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Soft-Lite President Divulges Further Details Regarding Gorell Purchase

When Soft-Lite announced in February that its subsidiary Soft-Lite-Gorell would purchase the assets of Gorell Windows and Doors, which had been placed into receivership, Soft-Lite’s president Roy Anderson was pretty quiet about the purchase. But in March the company announced further details regarding plans for Gorell and Anderson gave an exclusive interview to DWM magazine.

DWM: First, I want to go back to the beginning. Were you looking for acquisitions and Gorell came at the right time?
Anderson: They are one of our main competitors that we go head-to-head with and respect in the marketplace. I called Wayne [Gorell] awhile back [late in 2011] and asked him if he had any thoughts regarding selling or merging. He said he had a book out [offering memorandum describing the financial performance, product segments, distribution, etc.] and I was late to the party. So we got the book from them and we did look at the company in early January and sent a letter saying we wanted to buy assets. But nothing came of it so we thought it was dead. We were told they would be refinancing with the bank and it wasn’t for sale any more.

So I was surprised when it was announced that they were placed into receivership. We reached out to the receiver immediately then spent the weekend working with her.

DWM: When you first made the announcement back in February, did you think it may be a possibility to keep both plants [Soft-Lite and Gorell] running?
Anderson: When I went there and met the people I tried to find a way to keep the plant open but it just didn’t work out. No one likes to see anyone lose their job–my dad was a blue-collar worker. It’s something I hate. That’s why it took so long from the original letter of intent to the final agreement as we were trying to find a way to keep it open.

DWM: The press release you issued said “it’s not feasible.” Can you elaborate on that?
Anderson: They had an EPA situation from the Season All days from 15 years ago. They have a facility that has to be monitored by the EPA—that’s a liability no one wants to take on. They also had a large unfunded pension liability. We did reach out to the pension fund to see if we could work something out but they never got back to us. When I said I wanted to take on the warranties—that’s a large expense. So if you take on too much you can take on a situation and endanger yourself.

DWM: What Gorell employees are you keeping?
Anderson: We are keeping the sales staff, customer service, IT and some others and the retail outlet will stay open.

DWM: Have you retained most of Gorell’s customers?
Anderson:The receivership really scared a lot of customers so, with the Receiver’s consent, I visited a number of them and they are all on board. There are some who have chosen to go a different path but we maintained the large majority and, quite frankly, I am surprised at the number of orders coming in given the press, etc.

A lot of them have been there for 20 years and are loyal to the brand. There are one or two who have left and have indicated to get back with them in 45 days. But we are looking at the orders coming in and they have been very strong.

DWM: I want to clarify something you said in your press releases regarding the warranties. You said that, “Soft-Lite Gorell is committed to honoring Gorell warranty obligations for products made before February 14, 2012, for Gorell customers who meet their obligations to Gorell and remain loyal to the Gorell brand.” So what if a Gorell customer moved to another window manufacturer and a homeowner then submitted a claim? Would that not be covered?
Anderson: No it wouldn’t. Replacement parts will be available, but they will pay for it. As a courtesy we will have replacement parts available free of charge for windows sold through our loyal customers, and that will mean most of the windows, but we are buying these assets free of all Gorell liabilities. So if a Gorell customer has already left or moves to another manufacturer, we have no responsibility for the windows sold before we bought the assets.

DWM: What surprised you, if anything, about this whole situation?
Anderson: I thought the whole deal was over and the next thing I knew they were in receivership. That was a surprise that no one got back to me as I thought they were off the table.

Another thing was the level of debt the company was carrying—it was mind boggling. When you are in the industry, you hear rumors. I heard a number and said that’s impossible. When I got that number from the banks it was 50 percent higher than that rumor I had heard.

I’m not surprised by this but I want to say I already like the company and the loyalty of the customers. The people have been there for a very long time. I thought it was impressive that they have been there for so long.

