Vitro America Enters into Asset Purchase Agreement with
Private Equity Firm
Vitro America LLC in Memphis, Tenn., and three other U.S. indirect
subsidiaries of Mexican glassmaker Vitro S.A.B. de C.V., filed a motion
for relief under Chapter 11 in early April, and also have entered into
an agreement to sell substantially all of the assets of Vitro America,
including Binswanger Glass, to an affiliate of Grey Mountain Partners
LLC, a private equity firm based in Boulder, Colo.
The entities involved in the Chapter 11 proceedings and the private equity
sale include Vitro America LLC (of which Binswanger is a part); Super
Sky International Inc.; Super Sky Products Inc.; and VVP Finance Corp.
“Vitro America and Super Sky intend to continue to operate in the ordinary
course as the sale process is carried out,” says Arturo Carrillo, president
and chief executive officer of Vitro America. “Based on the expectation
of continued litigation related to the Vitro SAB bonds, we determined
that a sale of substantially all of the assets of Vitro America and Super
Sky at this time is in the best interest of these businesses, their employees,
and all of their other stakeholders. Despite efforts over the last five
months to mediate or have the involuntary Chapter 11 cases dismissed,
it became apparent that Vitro America and Super Sky would need to be separated
from any litigation related to the legal dispute between Vitro SAB and
the dissenting bondholders so that we could continue to operate in the
ordinary course. Fortunately, Vitro America and Super Sky have a strong
asset base. In addition, Bank of America and Vitro S.A.B have continued
its support of Vitro America and Super Sky throughout this challenging
period and will continue to help ensure that we have adequate funding
and liquidity during the sale process.”
The decision to sell came after a four-month court struggle that started
when four Vitro SAB creditors, unhappy with a debt settlement offer, had
filed a petition for involuntary bankruptcy in November 2010 against 15
of Vitro’s U.S. subsidiaries, including Vitro America. Just before the
asset sale came about, a hearing had been held during which the creditors
urged a federal judge to place Vitro America and the other subsidiaries
involved into bankruptcy; the judge handling the case had not yet made
a decision when the asset sale was announced and the requests for relief
were entered into the court.
The transaction is subject to bankruptcy court approval and other closing
conditions specified in the agreement. In compliance with Section 363
of the U.S. Bankruptcy Code, qualifying bidders will also have an opportunity
to submit higher and better offers for evaluation through a court-supervised
competitive bidding process.
Sale of Carlite Aftermarket Business to Carlex Completed
The sale of Zeledyne’s Nashville glass plant and its Carlite aftermarket
automotive glass distribution operations and business to Carlex Glass
America LLC, a subsidiary of Central Glass Co. Ltd., was finalized in
April, according to separate announcements from both companies. Financial
terms were not disclosed.
The facilities included in the sale included both the Nashville auto glass
manufacturing facility and the company’s Carlite distribution center in
Lebanon, Tenn., and the Carlite brand, according to Zeledyne spokesperson
The acquired operations join Carlex Glass Co., which produces automotive
glass for original-equipment and replacement applications in Vonore, Tenn.,
as subsidiaries of Central Glass Co. Ltd., based in Japan. Carlex Glass
America and Carlex Glass Co. will be known in the market as Carlex.
The purchase provides Carlex with the “ability to manufacture automotive-quality
float glass,” according to Masami Wakatsuki, Carlex Glass America president.
The company previously did not have the ability to manufacture float glass,
according to Carlex spokesperson Jean Verlich.
“Carlex identified a business opportunity to expand its customer manufacturing
base and to provide an internal float glass supply,” she adds.
Company officials also felt the “the transaction [would] provide longer-term
stability to the Nashville plant,” according to Verlich.
For Carlex customers, it should be business as usual on the distribution
“Customers should see no change, since Carlite parts will continue to
be available in the normal range of windshields and tempered parts through
Carlex,” she adds.
With the acquisition, Carlex becomes the sole U.S. distributor of Carlite®
brand automotive replacement glass.
“Adding the Nashville facility and the automotive replacement glass distribution
operations to Carlex’s business expands our market and customer base and
enhances our customer service, while affording strategic synergies with
our established Tennessee operations,” Wakatsuki adds.
Carlex officials say they plan to maintain an automotive technical center
in the Detroit area.
“Some former Zeledyne employees at Allen Park have already
begun working for Carlex as support staff in this capacity,” says Verlich.
