Volume 33, Number 7, July 1998

Industry News

Allstate Insurance to Name LYNX Services by PPG as Secondary Claims Processor

At press time, Allstate Insurance of Northbrook, IL, was expected to announce a sweeping change in its auto glass program arrangements and the appointment of LYNX Services by PPG as a secondary referral agent and claims provider. Allstate and the Chicago- based Vistar Auto Glass had had a long-standing agreement for Vistar to provide auto glass installation, referral and claims processing services, which dates back to the days before Vistar was formed by a merger of Globe Glass & Mirror and Windshields America (see USGlass, February 1996, Industry News). Vistar has since merged with Safelite Glass Corporation of Columbus, OH, (see USGlass, October 1997, Issue at Hand) and Safelite has been providing these services to Allstate since that time.

Sources told USGlass that the agreement with LYNX is expected to cover all cases in which Safelite does not provide service, either because an insured does not wish to use Safelite or for any other reason.

"To handle paper bills is very expensive," said Darrell Ebert, senior manager of Allstate. ‘We have been working to incorporate electronic commerce into our claims processing system."

The change will not affect Allstate’s relationship with Safelite, said Ebert. "There are certain bills that do not go through Safelite," he said explaining that it is these bills that will be covered by the agreement. "Our current agreement and business with Safelite is the same as it has been," he said.

A spokesperson for Safelite said the company has no knowledge of any such decision by Allstate.

 

Harding Glass Acquires Four Retail Operations

SunSource of Philadelphia, PA, announced that its Harding Glass unit has acquired the net assets of four retail glass operations. The businesses include Service Glass of Albuquerque, NM; Metro City Glass of Fort Worth, TX; American Glass Industries of Dallas, TX; and Biltmore Glass of Scottsdale, AZ. Annual sales of the operations amount to approximately $4.6 million.

The company says the unit also expects to close on two other acquisition transactions by mid-July that will add three retail locations in Arizona and one in Texas. In addition, Harding has agreed to terms to acquire a retail glass operation in New Hampshire.

 

Harmon Sued By Glass Service Company

Glass Service Company, Inc. of St. Paul, MN, and four individuals have filed a suit against Harmon Glass Co. of Minneapolis, MN, alleging deceptive trade practices, tortious interference, disparagement, consumer fraud, unfair competition and violation of the Lanham Act, which involves trademark infringement.

Glass Service Company accuses Harmon of using its call center staff in Orlando, FL, to divert customers away from competitors to Harmon or affiliated network shops. The suit alleges that call center employees identify themselves to customers as employees of that customer’s insurance company. Then, the suit alleges, call center employees attempt to persuade the customer to use a Harmon shop. If the customer insists on a particular shop it is alleged that he or she is sent to another group at the call center called the "affiliate group," which attempts to discourage the customer from using their shop of choice by saying that the shop is not in an approved network or that its prices are too high, according to documents filed.

In addition to these accusations the suit also includes a first-hand account of four individuals describing how they were allegedly misled and coerced by employees at the Harmon Call Center.

Harmon is consulting with its attorneys before making a move. According to Mike Schmaltz of Harmon, "We are completely confident that we are operating within the law and that we have done nothing wrong," he said.

The four individual plaintiffs were unavailable for comment.

 

MERGERS AND ACQUISITIONS

Mikron Industries Buys Spectus Systems

Kent, WA-based Mikron Industries has purchased the assets of Spectus Systems, Inc. of Winnebago, IL. The acquired vinyl extrusion company will continue to operate under the Spectus Systems name.

According to Mikron’s comptroller, Gary Crane, the acquisition represents an opportunity for Mikron, which primarily serves the new construction market, to enter the replacement market.

Speedy Auto Purchases Frontier Auto Glass

Speedy Auto & Window Glass of Anchorage, AK, has announced the acquisition of Anchorage-based Frontier Auto Glass, which has been in business for the past year in Anchorage and Juneau. Speedy says Frontier’s Anchorage location will be closed, while the Juneau branch will stay in operation with the same staff. Frank Senko, the Alaska regional manager for Speedy, said, "In addition to the existing auto and marine glass service, we will also be offering complete residential and business glass service."

