Volume 34, Number 10,  October 1999

 

INDUSTRY NEWS

Glass Falls Killing Chicago Woman; Security Film Proposed, Never Applied

Could the fatal accident have been prevented? This is the question Chicago building inspectors and other industry insiders are asking following the fall of a 2-foot square, 1/2-inch thick lite of glass which dropped 29 floors on October 8 from the CNA Building on Chicago’s S. Wabash Avenue. The lite hit and instantly killed 37-year old Ana Flores who had been walking with her toddler. An industry source familiar with the CNA building answered an affirmative, “yes”—the tragic situation could have been averted.
According to one source, as early as late 1995-1996, it was proposed to CNA management that safety film be applied to the interior of all windows on the CNA building. The source says the film, which would have cost approximately $300,000, was never installed. The safety film proposal was developed with the help of a consulting firm and local film supplier in conjunction with an analysis performed at CNA’s request.
When asked about the proposal to install security film on the CNA building, a CNA representative would not comment on the situation.
The recent situation is not the only one of its type that has occurred at the CNA building. In 1994, a man was hit in the back with a lite of glass which fell from the building. The annealed lite which fell in the most recent incident was reportedly one of the original pieces glazed into the building approximately 26 years ago. Until recently, if glass failed, it was replaced with the same 3/8-inch gray annealed glass (1/2-inch at certain floor heights and corner lites). But, now failed windows are being replaced with an upgraded product of heat-strengthened glass with safety film. “There were significant changes to how the building was reglazed,” said the source. But all of the original windows still had the initial annealed glass, which is why the safety film proposal was made.
While the failure to follow through with the application of security film is one issue surrounding the incident, the other is the belief that CNA management allegedly knew the fatal lite was broken but never repaired it. “There is no doubt in my mind that CNA knew this piece of glass was broken and didn’t do anything for several weeks,” said the source.
In an interview with the Chicago Sun-Times, building commissioner Mary Richardson-Lowry also alleged that CNA knew of the problem prior to the incident. She accused CNA Insurance of concealing its cracked window problem and making temporary repairs without a permit.
USGlass also contacted MTH Industries of Chicago, IL, the glass company currently working on repairs of the building. MTH president Lyle Hill commented on the enormity of the situation and the complexity of issues involved. “There are a number of unusual circumstances surrounding this tragedy and it will take some time to sort out truth from fiction,” said Hill. “To date there has been much misinformation distributed concerning the fatal incident. It will take time to determine the facts surrounding the situation.”                

     wpe10.jpg (3454 bytes)    NFRC to Require SHGC and VT as Mandatory Ratings

Window manufacturers will now be required to rate solar heat gain coefficient (SHGC) and visible transmittance (VT) for all products submitted for National Fenestration Rating Council (NFRC) certification, according to the NFRC. Currently, the NFRC requires participating manufacturers to rate only U-factor: SHGC and VT are optional.
“Requiring the additional ratings will provide consumers, builders, architects, code officials and others with new information that will allow them to make even more informed choiced when it comes to selecting windows, doors and skylights,” said NFRC administrator Susan Douglas.
The NFRC board of directors made the decision at its recent fall policy meeting in Stuart, FL. The board established a compliance date of January 1, 2001.


LEGAL

Texas Glass Company Charged with Bid-Rigging
An investigation into suspected bid-rigging in the architectural flat glass industry recently resulted in a one-count felony charge against Lubbock Glass & Mirror company of Lubbock, TX. The company and its president were charged with rigging bids on contracts to supply architectural flat glass to general contractors in the Lubbock area, according to the Department of Justice. The charge, filed in the U.S. District Court in Lubbock, claims the company and its president conspired with unnamed conspirators to submit collusive, noncompetitive and rigged bids to increase the profit markups on bids to general contractors for contracts to supply architectural flat glass. According to the Department of Justice, the bid-rigging occurred from March 1991 until at least May 1998.
The maximum penalty for a corporation convicted of violating the Sherman Act is a fine of $10 million. The maximum penalty for an individual convicted of violating the Sherman Act is three years in prison and a fine of $350,000.
This is not the first time Texas has been plagued with price-fixing charges. Last year, Crafton’s Glass of Lubbock pled guilty to conspiring with other auto glass shops to fix automotive replacement glass prices in the area (see October 1998 USGlass, page 18). Additionally, earlier this year, eight Texas glass shops charged with violations of the Sherman Antitrust Act and Clayton Act filed an appeal.


