Volume 36, Issue 5, May 2001
latest news developments
Economic Slowdown Takes its Toll on the Glass Industry
For the past few months the current economy has been a topic of much discussion, and the question of how it would affect the glass industry has been pondered quite a bit. While there has been little change throughout most of the industry (see related story page 4), primary glass manufacturers are making changes and adjustments in response to industry indicators.
Dearborn, Mich.-based Visteon for instance, posted a drop in its first-quarter results. Overall earnings were only $31 million compared to $147 million in 2000. In its glass segment, Visteon saw $165 million in sales for the first quarter, a $5 million income loss before taxes. In 2000, the company reported $197 million in sales, a $2 million loss for the quarter.
“The first quarter has been interesting,” said Phil Deighton, sales and marketing manager for Visteon. “In some respects it was better than expected, but the entire automotive business has been slow … glass usage is down considerably in automotives,” he added.
Visteon is making cutbacks. According to a news release, 1,800 jobs will be eliminated by the end of the second quarter. According to Deighton, most of the cuts came from support areas such as information technology and marketing. “We are trying to focus and make this as transparent as possible for our customers,” he said.
In addition, Visteon is once again in active talks to sell or joint venture its glass business. Last year the company had announced plans for Pilkington to purchase its glass segment, but talks ended in November (see November 2000 USGlass, page 18 for related article).
Also reporting a drop in first-quarter earnings is PPG Industries of Pittsburgh. In its glass segment though, PPG posted net sales of $583 million compared to $565 million in 2000, while operating income for the segment was $85 million compared to $98 million last year.
The company recently initiated a workforce reduction of 1,500 people—about 4 percent of its average global employment in 2000. It has closed facilities and realigned production “to gain economies of scale.” According to the company, about 80 percent of the workforce reduction involves its coatings operations.
Although Pilkington plc, of the United Kingdom, had not released its first-quarter results at press time, it was expecting positive results. “We expect to announce a further improve gain economies of scale.” According to the company, about 80 percent of the workforce reduction involves its coatings operations.
Although Pilkington plc, of the United Kingdom, had not released its first-quarter results at press time, it was expecting positive results. “We expect to announce a further improvement in our results [in the second half], which is all the more impressive when one considers the adverse impact of the rise in energy prices and the slowdown in the United States,” said Pilkington chief executive Paolo Scaroni.
Production at Guardian Industries Inc., of Auburn Hills, Mich., the only private primary glass manufacturer, is also moderately down in the United States. “Globally, flat glass in Europe and South America is up from last year … in the United States though, production is generally down due to poor weather in the Northeast and Southern regions. Also, a one-time realignment of inventories by the automotive trade has temporarily hampered the demand for glass. Costs however have risen primarily due to the gas and electricity crunch,” said Russ Ebeid, president of Guardian’s glass group.
However, unlike other glass manufacturers, Guardian has not chosen to make any layoffs or cutbacks at any of its plants. “Instead of making layoffs and cutbacks, we chose to re-direct our focus on other lines, thereby retaining the skill level of our people,” said Ebeid. He explained that rather than putting a lot of time into the production of a particular area that is being affected by the economic slow-down, such as OEM automotive glass, the company instead is focusing on other areas that were not affected, such as windshield-replacement glass. “We generally see this [economic slowdown] as an aberration that will self-adjust,” he said.
Rohm and Haas Announces Closing of Insulating Glass Business
Rohm and Haas Co., which is headquartered in Philadelphia, has announced that it will leave the liquid polysulfide (LP) and insulating glass (IG) businesses and will cease production of those products at its chemicals facility in Moss Point, Miss.
“This decision was a difficult one,” said Nick Gutwein, vice president and business director of the company’s adhesives and sealants business. “We have enjoyed a wonderful reputation in the LP and IG markets. However, given the present market dynamics and the substantial investment required at our Moss Point facility, we could no longer justify staying in the business.”
Gutwein attributed the closing to the negative sales and volume growth for the business.
Brian McPeak, a spokesperson for the company, said the main reason for the demise of the business is the increase in new technologies now being used in insulating glass applications—specifically, the increase in polyurethane technology for IG units.
Although McPeak says it had no direct effect on the company’s decision to close the LP/IG businesses housed at Moss Point, Rohm and Haas currently owes the government a total of $38 million in fines for “various violations of [environmental] reporting requirements at the plant.” The company is expected to pay the Environmental Protection Agency (EPA) $22 million in fines and to perform an additional $16 million worth of work in supplemental environmental projects.
“In 1995, I believe, prior to [Rohm and Haas] acquiring the facility, an [EPA] inspection found that the environmental reports submitted to the agency had been falsified in the area of water discharges on the site,” McPeak said. “The company and the agency then conducted a more thorough investigation and they found that there were further violations in both permits and environmental regulations.”
Rohm and Haas entered a settlement in October 2001 with both the EPA and the state of Mississippi to pay the $38 million in fines and to bring the facility up to environmental standards.
The company plans to continue to operate its LP operations at Moss Point through mid-December 2001. All current customer commitments will be met, but new orders and contracts will be accepted on a case by case basis only, according to the company. Rohm and Haas is currently working to notify customers of the decision and providing account managers who will work with them on transitioning to other suppliers or alternate technologies.
PQ Corp. Aquires 100 Percent of Akzo PQ Silica
PQ Corp. of Valley Forge, Pa., and Netherlands-based Akzo Nobel have announced that PQ Corp. will acquire 100 percent of Akzo PQ Silica, a 50-50 joint venture of both companies. The silicate and silica-related operations involved in this purchase will be known as PQ Europe.
Prestik Manufacturing Inc. Files for Bankruptcy
Prestik Manufacturing Inc. of Mississauga, Ontario, filed for an assignment of bankruptcy on February 20.
The creditors held their first meeting on March 14 in Toronto. According to a statement issued by the firm of Soberman Isenbaum Colomby Tessis Inc., a receivers and trustees firm, the company’s deficiency is in excess of $845,000.
Among the creditors listed, to which Prestik owes an amount of $25 or more, are Apogee Steel Fabrication Inc., CNC Metal Fabrication and Specialty Metal Products Ltd.
Luoyang Float Glass Group of China has recently produced what Chinese glass experts claim to be the world’s thickest float glass, at 25-mm-thick …
The April 7 breakout of three prisoners at a jail in Santa Fe, N.M., has caused concerns to arise over how secure the windows in the prison actually are. Accor-ding to the April 23 issue of Engineering News Record (ENR) the three prisoners, using tools apparently acquired through a security guard, sawed through a 4-inch diameter tubular steel bar welded across the frame of a 1- by 3-feet insulating window. In addition, the window was reported to have had 1-inch thick glazing. “Sheriff Raymond L. Sisneros says concerns were raised about window security during construction and that the bar welded on the window to answer concerns should have been solid,” reported ENR.
However, according to Paul Doucette of Cornell Companies Inc. of Houston, operators of the prison, the hollow bar was part of the initial design. “It’s in the plans. You couldn’t weld it in later … it’s an integral piece of the frame, not an add-on feature,” he said.
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