Volume 38, Issue 2, February 2003

ISSUE@HAND

Chinese Food for Thought

“Breakfast with the CEOs” is a much-anticipated annual presentation at Glass Week (see related story, "Turning Point"), and this year was no exception. “Breakfast” is anticipated in much the same way as a great political debate might be. No one really expects any significant news, but everyone tunes in just in case someone stumbles, looks at his watch or otherwise shows a hint of vulnerability. Whether it was the hope of a true dialogue—or perhaps a fist fight—the panel played to a full audience on Wednesday, January 22, in Dana Point, Calif.

While no catchy “lock box” phraseology emerged from the session, one important story did. It has to do with the growing replacement of U.S. glass products by Chinese imports. Each of the four CEOs (neither Pilkington nor VVP were represented this year.) had his own individual take on the shifting market. “Ask any casual furniture make what has happened to his market,” challenged Roger Kennedy, president and CEO of AFG Industries. “Casual furniture manufacturing is all disappearing offshore. Every single one of these manufacturers is developing a China policy.” (By the way, for more about Kennedy, see the interview).

“The threat from China will change the way we do business and the way commodity suppliers [in the glass industry] produce their products,” said Barry McGee of PPG Industries. “If we ignore it, we will be in deep, deep trouble.”

Others were not quite so sure. “I see today’s situation with China as an aberration that will lessen as the country develops. There is still quite a bit of consolidation going on,” said Russ Ebeid, president of Guardian Glass Group. “Long-term, it is not quite such a threat.” 

Kennedy was in tacit agreement. “Long term, the threat will be minimized as China develops and starts consuming on its own,” he added.

“This is not an issue to be ignored,” said Al Tervalon, CEO of Visteon’s Glass Division. “Remember the Detroit automakers who used to say the Japanese threat was not real? Where are they now? Well, this is real and I do take it very, very seriously.”

Indeed, the “China problem” was raised as an important concern by the Bath Enclosure Manufacturers Association (bema) during that group’s annual meeting last March (see USGlass, April 2002). 

At issue here are the definitions of free trade and fair trade. Other industries in the country have already faced these with respect to Chinese products, and now it is the commercial glass market’s turn. Though this time, I don’t necessarily think that identifying the problem is half of the solution.
“Breakfast” also had its light notes. Ebeid quipped that it was “a real pleasure to see someone from Visteon here more than once,” referring to the many changes in leadership that the company has seen over the past few years.

It’s cold in the East—so stay warm. It should be spring by the time we all visit Atlanta next month, so please stop by and see us at the show. Our show preview starts on page 72. -Deb 


USG

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