Roto Frank of America Receives Performance Award
Roto Frank of America Inc. was recognized with a special “Turnaround Performance Award” from its parent company Roto Frank AG. The ceremony took place at the beginning of February during the group’s leadership conference in Berlin, Germany. Chris Dimou, Roto Frank of America CEO and president, accepted the award from the executive board on the company’s behalf.

The Turnaround Performance Award is given by Roto Frank AG to a Roto Group company makes dramatic improvements. According to the announcement, the executive board recognized significant progress in the areas of strategy, market approach, sales, cost structure, inventory, and change management.

“The decision to honor Roto Frank of America with this award derived also from the fact that Roto has been dramatically reversing the negative trend which was in place up until 2009,” says Dr. Eckhard Keill, CEO and chairman of the board for Roto Frank AG.

Dimou adds, “Despite the downturn in the building and construction industry and such difficult economic times, the Roto team here in the United States and Canada has persevered and made tremendous strides over the past two years. By growing our sales by almost 40 percent the last couple of years, we have gained important market share and prepared the ground for future growth. We are deeply honored by this unique performance award, [and are] appreciative of the Group’s continued support, as well as our employees’ dedication and hard work.”

Nine Hardware Companies Fined for Price-Fixing
The European (EU) Commission has fined nine European producers of mountings for windows more than $112 million USD for operating a cartel by which they agreed on common price increases, in breach of EU antitrust rules. The collusion lasted from November 1999 to July 2007 and affected European buyers of windows across all member states of the EU and European Economic Area (EEA), according to an announcement from the EU. The companies are Roto, Gretsch-Unitas, Siegenia, Winkhaus, Hautau, Fuhr, Strenger (all of Germany), Maco of Austria and AGB of Italy. According to the announcement, Roto received full immunity from fines under the Commission’s 2006 Leniency Notice, as it was the first to provide information about the cartel. It adds that the fine for Gretsch-Unitas was reduced by 45 percent and the fine for Maco by 25 percent in view of their cooperation in the investigation.

“For more than seven years, buyers of windows throughout Europe have had to face a cartel. We are determined to fight such illegal practices, whether they come from large multinationals or family-owned companies,” says Commission vice president in charge of competition policy Joaquín Almunia. “While we have ensured that the fines we imposed today remain proportionate, they are high compared to the companies’ turnover and will make them think twice if they ever think of fixing prices again.”

According to the release, the cartel was well organized and the meetings followed a regular pattern: every year in the third week of November the parties met at the occasion of trade association meetings in Germany. These regular meetings were called the “Permanent Conference.” In the morning before the official meetings, the parties sat together in order to set a price increase for the following year or to agree on a surcharge for raw material costs. In the course of the following year, the cartelists met again to inform each other about the various steps they had taken to implement the agreed price increase. Local sales representatives all over Europe also had regular contacts to ensure the success of the cartel.

According to the EU, the fines were set on the basis of the EU 2006 Guidelines on fines. The Commission took into account the companies’ sales of the products concerned in the EEA, the very serious nature of the infringement, its EEA-wide scope and its duration, adds the release. Exceptionally, the Commission reported that it exercised its discretion in accordance with point 37 of the Guidelines and reduced the fines in a way that takes into account the mono-product nature of the companies and their differences in participation in the infringement.

According to the release, one of the companies invoked its inability to pay the fine under paragraph 35 of the 2006 Guidelines on Fines. The Commission thoroughly assessed the application on the basis of a financial and qualitative analysis of the ability of the company concerned and its shareholders to pay the final amount of the fine imposed, taking into account the likely effect such payment would have on the economic viability of the company. As a result of this assessment, the Commission granted a reduction of 45 percent of the fine.

The Commission’s investigation started with unannounced inspections in July 2007; it later adopted a Statement of Objections against the companies in June 2010.

Fenzi Offers Learning Unit on Selecting IG Sealants
Fenzi North America has launched a new technical training course for architects created to provide an overview of the characteristics that insulating glass sealants must provide to ensure long-term thermal performance, structural durability and longevity of insulating glass units.

