Volume 40,   Issue 9                    September  2005

Hurricane Katrina: 

Looking Back at the Storm’s Impact on the Industry 
and Forward to How it Will Change Us

By Ellen Giard Chilcoat, Charles Cumpston and Brigid O’Leary

On August 29, Hurricane Katrina plowed her way through much of the Gulf Coast region, wreaking havoc and leaving trails of broken glass in her wake. The storm, which had high wind speeds of 175 miles per hour, weakened before landfall to a Category 4 and turned slightly eastward before coming ashore early that Monday morning. Reports of devastation filled newspapers, television reports and Web coverage throughout the day. Scores of windows were reported blown out at New Orleans hotels. Among the earliest reports were the destruction of the French doors on the balcony at the hotel Le Richelieu in the French Quarter of the city, and broken windows throughout the high-rise Hyatt in the city’s downtown waterfront area (see cover photo).

And what exactly happened to the Hyatt is a mystery at this point. Some compared the hotel looking more like it had undergone a bomb blast rather than a hurricane. So, why did all of the glass blow out? John Bush, director of laminated glass products and developments with Oldcastle Glass, offered three possible reasons:

• A huge amount of windborne debris, such as gravel off an adjacent building or another building falling apart;
• The Hyatt had become pressurized and this blew the glass out. The building could have been pressurized if a door was left open or large picture window blew out; or
• There was a tornado within the hurricane.

“All I know, is that if it had been laminated glass the glass may have cracked, but the building would be safe,” Bush said. “I suspect that now the building may have to be demolished because if and when the rain gets in there will be a huge clean-up.”
It’s too soon to say for certain just how much damage was done, but some Hurricane Katrina damage estimates are saying the storm could very well be the most costly and destructive natural disaster ever to have impacted North America. In fact, at press time some damage estimates have been projected to be more than $35 billion, very likely making the storm the costliest Atlantic hurricane of all time.

Local Effects
Before Hurricane Katrina made landfall, people with the means to evacuate had left their homes on the coast in cities such as New Orleans and Biloxi and Gulfport, Miss., headed inland for a safe place to ride out the storm. Many went to Baton Rouge, La., and in the wake of the storm, the sheer volume of newly homeless people is having a far more reaching effect than anyone could have anticipated.

“The traffic is insane,” said Keith Gueho, general manager of Bengal Glass and Mirror in Baton Rouge, 80 miles north of New Orleans. Some parts of Baton Rouge were out of power for up to four days in the immediate aftermath of the hurricane.

Gueho was in a hurry when he spoke with USGlass magazine on September 6, 2005. Business was hopping and, traffic aside, Gueho had a lot on his mind and in his shop. The anxiety and stress of dealing with post-apocalyptic conditions was evident in his voice as he described the situation the evacuees in Baton Rouge are in right now.

“Everyone got to go back into Jefferson Parish yesterday. It was considered dry there, meaning there wasn’t supposed to be any standing water and they were just out of electricity and telephone service. Everyone came back, though, and said there was water waist-deep in the houses. Those people aren’t moving back any sooner than anyone else,” Gueho said.
And just when those displaced by the hurricane will be able to return home is very uncertain; in that uncertainty, glass replacement isn’t very high on the priority list.

“Right now everyone is scattered all over the states and in refugee camps. They can’t stay there forever. They need a place to live. Eventually sales will pick up, but it will probably be more than a year, as there are things you need like food and water and communication before you worry about rebuilding things and replacing glass. People are more worried about getting water than they are about the glass in their houses. Last week, they were putting bags over the windows that have been blown out. They’re worrying more about survival than glass. It’ll probably pick up later when things get better. That’s the scenario I’m picturing. Some of my customers don’t even have telephone service right now,” said Arthur Sartain, owner of Attala Glass in Ethel, Miss., 200 miles north of Biloxi.

“I’ve heard they’re [offering] government housing to put up those people because many who lost their homes are on retirement incomes and can’t afford to fix or rebuild what they had,” Sartain continued. “Up here it’s going to be business on a one-to-one basis. I’m in the middle of the state. We didn’t get wiped out like Gulfport and Biloxi.”

Phenix City, Ala., near the Georgia boarder, was hardly touched by the hurricane itself, but it has taken in many an evacuating family, as have many other communities across the South. 
“We didn’t even get hard rain,” said Raymond Miles, president of East Alabama Glass in Phenix City. “We’ve got a lot of evacuees here, many are staying in the Civic Center.”

And evacuees are everywhere. Monroe, La., in the northern part of the state is 300 miles from New Orleans and 250 miles from Baton Rouge, is also packed with displaced citizens.
“We’ve got quite a few evacuees in Monroe. The convention center is full and the Red Cross shelters are full and they’re still coming north. We had a large migration before Katrina hit of people who left early enough and got out of there. They moved up here with family and friends, and they’re scattered all over town,” said John Ditta, president of Twin City Glass in Monroe, which was also spared much of the strong weather the hurricane brought.

Passing Time Away from Home
With no place to go and no idea when they will be able to return home, many evacuees are preparing for a long stay.