CONSTRUCTION

Construction Contracts Fall 5 Percent in July
Construction contracts fell 5 percent in July according to F.W. Dodge of the McGraw-Hill Construction Information Group. Although the rate of contracting for nonresidential building grew slightly, the rate of contracting for housing and public works declined.
Residential building dropped 11 percent during July. According to McGraw-Hill, factors contributing to the decline could be rising mortgage rates and shortages in labor and materials.
Nonbuilding construction fell 5 percent while nonresidential building had a modest gain of 5 percent.
With the strong performance in the beginning of this year, it is still expected that the overall rate of contracts for 1999 will be higher than the rate for 1998. The vice president of economic affairs at Dodge, Robert A. Murray, says, “the construction industry is still well on the way to seeing growth in the 6 to 7 percent range for 1999.”


COMPANIES

Lilly Industries Downsizes
Lilly Industries Inc., of Indianapolis, IN, has announced the termination of 80 full-time employees. The previously announced closing of three manufacturing facilities will result in the additional loss of approximately 70 employees. “These employment reductions are a part of our overall plan to increase operating efficiency and improve profit margins,” said Robert A. Taylor, Lilly’s president and chief operating officer.
And, the downsizing may not yet be over. Taylor says, “We will continue to aggressively pursue plant consolidations, supply chain management, and other cost reduction initiatives to bring more of our sales dollar to the bottom line.”


ASSOCIATIONS

BEMA Prepares for the Future
In a recent meeting in Atlanta, GA, the Bath Enclosure Manufacturers Association (BEMA) set its future course by deciding to pursue five action items that include undertaking an aggressive public relations program, expanding and refining its website, creating value in its name, generating greater member involvement and broadening its revenue base.
According to Bill Furr, an association member from Coastal Industries in Jacksonville, FL, one of the primary goals of the meeting was to develop ways to legitimize the name of the association. “We met to come up with a way to strengthen the name of BEMA to help out members,” he said. “Our goal is to create credibility for the logo with consumers and bring in more members.”
To gain more recognition with consumers, the association will launch a public relations program targeting consumer-oriented media. “We are going to have different members write articles for retail publications like Better Homes and Gardens,” Furr said. He said these articles will explain to
consumers the ease with which enclosures can be cleaned and their overall cost effectiveness.
With this emphasis on strengthening its label, BEMA would also like to set some specifications on the products it endorses without acting as a regulatory agency. “We need some kind of standard set,” Furr said. “If you buy a product with a BEMA logo you have to be assured that the product is made to certain standards. However, we don’t want to become a regulatory agency as a lot of associations are.”
Another aspect of BEMA’s growth plan is to create a category for fabricators. According to Furr, “We want to add a class of fabricators to the association,” he said. “We want to create a way to integrate them into the system so we can help them and they can help us.”
While BEMA is already well-funded, due to the partnership it has with Proctor and Gamble, Furr says there is always room for growth. “We are not lacking in funds,” he said. “But we need to take it to the next level. That is to get the consumers aware of the fact that shower doors are a safe
commodity.”


MANUFACTURING, DISTRIBUTION AND PRODUCTION

Frank Lowe Rubber & Gasket To Expand Facility
The Frank Lowe Rubber & Gasket Co. Inc. of Farmingdale, NY, has announced plans to expand its facility. This will provide additional office space, expanded warehouse capacity and enable the production department to acquire new equipment. The company says the expansion will allow it to keep higher levels of stock and provide faster turnaround time for orders.

PPG Completes $20 Million Rebuild in Texas
PPG Industries of Pittsburgh, PA, has completed a $20 million rebuild on two float glass production lines at its Wichita Falls, TX, plants. With the completion of this renovation, all six PPG flat glass production lines in North America are operating at full capacity, according to Richard Leggett, vice president of flat glass.
The Wichita Falls plant will now produce Azurite® architectural glass on its float line. Azurite transmits high levels of light while minimizing solar heat transmission. The company says this tinted float line produces 650 tons of glass or more than 300,000 square feet per day.
“We are on schedule for upgrading and repairing our facilities in order for us to be able to meet the long-term needs of our customers,” said Leggett. “It is important for us to invest in and maintain our operations and add advanced technology. In doing so, we not only are able to meet the requirements of our customers today, but we are investing in the ability to continue to do so tomorrow.”