The course meets the U.S. Green Building Council’s educational criteria and qualifies LEED professionals with 1.0 GBCI CE hour. The course is free and offered in an online.
http://www.aecdaily.com/sponsor/fenzi

Sen. Chuck Schumer Tours Crystal Windows Facility
Sen. Chuck Schumer visited and toured Crystal Window & Door Systems’ 205,000-square-foot production facility in Queens, N.Y., in March. He met with employees and senior management including owner and president Thomas Chen to learn about the company. The discussion topics included national industry topics, such as federal energy-efficiency tax credits, lead paint regulations and affordable housing construction.

“We were very pleased to welcome Sen. Schumer to our headquarters to show him our factory and our advanced window and door products,” says Thomas Chen. “The senator took time from his busy schedule to learn about our company and how much it takes to compete with the prolonged economic downturn in the building products market.”

During the tour, Schumer saw the assembly of energy-efficient aluminum and vinyl Crystal windows, patio doors and multi-pane insulating glass units. In addition to personally meeting many of the Crystal employees, the senator also viewed solar photovoltaic panels distributed by Crystal’s solar energy subsidiary Helios Energy Systems.

Labor Department Announces Grants for Laid-Off Andersen Workers
The U.S. Department of Labor announced a $656,098 grant to provide employment-related assistance to about 150 workers laid off in November and December 2011 by Andersen Corp. A majority of the affected individuals worked at the company’s Bayport, Minn., facility, and a few worked at the Renewal by Andersen facility in Cottage Grove, Minn.

“Even as our economic recovery picks up steam, workers in the hardest hit industries like residential construction face significant headwinds. These funds will help them obtain the training and support services they need to compete for good jobs,” says Jane Oates, assistant Secretary of Labor for Employment and Training.

The grant is being awarded to the Minnesota Department of Employment and Economic Development to be used for training and re-employment support services in conjunction with trade adjustment assistance benefits. According to the announcement, National Emergency Grants are part of the secretary of labor’s discretionary fund and are awarded based on a state’s ability to meet specific guidelines.

Adhesive Applications Adds Expanded Manufacturing Facility
Adhesive Applications announced the opening of an expanded manufacturing facility, near its headquarters in Easthampton, Mass. With this additional production space, the company is able to produce foam tapes, film tapes and transfer adhesives on a larger scale than before, according to the announcement.

“This expansion comes in the midst of significant growth for our company,” says Wayne Tangel, president of Adhesive Applications. “It was a necessity to keep up with the increased demands from our customers, and now provides us with a larger and more concentrated focus on creating even better adhesive products in higher volume.”

The new facility combines operations from two locations into one larger customized building. During the renovation, the company made significant machinery enhancements, deep-energy retrofits, and added a broader line of products to coat, including die-cutting silicone adhesives, according to the announcement.

Adhesive Applications utilized unused manufacturing space owned by its parent company, the October Company, also of Easthampton. The company has a commitment to keeping its products American-made, and plans to add new jobs for skilled laborers.

Amesbury Opens New Extruded Products Manufacturing Facility
Amesbury announced that its extruded products division will locate its newest production facility in Covington, Ga.

“Amesbury’s extruded products division is excited to be expanding its operations in Covington, Ga.,” says Todd Betterley, vice president.

“We currently have extrusion operations in Cannon Falls, Minn., and Ontario, Calif., with additional future growth already being planned. The Covington facility allows us the ideal location to reach the East Coast and Southern U.S. region.”

“The location of our new facility will allow more flexibility in freight savings and logistics for our customers and will allow us continued growth into new markets as part of our strategic growth plans,” adds Brian Woodman, director of sales and marketing for Amesbury Extruded Products.

“Our growth continues as part of our strategy to become the premier national extrusion supplier. Our investment continues in these tough economic times as proof of our commitment to the building products industry,” says Jonathan Petromelis, president of Amesbury.

DWM
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