Volume 8, Issue 5 - September/October 2006

AGRReports
B
reaking News

LEGAL
Ruling in Diamond, Safelite Case 
On July 31, Judge James Munley of the United States District Court for the Middle District of Pennsylvania issued an order granting in part and denying in part both parties’ motions for summary judgment in the lawsuit by Diamond Glass Companies against Safelite Group Inc.

Mark Smolik, senior vice president and general counsel of Columbus, Ohio-based Safelite Group, pointed out that Judge Munley dismissed all of Diamond’s claims that the telephone greetings and scripts used by Safelite to administer insurance company glass claims are false and misleading. The ruling sent each side jockeying to put their own “spin” on it.

Chuck Lloyd, attorney for Kingston, Pa., based Diamond, countered that, while the court dismissed some of the company’s claims, it did not dismiss the entirety of the claims.

“The court has ruled that Diamond may proceed to trial on its claims that Safelite disparaged Diamond to Diamond’s customers and that Safelite has wrongfully interfered with Diamond’s relationship with its customers and prospective customers,” he said.
But Smolik stated, “Based on the ruling, Diamond faces a significant burden in proving what remains of its claims.” He pointed out that the court also declined to dismiss six of seven Safelite counterclaims against Diamond. The court ruled Safelite may continue to pursue its state law claims against Diamond for commercial bribery, as well as Safelite’s claims against Diamond for defamation, federal false advertising, intentional interference with business relations, unfair competition, and breach of contract.

With respect to the claims that the court dismissed, Lloyd stated, “There are various options available to us and we are examining those at this time. Upon review of the court’s order, we strongly believe that, when given the opportunity to do so, the United States Court of Appeals for the Third Circuit will reverse the trial court and reinstate those claims that have been dismissed.” 

He also pointed out that the court had ruled that Diamond is entitled to seek lost profits as its damages for those claims. “We believe that a jury will ultimately agree that Safelite violated Diamond’s rights and that Diamond is entitled to compensation.”

Judge Says No to Request
A federal judge has denied a request that would have forced Diamond Glass to provide information about the federal investigation it is currently undergoing to Safelite Glass Corp., according to local press reports.

Attorneys for Safelite had petitioned to question Diamond officials about the December search by the Federal Bureau of Investigation of the company’s offices, arguing that the information was important to Safelite’s defense of a federal lawsuit that Diamond filed in 2002 alleging that Safelite steered customers away from it.

After the FBI search, Safelite attorneys sought information about the probe’s nature, saying “speculation” within the auto glass trade industry press was that Diamond was being investigated for insurance fraud.

According to a local press report, Safelite attorneys argued that information was important in its defense of the suit because, if Diamond engaged in insurance fraud, it would impact the company’s profits and thus the amount of damages it allegedly sustained. However, U.S. District Judge James Munley sided with Diamond saying Safelite’s argument that release of the FBI information “may uncover information” relevant to the case is not sufficient, particularly since no charges have been filed.

FINANCIALS
PPG Glass Sales, Profits Up
PPG Industries Inc. reported higher glass sales and profits for the second quarter and the first six months of this year.

Overall, the Pittsburgh-based company reported record sales and earnings for the second quarter with net income of $280 million and sales of $2.82 billion, surpassing the old record set in the second quarter of 2005 by 6 percent. For the first six months of 2006, PPG recorded net income of $464 million on sales of $5.46 billion. 

For the first six months of 2005, PPG recorded net income of $326 million. Sales for the first half of 2005 were $5.15 billion.

LEGISLATION
Louisiana Licensing Bill Dashed
Legislative efforts that would have required windshield installation technicians in Louisiana to be licensed has been dashed in the State Senate. Wayne Turner, owner of Glass Technology in Many, La., put the bill together in the spring and had seen it through to assignment to a Senate subcommittee before industry action—and reaction—took its toll. 

After the proposed legislation was introduced a number of groups worked with Turner to make modifications.

“I never had a chance,” Turner said of the amendments he worked up and was ready to present to the Senate. “I was informed on a Tuesday at 11 a.m. that the bill was being heard at 9 a.m. on Wednesday. I had less than 24 hours to prepare.” 

Upon arriving for the hearing, Turner said he faced a number of representatives from a large chain, including a lawyer and lobbyists. Turner maintains that, with the amendments he had made to it, the bill could have passed into law, had he had more industry-wide support.

Turner explained that the driving effort behind the bill were his belief in industry-wide continuing education and installation; his ultimate goal became to make AGRSS compliance mandatory. 

“Everything now is voluntary and there will eventually have to be a mandatory aspect for the industry …” he said.

INDUSTRY
AGRR Chosen as Official NACE Publication 
AGRR has been chosen as the official auto glass publication of the Auto Glass Expo @ NACE 2006, a new industry venture within the larger NACE show, which will take place November 2-4 at the Mandalay Bay Convention Center in Las Vegas, Nevada. 

The NACE exposition will take place Thursday through Saturday and will host the premier Auto Glass Expo on the show floor. Show hours will be from 10 a.m. to 5 p.m. on November 2 and 3 and 9 a.m. to 3 p.m. on November 4. 

As the official publication, AGRR magazine will be distributed to attendees as they arrive and will create and coordinate the auto glass-related seminars. Auto glass demonstrations will also be arranged by AGRR. The magazine also announced that it is locating the Auto Glass Technician Olympics event on the NACE show floor. The Olympics is co-sponsored by the Independent Glass Association (IGA). (See in-depth articles on Auto Glass Week, which combines four events in Las Vegas, starting on page 46.)

The NACE Auto Glass Expo program will be produced and printed by AGRR magazine and the magazine will be distributed to NACE attendees.

“AGRR, the magazine driving the auto glass repair and replacement industry, was the ideal selection for our official publication of the Auto Glass Expo @ NACE 2006,” said Ellen Pipkin of NACE. “We know what a following the publication holds within its industry and we look forward to offering it to our attendees and combining the talents and expertise of both of our staffs.

“We are pleased to have the opportunity to work with NACE on this innovative idea, the Auto Glass Expo, within the NACE show,” stated Debra Levy, publisher of AGRR magazine. “As the official auto glass publication we look forward to reporting on the show’s exhibitors, the NACE seminars and the educational and networking opportunities for all those involved in aspects of the automotive industry.”

MERGERS AND ACQUISITIONS
NSG Completes Acquisition of Pilkington 
Nippon Sheet Glass Co, Ltd. (NSG) has completed its acquisition of Pilkington plc.

Under the terms of the acquisition, Pilkington remains the primary brand name and logo for the new flat glass business. No disruption to operations worldwide is expected and the current Pilkington management continue to run the Pilkington business. 

Given the lack of overlap between the two companies, NSG has said there should be minimal need for any job cuts as a direct result of the acquisition. 

“NSG with Pilkington produces a world leader of scale in the global flat glass industry. Employing 36,000 people, the enlarged company will have annual sales of around £4 billion ($7.4 billion), manufacturing operations in 26 countries and sales in over 130, with ownership or interests in 50 float glass manufacturing lines worldwide and a widened automotive customer base,” said Yozo Izuhara, chairman and chief executive officer of NSG, commenting on the acquisition.

“I am excited about Pilkington’s future as part of the NSG Group. The new combined company is a global leader in glass. Our joint technological strength, innovation and global reach mean we are well placed to grow profitably and to service and develop our customer base in all major markets worldwide,” said Stuart Chambers, group chief executive of Pilkington.

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