“They will relocate to a Carlex technical center once it is established
in the coming months.”
With the completion of the sale, Zeledyne now has about 550 employees
at its manufacturing plants in Tulsa, Okla. and Juarez, Mexico, and offices
in Allen Park, Mich.
The two companies had announced that they had agreed to the sale earlier
this year (see related story in January/February AGRR™ magazine, page
Guardian to Cease Operations of Auto & Truck Glass
Guardian Automotive is ceasing operations of its Auto & Truck Glass
Inc. business (ATG), which provides auto glass replacement and repair
services primarily to rental fleets and auctions. Guardian’s principal
automotive operations (original equipment automotive glass, aftermarket,
and retail replacement businesses) are not affected, according to a company
“Guardian is all about maximizing business opportunities for the benefit
of our customers as well as achieving profitable growth for our company.
As is well known, customers continue to consolidate—and excess capacity
in this segment is the rule of the day,” says Mike Morrison, president
of Guardian Automotive. “Furthermore, competitive pressures in certain
parts of the auto glass business have driven prices below a breakeven
point, an untenable and unsustainable way to do business at Guardian.
So we made the prudent and proactive business decision to improve our
competitiveness in this segment. We will continue to serve the auto glass
replacement industry through our Guardian Auto Glass facilities throughout
With regard to ATG’s fleet contracts, Guardian spokesperson Earnest Thompson
advised “no contracts are being transferred from one entity to another.”
“We’ll be exploring the business case for each relationship based on its
own merits,” he adds.
When asked if there are further changes planned, and if new Guardian locations
will be added as a result of the ATG closure, Thompson advised, “We continue
to assess new regions for Guardian Auto Glass locations but such decisions
will be based on the business opportunity for a particular region rather
than factors such as the ATG divestiture.”
ATG has 26 locations and 48 full-time employees in the United States.
The corporate office is located in Mission Viejo, Calif. The company was
founded in 1990.
At press time, the closure was expected to be completed by the end of
Cerium Oxide Shortage Impacts Auto Glass Production, Scratch Removal
The growing shortage of cerium oxide is impacting at least two segments
of the auto glass industry, according to industry sources. Cerium oxide
is one of the many rare earth elements recently reported to be in short
supply, due to shrinking exports of such elements coming from China.
Glass Technology president Kerry Wanstrath, whose company manufactures
one of the scratch removal systems that uses cerium oxide, says that,
as the shortage has grown, he’s seen the price fluctuate sporadically
over the last few months.
“We experience a price increase sometimes weekly,” he says. “It’s really
out of control.”
Wanstrath says it’s up to manufacturers to try to assess the market appropriately.
“You’re walking a very delicate path between making sure you have ample
supply and not buying the product at the peak of the price hikes,” he
says. “It’s very hard to control your inventory when a month goes by and
the price has doubled and you are told you can’t even get it.”
China is the major source for the element. “There are only a few companies
in the United States where we can even find it,” says Wanstrath. “I think
most everybody gets it in one way or another from China.”
In addition to the use of cerium in scratch removal materials, it also
is used in the float glass process. Guardian Automotive officials say
they’re watching the issue closely on the manufacturing side.
“There are certainly challenging cost pressures within the supply chain—a
fact of business life that all manufactures are grappling with today,”
says Mike Morrison, president of Guardian Automotive Glass in North America.
“At Guardian, we are committed to meeting customer needs with quality
products even as we balance escalation in raw material costs. So we are
looking at the best ways to address this issue. At the end of the day,
however, we also are about running a profitable business. We are watching
this situation very closely.”
Others are watching as well.
“It’s a serious issue—getting this,” said Jim Ventre, director of truckload
sales for Vitro America, during a recent industry meeting. In fact, the
Glass Association of North America’s (GANA) Mirror Division has formed
a task group to look at the issue, as cerium oxide also is used for both
glass polishing and cleaning glass before it is silvered for mirror production.
PGW Invests in Plants in North Carolina, Michigan
Pittsburgh Glass Works LLC (PGW) announced in April that it is planning
to open a new North American manufacturing facility in Elkin, N.C., next
year. Company officials attribute the need for the new plant to “a continued
increased demand for auto glass products.” In March, the company also
announced that it would re-open its plant in Evart, Mich.
