DWM - 2009 - September

Volume 10, Issue 7 - September 2009

what's news

COMPANY NEWS
Windowizards Investigated for Making False Product Claims
The fallout of an investigative piece published in July by Philadelphia’s Fox News affiliate has created some concerns for the companies featured in that story. The one most affected has been Windowizards, a window distributor based in Levittown, Pa., and the manufacturer, OKNA Windows based in Bristol, Pa.

The investigative piece alleged that certain windows distributed by Windowizards, which were advertised as foam-filled, were found to have little or no foam inside. The news station also made mention of some marketing materials supplied by OKNA to Windowizards that were alleged to have been inaccurate.

A letter authored by Windowizards president David Goodman says he was unaware that the marketing materials may misrepresent the amount of foam installation in some of the windows offered to its customers.

Breaking News
At press time, Fox News published a follow-up investigative piece to its original story. This report alleges that four
Windowizards customers reported that the company's Thermal-King windows also were examined to be void of foam
in either the sashes or the inner mainframes. In the fourth case the customer complained to Windowizards about the
lack of foam and the company arranged for the windows to be injected with foam.

“We deeply regret any potential confusion caused by the portrayal of foam installation in our marketing materials … We are taking immediate corrective action to clarify the qualities and attributes of all the products we offer to avoid any potential misrepresentation in the future,” Goodman said in the letter.

The foam allegations originated with a former installer, according to the report, who in December 2006 cut open a window that was supposed to be foam-filled but, according to the installer, had no foam inside.

Patrick Egan, an attorney with Fox Rothschild LLP, representing Windowizards, also wrote a letter to Fox News and addressed many of the allegations against the company.

“Windowizards has also checked its inventory and customer records since your interview with Mr. Goodman. While we did receive reports of defective foam injection in a handful of windows—eight to be exact—all customer concerns were resolved in a satisfactory manner. We ask that you consider the source of charges made about windows lacking foam: a former disgruntled contractor,” said Egan.

Following the newscast, Goodman issued another statement further addressing the concerns of its customers.

“At Windowizards’ request, OKNA, the manufacturer of the windows in question, is present at our facility inspecting every window to ensure that it has proper foam content before it is installed,” said Goodman. “Windowizards intends to respond to every inquiry by sending a technician to the customer’s home to ensure that the windows are properly foamed and to make modifications where appropriate.”

Charles Gentry of Carson and Coil P.C. in Jefferson City, Mo., an attorney who specializes in defect litigation, says stories such as this are certainly not new to the window industry.

“Nearly every case that involves alleged product defects includes claims of fraud,” says Gentry, who is not involved in this particular case, but has a great deal of experience in this area. “While fraud typically requires substantial proof to stick, it also opens manufacturers up to punitive damages. Insurance companies will not cover such claims leaving the manufacturer fighting with its own money. Also, most states provide consumer protection laws that are often times applicable and easier to prove. Such laws typically provide for double and triple damages and attorneys’ fees.”

As such, Gentry warns that it’s best to make sure your product and product literature are in agreement.

“In most cases, such claims are relatively easy to defend,” he says. “However, when the facts line up where a manufacturer’s sales literature and the end product don’t match, look out. If a jury believes a company was lying to increase profits, they’ll be angry. Angry juries typically award big verdicts.”

Gentry reminds companies to review all sales literature, websites, brochures, warranties, spec sheets, installation instructions, etc., to make certain they are in harmony with the product itself.

“As the green movement continues to take front and center stage and the Internet provides instant access to consumers, manufacturers must be more diligent than ever to provide what they promise they provide,” says Gentry.

“The plaintiffs’ bar is in the bushes waiting to strike when manufacturers trip up, intentionally or not,” he adds.

Roto Frank and HOPPE Establish Alliance
Roto Frank of America and HOPPE North America are marketing each other’s product solutions available in the United States and Canada through a distribution alliance. In order to launch this collaboration, the Roto Frank of America sales team has initiated the selling process of HOPPE’s HLS9000 program, and HOPPE has begun to actively promote Roto’s NT and ALU Tilt&Turn programs.

