Volume 48, Issue 2 - March/April 2009

In the News

MGM Industries Acquires Assets from Echo Windows

MGM Industries Inc. in Hendersonville, Tenn., recently entered into an agreement with the management of Echo Windows LLC in Red Oak, Iowa, to purchase the inventories and equipment necessary to build the Sienna replacement window product line, according to Joe Gaskins, MGM’s vice president of sales. Echo Windows had closed its doors just a few days before the sale. 

In what has been an ongoing saga, the plant where Echo was located originally had been owned by Traco in Cranberry Township, Pa., which sold the business to Richard Gillman, former owner of Republic Windows, in late-November—the same week Republic Windows in Chicago closed its doors. With the purchase of the plant, Gillman created Echo Windows and opened it in the Traco plant.

The latest sale has been disheartening for Echo (formerly Traco) plant employees.

“They [Republic management] sold the Sienna line out of the building in hopes of getting our customer base,” said Dwayne Adams, plant manager, shortly after the sale agreement was made.

He also noted that at that time equipment was being moved out of the facility—leaving the plant with little with which to build a future. “The Sienna line was the primary line so that leaves us with a building and one composite window line so that puts us [Echo] out of business,’ he said.

However, Gaskins told Shelter magazine that the company had been working for months with window extruder VEKA to make the DH31 product, which is the same that Echo/Traco was making. When MGM learned that Echo Windows was struggling, MGM made an offer to purchase the Sienna line.

“This was a way to expedite our way to get into that window system,” said Gaskins. The equipment was moved to MGM’s 400,000-square-foot Hendersonville, Tenn., plant the week of the sale and production was scheduled to begin immediately.

When asked if MGM had considered purchasing the Iowa facility, Gaskins says this was not a feasible alternative. “It makes more sense to manufacture and ship everything out of one location for an expenditure point of view,” he said.

Gaskins also admits that MGM took into consideration the fact that they were buying the assets from a company that has been shrouded in controversy.

“We’ve been in business for 42 years and it takes that long to build a solid reputation and only seconds to destroy it,” says Gaskins. “The purchase of Echo Windows was an arms-length transaction. That’s why it was important for us to buy the assets and not bring that management team into our company.”

MGM Industries will assume the trade name Sienna and has agreed to assume the warranty issues of Echo Windows for these lines, for four years beginning February 27, 2009, and for four years prior to this date. This excludes Echo’s P2 product, which is not included in the purchase.“We understand the importance of upholding existing warranties and we want to reassure customers that we will honor those warranties and provide them with the best customer service we can provide,” says Gaskins.

Inside the Echo Closing
As for Echo, a statement issued by the company attributed its closing—and resulting asset sale—in part to the media coverage of the Republic story.

“We had hoped that, with the support of new investors, Echo Windows LLC would have the ability to serve niches of customers needing good products manufactured in the Midwest,” Gillman said. “However, the labor strife, continuous labor media stories and accusations, which accompanied the closing of the Chicago company, added to the difficulties in a troubled economy. The ongoing attacks closed our access to additional investment and, in all likelihood, made nervous customers hesitant to engage in business contracts with us.”

Gillman told Shelter magazine that, at the time of the purchase, “we knew the economic climate was tough but we were optimistic about our plans for serving the healthy parts with good products. What we didn’t plan on was what we noted in our announcement of the closing.

“We are sad that the inability to make the company succeed represents a loss for more than 100 workers and their families, and investors who held great hope for this enterprise,” added Gillman in the press release issued by the company.

A Happier Ending
The Republic facility’s workers may be getting a happier ending to their struggle.

The U.S. Bankruptcy Court for the Northern District of Illinois approved the sale of the assets of Republic Windows and Doors to Serious Materials the last week of February. However, Serious president Kevin Surace told Shelter magazine that this is just the first step in taking over that Chicago facility, as lease and union negotiations, as well as other issues still have to be conducted.

“There is stuff in that facility that doesn’t work anymore,” says Surace, referring to the abrupt closing of the Republic plant. According to the bankruptcy papers, “At closing the Purchaser shall pay the Purchase Price to the Trustee, which consists of (a) a cash payment at the Closing in the amount of one million four hundred and fifty thousand and (b) and obligation to pay the Deferred Purchase Price pursuant to and in accordance with Section 4.9 of the Asset Purchase Agreement.” 

Republic Windows Story Garners National Attention

Door and window manufacturer Republic Windows & Doors not only was a hot topic in the building supply chain industry news, but the story of the company’s abrupt closing—and union sit-in—drew national attention in December. The story appeared on various news outlets throughout the country—particularly after incoming President Barack Obama offered his opinion on the issue and political notable Jesse Jackson delivered turkeys and food to employees during the sit-in.

Among the news outlets that covered the story were The Chicago Sun Times and The New York Times, both of which sought information from Tara Taffera, publisher/editor of Shelter sister publication DWM, and included information from DWM in their own reports.

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