“There’s a bidding war to buy nearly every house in town,” said Gueho, who has also noticed what the retention rate of evacuees in Baton Rouge will do to glass service there.

“There are people who owned glass businesses [in New Orleans and other hard-hit areas] looking just for jobs in Baton Rouge. We’re going to be housing them for who-knows how long. It seems like a year. We had enough glass shops to go around per population. If [the population] doubles, then the workload just doubles unless other people open up [glass shops], but I don’t think that’s going to happen, because there’s no location for them to open,” he said.

Primary Matters 
Fortunately for the primary glass manufacturers, none of their float glass plants were located in the areas hit by the storm. However, companies experienced logistical problems with distribution and fabrication functions. And the soaring cost of fuel, both to run the float furnaces and to power vehicles, is a grave concern.

Fred Wallin, vice president of marketing for AFG Industries Inc. in Kingsport, Tenn., reported that while the storm had no direct effect on any of the company’s primary facilities, three of its fabrication and distribution facilities were affected. 

The Apelousas, La., operation, which was west of the hurricane line, had utility problems. The company estimated that 15 percent of the customers served by the location were affected by the storm. 

“Reaching them was the biggest problem, so everyone used cell phones,” he explained.
AFG’s Baton Rouge facility had some minor roof damage, as well as utility and fuel problems. Wallin said an estimated 80 percent of its customers were affected by the storm.

At the Birmingham, Ala., facility, 15 percent of customers west and south of the location were affected by the hurricane.

“In addition to the [population] devastation to those areas, there were also our direct customers whose businesses were destroyed,” Wallin said. On the primary side, that included fabricators and distributors, and on the fabrication side, the contract glazing companies.

In the long term, Wallin sees a delayed effect in the area on building materials because it will take a while to get into the construction cycle, and then to go from what structures can be salvaged to those that have to be completely rebuilt. 

“The first priority is going to be to reestablish the infrastructure (phones, electricity, water) and then they’ll start assessing what the rebuilding effort is going to be,” he stated.

Roberta Steedman of Pilkington North America in Toledo, Ohio, echoed that timetable. “Typically, the insurance adjusters first need to inspect the storm damage. Next, the clean-up phase is completed and finally, the crews come in to repair the damage,” she stated. “The lag can be anywhere from four weeks to three months on the residential side. Architectural repairs typically take longer, from two to four months up to six months to a year, depending on how long the clean-up phase takes.”

David Smith, logistics manager with Guardian Industries Corp. in Corsicana, Texas, said several major carriers had notified them that they would be enacting the Force Majeure (Act of God), which means that normal pricing, and capacity will be affected. 

“We will probably see spot pricing higher than previously negotiated,” he explained. “In the beginning, there were reports of stranded trucks in the stricken area due to flooding.”

Another factor in deliveries, he added, is that carriers are dealing with a lack of backhauls from the affected areas and there has been a severe loss of capacity due to the need to dedicate a large number of assets/drivers to FEMA for its emergency relief efforts.

“Also, there are reports that carriers are sitting in lines of up to four hours to refuel, causing significant delays and further impacting capacity and service,” he said.

Other companies, such as Pittsburgh-based PPG, have not yet gauged the full effect Katrina will have on operations.

“It’s far too early to assess what impact Hurricane Katrina will have on our flat glass business,” stated Jeff Worden, manager of public relations. “In many cases, we haven’t heard from our customers because we suspect they are still trying to recover. Clearly, there will be a need for glass in the Gulf region, but we believe the current glass supply from PPG and others should be adequate. However, logistics were constrained before the hurricane, and it’s only gotten worse,” he added referring to both higher fuel and natural gas prices.

Could it Have Been Different?
Storms, such as Katrina, have been the impetus for the hurricane codes, which are already in place in much of Florida. Also, a requirement for stronger glass in jurisdictions enforcing hurricane codes has resulted in less damage to commercial structures than in the years before the codes started to be changed.

One possible reason Louisiana and Mississippi endured such extreme damage could be the fact that these states do not enforce building codes as stringently as other hurricane-prone areas do. 

“Those states don’t have the same codes as Florida,” said Max Perilstein of Arch Aluminum and Glass. “Places in Florida that were struck during last year’s hurricane season, which had hurricane-resistant products, held up well. Mississippi and Louisiana don’t follow those same codes.”

Mike Fischer, director of codes and regulatory compliance for the Window and Door Manufacturers Association (WDMA), agreed.

“There is a huge difference in the building codes,” he said. “There’s not even a comparison.”

He explained that Florida has been the leader in hurricane codes, followed by Texas and the Carolinas. 

“Part of the reason [for the complacency by Louisiana and Mississippi] is because they have not had a direct hit in years,” said Fischer.

As a result of Hurricane Katrina, Fischer said Louisiana, Mississippi and Alabama are all likely to re-evaluate their building codes.

“Ironically, there was supposed to have been a meeting on August 31 for the State of Louisiana to look at its code requirements, as they are in the process of re-evaluating them,” added Fischer. The meeting, of course, was postponed due to Katrina.