Andersen to Restructure and Cut 250 Jobs
Andersen Corp. announced on July 14 that it is reducing its management and office staff by approximately 250 people as a result of internal restructuring. The company, which employs nearly 11,000 people across North America, says this will occur through a combination of early retirements, attrition, open positions and job eliminations. The majority of these reductions will be from its staff in the Bayport, Minn., area.

“While we had every hope and intention of riding out this market correction without making adjustments like this, it has become clear that these actions are necessary to protect the company’s financial strength and flexibility given the fading prospects for a near-term housing market recovery,” said Jay Lund, president of the Andersen Window and Door Group.

In January 2009, Andersen temporarily laid off nearly 600 production workers due to lower order volume. By the end of May, those employees had been called back in response to seasonal demand, a series of sales and marketing initiatives and increased orders attributed to the federal tax credit for energy-efficient replacement doors and windows.

However, it wasn’t enough for the company to maintain all its employees.

“There is mounting evidence that housing demand will not recover until late 2010 or 2011 as a result of rising unemployment … and weak consumer confidence,” said Lund. “This significantly reduces our opportunity to generate the level of sales needed to profitably support a company of this size.”

Andersen’s structure also played a role.

Employees affected by the permanent job eliminations will be provided with severance pay, benefit continuation as well as help with future job searches.

Tru Tech Re-Opens Former Therma-Tru Plant
Door manufacturers who may have thought they would pick up business when Therma-Tru announced late last year that it would close its Fredericksburg, Va., facility, will now face new competition—from Canada’s Tru Tech Doors. The manufacturer, based in Ontario, wanted to expand into the United States, so it purchased the Therma-Tru plant and held a grand opening event on July 8. The new location will produce doors for light- commercial and residential applications.

Tru Tech officials say they can’t figure out why the plant closed in the first place and cite the company’s seasoned employees and ideal East Coast location as its keys to success.

“It didn’t make sense why this facility was closing,” said Tru Tech president John Careri.
The purchase did, however, come at almost the eleventh hour.

Sam Collister, general manager for Tru Tech, came to the facility four days before it was set to close, looking to buy the equipment at the plant. But when he saw the dedicated employees and impressive facility, he thought perhaps the company should consider buying the entire plant.

Therma-Tru plant manager Ernie Hinegardner had been wondering the same thing, so when he heard Collister was coming to see the plant prior to its closing, he said, “This could be our chance.”

Though company officials found that the Fredericksburg location is a great one, Collister admits that Tru Tech officials originally were looking in the New England area as a possible location for the first U.S. plant.

“It wasn’t the exact area we were looking for, but when you are able to hire an experienced management team and factory employees, it’s a great opportunity,” Collister said.

Also working in the company’s favor was the type of doors produced at Therma-Tru—steel-edged doors.

“Initially we were looking for machines to produce a steel-edged product in Canada,” said Careri. “The steel-edged door market was a niche we were looking to fill …. So that [the fact that these were produced here] was the icing on the cake.”

The Virginia facility also will distribute Tru Tech’s wood-edged doors.

Hurd Announces Multi-Million Dollar Investment and Renovation Plan
Hurd has announced that it will invest heavily in renovation plans in its Medford and Merrill, Wis., facilities. The company says that the multi-million dollar, multi-phase project will upgrade its manufacturing facilities and processes. Specific plans for renovation include new lines to support the manufacturing of Hurd’s new H3TM window. Building upgrades, technology system advancements and lean manufacturing and logistic improvements also are planned.

The investment and renovation initiative is backed by Hurd’s new ownership, HWD Acquisition Inc., which purchased the company’s assets in December 2008, and its parent company, Longroad Asset Management LLC.

HWD Acquisition president Dominic Truniger says that this initiative goes well beyond just buying a few new pieces of equipment.