 

CODES AND REGULATIONS

BOMA Contributes to IFC, ASHRAE Development

BOMA International has been selected to serve on the International Code Council committee responsible for developing the International Fire Code (IFC). According to BOMA, it is the first and only real estate organization with a vote in the process.

In addition, the organization has filed detailed comments on the draft revision to ASHRAE Standard 90.1, the energy-efficiency standard recognized by the federal government and most building codes. BOMA took issue with two major approaches being taken by this proposed expansion of the ASHRAE standard. First, BOMA called for all existing buildings to be clearly exempted. Second, BOMA noted that "real world" business investment principles must be used if the resulting standard is to be acceptable to building owners.

 

COMPANIES

SunSource Net Income Up 17 Percent

SunSource Inc., the owner of the Harding chain of glass shops, reported net income of $1.6 million or $0.25 per common share for the quarter ended March 31. On a pro forma basis, net income increased 17.6 percent in that period to $1.8 million compared to 1997 net income of $1.5 million. The pro forma results assume that the company’s March 1998 public offering of 796,408 common shares and September 30, 1997, conversion from partnership to corporate form occurred as of January 1, 1997. Sales for the first quarter of 1998 increased 1.8 percent to $172.1 million.

SunSource also announced that a cash dividend has been declared in the amount of $0.10 per share of common stock. The company expects to declare future quarterly dividends on the common stock to aggregate $0.40 per common share annually, dependent upon the company’s future earnings, financial condition and capital requirements.

Pilkington LOF to Close Ontario Plant

Toledo, OH-based Pilkington Libbey-Owens-Ford (Pilkington LOF) has announced that it will close its manufacturing facility in Lindsay, Ontario, Canada, as of February 1, 1999.

The facility, which now employs 181 people, encapsulates plastic mouldings onto windshields, backlites and other auto glass products for light trucks. Its future has been in question since last October when employees were notified of a program of layoffs that were to begin in May. According to Pilkington LOF, the layoffs and ensuing closing are a result of a redesign by its customer, General Motors (GM), that will eliminate use of encapsulated moulding on the windshield GM’s C/K truck.

Pilkington LOF said it has excess capacity at its three North American plants that use the encapsulation process, and it is consolidating production at two plants to remain competitive.

Pilkington’s parent, UK-based glass manufacturer Pilkington plc, has also announced that its major restructuring program cost 225 million pounds ($140 million US) last year—far more than the 194 million pounds ($121 million US) originally predicted. The company said its restructuring program was much more reaching than predicted originally. The program includes reducing its work force by up to 7,500 and closing many businesses. By the end of March, the company said its annual overheads had already been slashed by 100 million pounds ($62.5 million US).

Apogee Updates Investors

Executives of Minneapolis, MN-based Apogee Enterprises, Inc. updated investors on its strategic repositioning and expansion plans at a June conference in Minneapolis.

According to Russ Huffer, president and CEO, Apogee has accelerated its repositioning process. "In late fiscal 1998, we exited our international curtainwall operations, and in 1999 we intend to invest approximately $100 million in our businesses, primarily in our Glass Technologies segment," he said. "We’ve eliminated our only weak business, and we’ll double the production capacity of our strongest business in just two to three years," he predicted.

Vice president-finance and CFO Robert G. Barbieri added that the repositioning would give the company a much stronger earnings profile, particularly with the expansion of Glass Technologies.

Courtaulds Shares Drop as Akzo, PPG Avoid Bid Battle

Shares in UK-based Courtaulds fell in June after rival suitors Akzo Nobel NV and PPG Industries agreed not to enter a bid battle, according to Reuters. In a deal announced by all three companies, Dutch chemicals group Akzo will go ahead with its 4.5 pounds ($2.75 US) per share agreed bid. PPG has agreed not to launch a formal offer, and after completion of the transaction will buy two coatings units from Akzo for 175 million pounds ($106.87 million US).