According to a company statement, for the new facility, PGW plans to convert
an existing 416,000-square-foot manufacturing facility into an auto glass
plant with an investment of more than $85 million. The facility is located
on 58 acres in Elkin.
PGW officials say they plan to begin hiring for the facility in 2012 and
that the plant will employ more than 260 associates when fully operational.
“The Elkin facility will be a state-of-the-art operation that enhances
our current customer delivery, increases our manufacturing capacity and
provides flexibility within our manufacturing operations,” says James
D. Wiggins, PGW chairman and chief executive officer.
The Elkin facility will produce both OEM and aftermarket glass, according
to a company statement. It will begin with tempered parts and eventually
make windshields as well.
The Evart plant is scheduled to re-open in the third-quarter of this year,
also due to increased demand. The Evart facility will manufacture tempered
sidelites for original-equipment manufacturers.
NSG Group to Expand Pilkington Automotive Operations
The NSG Group has announced plans to expand and upgrade subsidiary Pilkington
Automotive’s operations in Poland.
The investment involves the construction of a new auto glass plant at
Chmielow, located in a Special Economic Zone, 30 km south of the Group’s
existing facilities at Sandomierz. The new plant will be dedicated to
the production of windshields, sidelites and backlites for cars and trucks.
Belron Reports 15.6 Percent Increase in External Sales Worldwide for
Belron’s Full-Year Results
(in U.S. dollars)
|Total External Sales
|Total Operating Result
Belron has reported a 15.6 percent growth in external sales for 2010,
when compared with 2009. The numbers were released as part of parent company
D’Ieteren’s year-end financial report.
The company says it achieved total external sales of $3.3
billion U.S. dollars (2.8 billion Euros) during 2010, compared with $3.9
billion U.S. dollars (2.4 billion Euros) in 2009.
Belron’s total number of jobs for the year grew by 9.3 percent—up to 11.7
million from 10.7 million in 2009, according to the report.
Belron’s total operating result was up 12.8 percent—at $324.2 million
U.S. dollars (235.4 million Euros), compared with $287.3 million U.S.
dollars (208.6 million Euros) in 2009.
The company points out that 54 percent of its work in 2010 was mobile
(and 46 percent done in-shop). Replacement jobs comprised 70 percent of
the total jobs, and 56 percent of all jobs were completed in Europe. (A
breakdown wasn’t provided outside Europe.)
Within Europe, the company experienced a 14 percent growth in sales, made
up of 11 percent organic, 2 percent acquired and a positive currency impact
of 1 percent due to the stronger British pound. Outside Europe, Belron
reports sales growth for the year of 18 percent, made up of 5 percent
organic, 3 percent acquired and 10 percent from currency translation.
Belron attributes the increases for the year to “higher sales across the
portfolio of businesses, lower long-term executive incentive scheme costs
and a favorable currency impact and despite higher glass costs due to
supply shortages, higher media costs and adverse market conditions in
Canada and Brazil.”
Auto Windscreens Plans Expansion
United Kingdom-based Auto Windscreens, which is now part of Trifords Ltd.,
a division of the Markerstudy Group, has announced plans to expand from
20 branches to 35 in the next two years under its new ownership. The company
began re-hiring in late March, after having been placed into administration
on February 14 (see related story in March/April AGRR™ magazine, page
Nigel Davies, who has been named manager of the new business, says he
is aiming is to re-establish Auto Windscreens as a major national automotive
“Our new model allows managers in our network complete autonomy, enabling
them to guarantee prompt response times by managing their team of technicians
and controlling all stock requirements themselves,” he says.
Davies also says the company already is seeing benefits from being part
of a larger firm such as Markerstudy.
“As part of a large group, we are already benefiting from the support
and communication initiatives that all other Markerstudy Group employees
enjoy, such as Talent Recognition, Red Letter Day points, Company Hero,
monthly magazine, and weekly updates from myself,” he says. “Clear communications
from group CEO Kevin Spencer are considered key …”
The Glass Doctor franchise in Amarillo, Texas, owned by Wayne Robinson,
received the Torch Award for Marketplace Ethics in the medium-sized business
category at the 12th Annual Torch Awards for Marketplace Ethics on February
25 in Amarillo, Texas
Binswanger Glass recently launched a Spanish version of its mainline
website. The Spanish portion of the new website can be activated by changing
the language preference on the top right of the screen (see related story
about marketing to new demographics on page
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