“This is one of the largest investments of capital ever made in Hurd’s history,” says Truniger.

JELD-WEN Closes Oshkosh Plant
JELD-WEN closed its plant in Oshkosh, Wis., in early August. The company had announced the closure two months prior, on June 5. Company officials cite pressure from low-cost imports as one of the reasons for the closure.

“Closing the Oshkosh plant was a difficult decision, but an economic necessity,” said JELD-WEN general manager Scott Wilcox. “Our dedicated workforce has contributed many improvements toward our goal of keeping our wood door product offering competitive. But the sustained economic downturn and long-standing price pressure from lower-cost, imported doors have made this closure a reality.”

He adds, “The decision to close a plant is not done lightly, and is intended to ensure future viability in this changing global market.”

Xtrabond® Sealants Opens New Sales Facility
Premier Industrial, makers of the Xtrabond®, XtraFlash® and XtraFoam®, has opened a second facility outside Phoenix and has hired Michael Rens to serve as national sales manager. The new 6,200-square-foot facility will serve as a dedicated sales center to the company’s original distribution center located in North Phoenix. The company says it also has hired 10 sales associates to service its nationwide network of customers.

Truseal Technologies Guarantees Insulating Glass Certification Testing
Truseal Technologies Inc. is guaranteeing its customers that their IG units will pass rigorous ASTM 2190 and CAN2-12.8 certification testing, or it says it will reimburse the direct costs of the test. The Truseal Certification Testing Guarantee covers IG units produced with Truseal’s Dura Platform warm-edge spacers, including Duraseal™ and Duralite®.

“There is a lot of misinformation regarding the difficulty and uncertainty of passing certification testing. Truseal’s IG certification test guarantee takes the guesswork out of the process. If a unit featuring our products fails, we’ll pay for the testing,” says Ric Jackson, director of marketing and business development, Truseal Technologies.

G-U Consolidates North American Distribution in Montreal
G-U Hardware Inc. is consolidating its U.S. distribution operation in Newport News, Va., into the company’s Canadian division located in Montreal, Quebec.

“Our Newport News facility has worked out very nicely for us since we opened here in 1987,” says general manager Yvon Soucy.“The fact is that our Montreal facility has enough capacity to easily provide service to all of our customers throughout North America. The Montreal facility also provides manufacturing capabilities helping us with shorter lead times for delivery. It’s basically a logistics decision that benefits our customers.”

G-U will maintain sales offices in both Newport News as well as in Medford, Wis.

“For our customers the only change they will see is the warehouse location that their orders will be shipped from,” says Kevin O’Connor, national sales manager. “Customer service, technical support and sales will all continue to be serviced from the United States. Invoices, orders and company contacts will also continue to be located in the United States.”

Stürtz Announces Plans to Relocate to New Facility
Stürtz Machinery has finalized plans to relocate from Solon, Ohio, to a new facility in Twinsburg, Ohio. According to the company’s announcement, the new facility has a larger manufacturing plant floor and more overhead crane capacity than the previous location.

“After 12 years of working out of the same facility it’s going to be a big change for us,” says Ellis Dillen, Stürtz vice president, “but we have been looking for almost two years and finally found what will prove to be a more suitable location for our operation.”

The Solon Stürtz facility was part of a multi-tenant commercial and warehouse property; the new location was built as a standalone manufacturing facility. It offers approximately the same square footage but with a wide-open 21,000-square-foot shop floor. The two main bays are each serviced by an overhead crane and, according to the company announcement, two recessed loading docks will make shipping and receiving more efficient during the busy months.

Larson Purchases Superior Homes
Larson Manufacturing, a storm doors and windows company based in Brookings, S.D., has announced the purchase of Superior Homes. The Watertown, S.D.-based Superior Homes, which manufactures modular homes in a factory setting for resale, has been in existence for more than 55 years and its projects have included classrooms, hotels and assisted living homes.