EXPANSIONS

Guardian to Create Science and Technology Center
Guardian Industries Corp. of Auburn Hills, MI, plans to create a new Science and Technology Center that will consolidate its product design and engineering, research, and development functions. With technology advancing rapidly and increasing global competition, the company says the center will improve its product and process innovation.
“This center demonstrates Guardian’s heightened commitment to leadership in glass technology for the construction and automotive industries and to bringing innovative products and solutions to our customers,” said Russell J. Ebeid, president of Guardian’s Glass Group.


INTERNATIONAL

Adhesives Research Opens Headquarters in Europe

wpe12.jpg (5984 bytes)Adhesives Research’s new facility in Limerick, Ireland, houses an analytical laboratory supporting development and manufacturing.

Adhesives Research Inc. of Glen Rock, PA, has opened a new manufacturing facility at its European corporate headquarters in Limerick, Ireland, with the goal of growing its European business. The facility will manufacture high performance, specialty pressure-sensitive adhesives in the 24,000-square-foot building. The company has been collaborating with the University of Limerick and Materials Ireland, an Irish government agency, to create specialized research programs for developing unique adhesives.
The company said it plans to add administration and research and development facilities within three years.

State Farm Loses Suit; Must Reimburse for Non-OE Parts
In a decision which presents significant implications for all segments of the auto repair industry, a Marion, IL, jury awarded nearly $730 million to a group of State Farm Mutual Automobile Insurance Company policyholders who had sued the Bloomington, IL, insurance giant. In the suit policyholders claimed that State Farm violated the Illinois Consumer Fraud and Deceptive Business Practices Act by not returning vehicles to “pre-loss” condition when it used aftermarket parts. The policyholders’ lawyer successfully argued that aftermarket parts were inferior to the parts originally on the vehicles.
In reaction to the judgement, State Farm temporarily suspended the use of some aftermarket parts, including fenders, hoods and doors. However, in a letter sent out to its Repair First Facilities, the company did not include glass on the list of aftermarket products that were suspended.
Edward B. Rust, chairman and chief executive officer of the company said the decision to suspend these parts was intended to eliminate confusion in the marketplace. “We don’t want our policyholders caught in the middle of the lawsuit-driven confusion and misinformation about the quality of aftermarket parts we specify,” he said.
However, Rust said this is not a permanent decision. “This decision to use these parts makes sense now,” he said. “However, in the long run, not having lower cost, higher quality alternative parts available will be very bad for insurance customers.”
While the company does not mention glass in its list of parts that must be specified as OE, there is a belief among some in the industry that the Marion jury’s decision could bring tremendous change to the industry.
Industry insiders speculate that if OE glass becomes universally specified by insurance companies, producers like Pilkington LOF of Toledo, OH, Guardian Industries of Auburn Hills, MI, and PPG Industries of Pittsburgh, PA, would stand to gain the most because they manufacture much of the original equipment glass used by carmakers. Consequently, aftermarket manufacturers such as Safelite Glass Corporation of Columbus, OH, and Viracon of Owatonna, MN, could lose market share.
While the backlash against aftermarket products could hurt these producers, Robert C. Jungbluth, vice president and general manager of Viracon, says aftermarket glass has to conform to Federal and State Department of Transportation requirements in the United States. “The raw material used in our aftermarket and OE products are the same as many original fabricators, including the glass and vinyl used in laminated windshields,” he said. “In essence, the ARG glass products are considered duplicates of the original in appearance and performance and regulated by law as such.”
Glass shops at the retail level could also notice a change from the ruling. Donovan Trana of Express Auto Glass in Muscatine, IA, is one individual who thinks the suit could bring change, though he admits it is too early to see what will really happen. “I think a lot of glass shops will start looking at OE glass,” he said.
Others in the industry see the decision as something that could shift the base of power away from the networks and large retail auto glass companies and back to the smaller shop owner. This is because many of these large retail operations produce their own glass that is not specified as OE. However, Daryl Anderson of Dakotaland Auto Glass in Lake Norden, SD, holds another view. He says the glass industry will not really be affected by the Marion jury’s decision. “It won’t affect glass,” he said. “I think it is still a matter of economics. I don’t think it will affect the aftermarket auto glass business drastically.”
Still others expect only that State Farm will modify its policyholder agreement to permit the use of aftermarket products.
State Farm has announced it will appeal the decision.

Correction
Joel Falck’s title was misstated (see August 1999 USGlass, page 72). Falck is CFO of TruSeal Technologies.
We regret the error.   


USG

© Copyright 1999 Key Communications, Inc. All rights reserved. No reproduction of any type without expressed written permission.