Following the announcement, Standard & Poor’s affirmed its single-‘A’ corporate credit and senior unsecured debt ratings of PPG, as well as its ‘A-1’ commercial paper ratings of PPG and PPG Holdings B.V. The ratings were removed from CreditWatch, where they were placed with negative implications in May (see USGlass, June 1998, Industry News). The ratings outlook is stable. Standard & Poor’s said PPG’s decision to not pursue the acquisition, which likely would have been mostly debt-financed, restores prospects for continued strong credit quality.

Architectural Glass Creates Art Wall for Saudi Group

Architectural Glass Art, Inc. (AGA) of Louisville, KY, has won a contract to design and fabricate a glass art wall for the Saudi Research and Marketing Group in Riyadh, Saudi Arabia. The glass art wall, designed by Kenneth vonRoenn of AGA, is a feature element of the board of directors conference room. The studio was commissioned after an extensive international search by the architect of the project, Swanke Hayden Connell of New York.

The work is composed of two layers of plate glass with prismatic glass laminated on each of the four surfaces. The seven panels comprising the wall, which is approximately 30 feet long and eight feet tall, will be fabricated in AGA’s studio.

Scale-Up to Test Research Frontiers Films Advances

Research Frontiers Inc. of Woodbury, NY, says that its scale-up program to produce large quantities of its SPD (suspended particle device) films has progressed so well that the company’s licensees should be able to commence testing of large volumes of these light-control films in the fourth quarter of 1998. Its efforts to scale up to commercial production quantities is expected to assist existing licensees and speed up the introduction of commercial products using SPD technology, as well as permitting a wider range of companies to become licensees, according to the company.

 

INDUSTRY-WIDE

Lowe’s Goes Coast-to-Coast

Lowe’s Companies, Inc. of North Wilkesboro, NC, a retail chain that supplies glass and other construction and remodeling items, has announced plans for a major expansion into the Western United States. The westward move will extend the company’s retail reach from coast-to-coast, furthering the company’s long-term nationwide expansion strategy. The company, which had 1997 sales of $10.1 billion, says it will invest more than $1.5 billion to build in excess of 100 new stores in Western markets over the next three to four years. The initial stores will begin opening in late 1999.

Glass Workers Union to Merge With Food Workers

The Toledo, OH-based American Flint Glass Workers Union is merging with the United Food and Commercial Workers, according to the Toledo Blade newspaper. The report said declining membership and reduced support for the AFL-CIO prompted the union’s board of trustees to propose the merger. Details of the proposed merger are not final, but officials say they expect it to be completed this year if the membership of both unions agree.

The American Flint Glass Workers Union represents approximately 18,000 workers in 125 locals at glass plants operated by firms including Libbey Inc. of Toledo and Corning Inc. of Corning, NY.

NAPM Price Index Declines

Glass, textiles and wood were among seven industries that reported paying higher prices in December. Overall, the NAPM Price Index declined to 50.3 percent in December from 51.9 percent in November. These results indicate higher prices for a sixth consecutive month, though the rates of increase are much slower.

In addition, glass was one of seven industries reporting higher inventories in December than November. This goes against the trend of inventory reduction by manufacturers, represented by a rise in the NAPM inventories index to 47.4 in December from 43.4 percent.

 

INTERNATIONAL

PPG To Establish Facilities In Argentina, Brazil

PPG Industries of Pittsburgh has acquired Akzo Nobel Coatings International BV’s remaining 20 percent interest in a Brazilian automotive original equipment coatings company, and is establishing production facilities in Argentina and Brazil.

PPG held a 45-percent interest in the company when it was established in 1995 and increased its share to 80 percent in early 1997. It acquired 100 percent of a related company in Argentina earlier this year.