The current business model, management team and staffing of about 70 people of Superior Homes will be maintained under the new ownership.

“Although we are not planning any major changes in operations, we do intend to take advantages of efficiencies of both companies as it relates to procurement, marketing [and] general administrative functions,” says Jeff Rief, chief operating officer of Larson. “Larson’s financial strength and stability should expand Superior Homes’ opportunities in the marketplace.”

The acquisition became effective in July and included all assets, land, building and business operations.

Edgenet Sues Home Depot
Brentwood, Tenn.-based Edgenet Inc. has filed an injunction against the Home Depot. According to documents filed by Edgenet in the U.S. District Court for the Eastern District of Wisconsin, the software manufacturer alleges that Atlanta-based Home Depot has misappropriated the company’s Big Hammer software. The software, which helps product suppliers and retailers collect and organize data concerning products and product attributes, was contracted for use by Home Depot.

Edgenet claims that with the help of former employee James Musial, Home Depot illicitly embarked on creating its own software system, the “HomeDepotLink” system, using Edgenet’s technology. According to Edgenet, the Home Depot further interfered with business by informing Edgenet suppliers in early August that Home Depot would no longer accept product data processed through Big Hammer systems.

Musial, who was a software manager closely involved in the development of the Big Hammer software, left Edgenet’s Atlanta office in 2008 to work for Home Depot.

Included in court documents is Musial’s nondisclosure agreement with Edgenet.

Edgenet asserts that Home Depot has caused tens of millions of dollars in damages as well as irreparable harm to its business and has requested a trial by jury.

Home Depot spokesperson Stephen Holmes made the following statement regarding the case to DWM magazine, “We disagree with the claims presented and intend to vigorously defend our position in the proper forum.”

GBO Inc. Completes the Sale of Two Divisions
The sale of the principle assets of GBO Inc.’s PVC window division and its steel door division to Ontario-based manufacturer Farley WinDoor Ltd. closed in July. The cash consideration of the transaction totaled $12.5 million, payable as follows: (i) $500,000 non-refundable deposit which was paid on May 29, 2009; (ii) $11 million which was paid at closing; and (iii) $1 million payable upon the 12-month anniversary of the closing, which shall bear interest, according to a statement issued by GBO. GBO officials say they invested the proceeds of the transaction in the company’s working capital and will use a significant portion of the proceeds to pay down its current debt.

GBO officials say they will now concentrate on the wood door and window business.

LEGISLATION
Senate Resolution Would Increase Funds Available to Disabled Vets for Home Renovations
The U.S. Senate currently is reviewing a resolution that would provide for an increase in the amount payable by the Secretary of Veterans Affairs to veterans for improvements and structural alterations to their homes as part of home health services. This would include doors and windows and would increase the amount payable to veterans from $4,100 to $6,800.

The resolution was introduced by Rep. Steve Buyer (R-Ind.) in March and the House recently voted to approve it.

New Hampshire Bill Will Create Window Replacement Program
New Hampshire Gov. John Lynch recently signed a law that will create a window replacement program in the state for houses with lead poisoning. Once the funds are available, as regulated by the state, the program will be made available to owners of homes affected by lead poisoning. According to Senate Bill 114, which was signed into law on July 16, pilot projects for the program will begin as soon as funds are available.

BRIEFLY
Frank Lowe Rubber & Gasket Co. Inc. has re-certified as an ISO 9001:2008 registered company. The company’s original certification, which applies to all phases of its management system, was originally issued in April 2002

Edgetech I.G. passed its recent quality audit by Smithers Quality Assessments and with it earned the ISO 9001:2008 with design certification

Joseph Machinery has teamed up with an Italian machinery manufacturer to offer cutting and fabrication solutions ranging from its custom built high-production machinery to the more universal European style CNC-machining centers in three, four and five axes for the extrusion world. The machines are built to Joseph’s specifications and are supported at the Joseph headquarters in Dillsburg, Pa.