solution for the need to control glare and solar gain within the vehicle as the percentage of glass incorporated into the roof of a car or truck increases,” said Douglas D. Nouse, vice president of business planning for AP Technoglass. “We look forward to working with Research Frontiers and its licensees to develop and market SPD variable light transmission sunroof glass to our customers in the automotive industry.”

Nouse said the company is talking with replacement companies currently to determine whether the product will be available as an aftermarket add-on and expects that it will. He anticipates that the company will finalize its plans for offering the SPD sunroof glass to the aftermarket arena within the next four to five months.

“We think it will be a neat product for the automotive industry,” Nouse said. “It won’t be in every car, but from the specialized standpoint, there are a lot of options.”

FINANCIAL
Boyd Autobody and Glass Releases First-Quarter Financial Results

Boyd Autobody and Glass of Calgary, Alberta, has announced that its financial statement for the first three months of 2001 reflects net earnings of $1.1 million, an increase of 49 percent over the $0.7 million reported for the same period last year, according to a news release issued by the company. Earnings per share rose to $0.074 for the period, compared to $0.051 in 2000, reflecting earnings per share growth of 46 percent.

Sales for the three-month period increased 64 percent to $33.7 million from $20.6 million for the same period of last year. The company says it expects to achieve sales of $133 million for the year. In addition, Boyd’s earnings before interest, taxes, depreciation and amortization (EBITDA) increased to $3.4 million for the first quarter, compared to $2.4 million last year, a 44-percent increase.

“We have made significant progress toward achieving our year 2001 goals in the first quarter, including growing revenues, earnings and earnings per share,” said Terry Smith, president and chief executive officer for the company. “We remain focused and committed to our business plan and are confident that we will continue to deliver enhanced shareholder value.”

Boyd’s First-Quarter Financial Results
(in millions of dollars)

  2000 2001 Percent Change
Net Earnings 0.7 1.1 49 percent
EBITDA 2.4 3.4 44 percent
Sales 20.6 33.7 64 percent

 

Diamond Triumph Achieves Record Sales for 2001 First Quarter
Diamond Triumph Auto Glass of Kingston, Pa., has announced that its net sales for the three months that ended March 31, 2001, increased by $5.3 million, or 11.9 percent, to $50 million. For the same period of last year, the company’s net sales totaled $44.7 million. Diamond Triumph’s EBITDA for the first quarter of 2001 increased by $1 million, or 18.2 percent, to $6.5 million, from $5.5 million for the first quarter of 2000.

“We are very pleased that we have maintained the strong sales and earning growth experienced in the calendar year 2000 in the first quarter of 2001,” said Richard Rutta, co-chairman and co-chief executive officer of the company. “Our first quarter results represent a record first quarter sales and earnings volume for the company.” Norm Harris, president, echoed Rutta’s thoughts. “We feel our results are a testament to both our employees’ leadership and performance as well as the company’s sound operating structure and strategic approach. Our challenge as a company will be to sustain the positive business momentum we have experienced during the last five quarters,” he said.

IN THE PAPERS
New England Patriot Puts Windshield to the Test
Windshields were subjected to a new test in March, when a New England Patriots’ lineman decided to punch one because he did not like the way a motorist was driving. The 310-pound tester, Adrian Klemm, was ordered to perform 50 hours of community service and pay $455 to the man whose car window he punched March 7 and $200 in court costs. He was charged with malicious destruction of property. No one was injured in the man-versus-car skirmish.

According to an Associated Press (AP) report, Klemm told police that the driver whose windshield he was charged with striking, Dana Hooker, was braking repeatedly, forcing him and other drivers to slide on an icy road in North Attleboro, Mass. Hooker told the AP that he was waiting for traffic to pass when Klemm’s car blocked the road and the player hit his windshield.

Auto Glass Specialists Celebrates 40 Years in Business
Auto Glass Specialists of Madison, Wis., is celebrating its 40th year in business. Robert Birkhauser serves as president and chairman of the employee-owned company, which began as a one-shop family business and has grown to 64 stores throughout Wisconsin, Illinois, Minnesota, Michigan, Iowa and Indiana.

Birkhauser’s parents, Robert and Bette Birkhauser, founded the company’s first shop in 1961, with their personal savings and a loan from an investment group.

Now known as the “guys in the little red trucks” throughout the Midwest, the company also began AEGIS Tools International LLC, which offers an array of auto glass repair and replacement tools, and the Performance Achievement Group, an auto glass training school.

 

BRIEFLY...

Autolive Automotive Safety 

Products has introduced a new testing system for airbags, which is designed to make sure that windshields stay in place in the event that the airbag is set off …

 

KUDOS
AGRR™ Magazine Wins Prestigious National Award

AGRR magazine has been awarded the American Society of Business Publication Editors (ASBPE) award for Best New Magazine of the Year. AGRR won both the regional award for the Eastern part of the country (which includes Washington D.C. and New York City) and the National Award for the entire country. The magazine was honored during the ASBPE eastern awards dinner in Washington, D.C., on June 1, and at the national awards dinner in Boston on June 21.

“The Society’s awards are extremely competitive,” said ASBPE national president Paul Heney. “This year, we had more than 2,500 entries … Our judges are experienced business editors designers, consultants and academians. They do a thorough job of reviewing every entry based on comprehensive professional-level criteria.” 

“I am trying to sound nonchalant about this, but I can’t, because in reality I am so excited I want to shout,” said AGRR publisher Debra Levy. “It’s a major honor for AGRR and for the people who work so hard on it.” Levy said that the award is especially exciting because it recognizes the whole publication team. “Unlike other new launches, everything from editorial development to the design and look was all developed by our staff internally,” she said, “and that is very unusual in magazines today.”

“A lot of people deserve to be recognized for this award—the columnists, authors, advertisers and readers who have supported the magazine,” she said, “and especially recognize editors Tara Taffera and Les Shaver, art director Marcia Malinowski and our sales staff for their work on the development of AGRR, along with editor Penny Beverage, art director Jennifer Moldovan and advertising coordinator Janeen Cipriani who also work on the magazine now.”

Launched in January 2000, AGRR magazine is the most widely-circulated auto glass magazine in the world. It includes news and information about auto glass repair and replacement along with information about OE glass. In less than one year, AGRR has taken the number-one position among auto glass publications in every area. 

AGRR is published by Key Communications, Inc., publishers of USGlass, Door & Window Maker, and Window Film magazines, among others. Key also provides information services to the glass industry through its Glass Expos USA™ programs and manages www.glass.com ™ on the World Wide Web. 

AGRR

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