PPG said arrangements with Akzo Nobel for contract production in Argentina and leased production facilities in Brazil will be phased out as production increases at PPG’s plants. The company has acquired an idle plant in Sumar, Brazil, and manufacture of OEM coatings and related products was targeted to begin there by the end of 1997. Similar products will be made in a plant to be built at Pilar, Argentina, scheduled to begin production by the third-quarter of 1998.

 

KUDOS

EFCO Specification Binder Wins Award

The EFCO Architectural Reference Manual has received an Honorable Mention Award in the Construction Specification Institute’s Category E competition for specification binders. EFCO says the two-volume set is also available on CD-ROM.

 

LITIGATION

Pella Ends Patent, Trade Dress Suit Against KML

Pella Corporation of Pella, IA, says it has concluded its patent and trade dress litigation against KML Windows. According to Pella, KML has agreed to immediately discontinue sales which infringe on Pella’s patent for simulated divided lights (U.S. Patent No. 5,345,743) and admits that the patent is valid and duly issued. KML also agrees to take reasonable steps to avoid customer confusion between its windows and those manufactured and distributed by Pella.

 

ON THE MOVE

Gardner Glass Products has moved its Dallas business office to a new location at 150 Payne Street, Dallas, TX 75207. The phone and fax numbers remain unchanged . . . Vistawall’s Rhode Island facility has relocated to Warwick, RI . . . Commercial Plastics & Supply Corp. has relocated its transportation division to a new 10,000-square-foot facility Allentown, PA . . . Dorma Door Controls Inc. has expanded its Reamstown, PA, facility with a 25,000 square-foot addition. . . . C.R. Laurence Company of Los Angeles, CA, has announced the opening of a Phoenix, AZ, branch warehouse. The new 30,000-square-foot warehouse features shipping equipment and has the capability to provide one-day service, according to the company . . . Savannah Trims, Inc. has moved. Its new address is 5601 Corporate Way, Suite #416, West Palm Beach, FL 33407-2044. The company can also be found at http://www.hurricane products.com. . .

 

MANUFACTURING, DISTRIBUTION AND PRODUCTION

Security Lock Opens NV Warehouse

Needham Heights, MA-based Security Lock Distributors has opened a warehouse and service center in Las Vegas, NV, which it says reflects the company’s commitment to provide the western states with a high level of service.

Viracon Breaks Ground on Georgia Facility

Viracon, Inc. of Owatonna, MN, has broken ground on a new 325,000-square-foot glass fabrication facility in Statesboro, GA. Its parent company, Apogee Enterprises, says it plans to invest $35 million in the building during the next two to three years, boosting Viracon’s capacity to 60 percent. Michael Diedrich has been promoted to vice president of manufacturing for the new facility. He has more than 18 years of experience in the glass industry.

"The facility will increase our ability to meet customer demand for existing products and expand our potential to enter new markets," said Russ Huffer, Apogee president and CEO.

PPG To Transfer Production From Its Georgia Plant

PPG Industries says it is moving production of its Azurlite and Starphire glasses from its Perry, GA, facility to its conventional float glass lines in other facilities. Production of Azurlite will begin late this year at the company’s Wichita Falls, TX, plant, while Starphire will be produced at the Carlisle, PA, plant beginning in early 1999. The company says the changes will allow it to meet increasing demand.

GL Coating Opens Iowa Coating Plant

GL Coating Corp. of Walnut Creek, CA, has announced the opening of its Hampton, IA, glass coating facility for production of Low-E glass for AFG Industries. The facility uses a coating system from German Leybold Systems GmbH to process the glass from AFG’s Spring Hill, KS, float glass facility. The coated glass is marketed as Comfort-Ti™.

Coraglass Installs Automated IG Line

Coraglass, Inc., a subsidiary of Tuscaloosa, AL-based Coral Industries in Reform, AL, has completed the installation of a new Lisec automated insulating glass line. The installation is the latest addition to the company’s line of flat glass fabrication capabilities, which include CNC cutting, edging, beveling, silkscreening, v-grooving and tempering.


USG

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