In much the same way Hurricane Andrew changed Florida and its codes, in all likeliness, Katrina will have a similar impact on the Gulf States.

“Yes, we’ll see a change in the codes there,” said Fischer. “Part of the process will be an evaluation of building performance, either at the state level or by the Federal Emergency Management Agency (FEMA). There will also be industry involvement, as well.”

Fischer, along with representatives from other building product industries, as part of the Institute for Building and Home Safety, will soon be traveling to the hurricane sites.

“We’ll be evaluating the building [product] performance to see if codes were sufficient and if they were in compliance.”

The Future
Nanette Lockwood, market manager, specialty products for Solutia Inc., has been extremely involved in hurricane codes and legislation in Florida (see related article in the July 2005 USGlass, page 54), and is now working with two Florida senators trying to interest them in two hurricane-related bills at the federal level.

“One is a tax incentive for building owners and homeowners to retrofit for hurricane-resistance,” said Lockwood. “The second is an incentive for states to adopt and implement a statewide building code,” she added. The incentives, she explained, would hopefully encourage the implementation of statewide building codes, and also offer incentives for both residential and commercial buildings. She said she’s in the process of forming a coalition to drive this effort at both the state and federal levels, and encouraged industry involvement. 

“It took Hurricane Andrew to bring Florida from [about] 400 different building codes to one,” said Lockwood. “Other states have been reluctant [to do the same] because they have not had their Andrew. But this [Katrina] could be the impetus for them to move forward.”

Changes in Products
According to Jim McCool, design engineering manager with Arch Aluminum & Glass, when it comes to developing hurricane-resistant products, manufacturers have to keep in mind the ultimate goal is safety.

“We cannot look at profitability. We have to look at how we can make something stronger and safer … more economic to install,” McCool said. “The industry can make a big difference; it should look at helping make people safe.”

McCool also stressed the importance of product testing.

“We need to follow Dade County protocol when testing; it’s the strongest,” he said. “And, the entire system needs to be tested, and you need to have test lab reports. Don’t take the cheap and easy way out.”

The Aftermath
Homes, lives and communities were destroyed. Recovery is ongoing, and eventually rebuilding will begin. What does that mean for the glass industry? At least one shop owner feels that it is too early to tell.

“At this point it’s hard to say. It’s going to take some more assessing of the damages,” said Ditta. “I have not really heard anything about [reconstruction]. No one can get in and assess the damage. All you can see is what is on TV. I know there’s a lot of broken glass.”

After 26 years in the business, Sartain knows everyone will recover in time, but as for preparations in the future, that remains to be seen. With all the talk of code compliance, the one question Sartain hears most often is one he feels is ludicrous.

“People will ask, ‘Will it withstand a Category 5 hurricane?’ No one knows what a Category 5 hurricane is going to do or what it’s going to be like,” he said.

But what a Category 4 can do, Ditta summed up in four words.

“It’s just a mess. That’s about all you can call it. One big mess.” 

The Authors:
Ellen Giard Chilcoat, Charles Cumpston and Brigid O’Leary are the editor, contributing editor and assistant editor of USGlass magazine, respectively.

Glass Industry’s Most Famous Gulf Coast Resident Unharmed
Gulfport, Miss., inhabitant Greg Carney, who serves as the technical director for the Glass Association of North America (GANA), along with his wife, children and his parents, remained in Gulfport throughout Hurricane Katrina. 

“While we lost most of our shingles and felt paper on our roof, had three holes in the roof (as a result of the chimney falling) that allowed water to pour into the house and ended up with a real mess with soggy walls and ceilings, at least we have walls and a home that can be cleaned up and repaired,” Carney told USGlass. 

GANA has since set up a fund to help assist Greg. Non-deductible cash donations (gifts) may be sent to this fund. Donations will be maintained at the GANA headquarters until GANA is able to get them into the Gulfport, Miss., area and disburse them to Greg.

If you wish to send a donation, please mail it to the below address, making it out to GANA, and ensuring to note on the check memo area “Non-Deductible Cash Donation (Gift) for Greg Carney.”

Glass Association of North America
Attn: Greg Carney - Hurricane Katrina Relief Effort
2945 SW Wanamaker Drive, Suite A
Topeka, KS 66614

If you have any questions or need additional information, contact the GANA office at 785/271-0208.

Insurance Industry Facing Changes, Challenges in Katrina’s Wake
The insurance industry is facing multiple challenges and some immediate changes to how business can and is being conducted in the aftermath of Hurricane Katrina.

On the forefront of the situation, the primary setback for claims adjusters is getting to the affected areas for damage assessment. With New Orleans off limits and other affected areas in need of assistance, many insurance providers are sending staff to the areas with less destruction first, and then working into areas that are currently under water or more severely damaged. 

What effect the whole situation will have on insurance rates is unclear, though the common thought—or at least common reporting in the public media such as the Washington Post and the Wall Street Journal—is that insurance rates will rise. Current estimates for the total damages running generally between $14 billion and $35 billion, and it will definitely change the insurance industry market. Just how much rates will increase and how a higher rate will be applied is still under speculation. 


USG

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