Volume 42, Issue 2 - February 2007

Cardinal Rule

Roger O’Shaughnessy talks about his career, his company and why he never sits for interviews like this
by Debra Levy

Roger O’Shaughnessy began as a factory worker with Cardinal Insulated Glass Co. in 1967 and worked his way through the ranks, and has reigned as president of the glass manufacturer for nearly 40 years. O’Shaughnessy took some time out of his busy schedule to sit down with Debra Levy of USGlass magazine.

Q—Well, I guess we should start at the beginning. How did you get started in the glass industry?
A—I flunked out of college, that’s how [laughs]. I flunked out of college and went to work for a little glass company called Cardinal with 12 employees. They made insulating glass for a few glass shops and for the Gordon Sash and Door Co. Morrie Gordon was the founder.

Q—Where did you start?
A—I worked in the factory in the boxing department and had a history of carpentry. I worked in the factory in various jobs until 1967 and then Mr. Gordon asked me to be president. I thought that was a pretty good idea. The company was doing about $250,000 in annual sales. Mr. Gordon sold me 5 percent of the company for $1,366. I didn’t have the money so he took a note. 

Q—You must have really had to hit the ground running. You were so young to have all that responsibility …
A—Oh, yes, I learned a lot of lessons fast. Just one year after I became president, I learned my first big lesson real quick. I remember it was early 1969 and the bank jerked our line of credit out from under us that year. We had gone seven years without making a profit and the widow of the founder had guaranteed the loans. Well, fortunately we were able to make a profit and 1969 became our first profitable year. 

Q—It takes a lot to go from $250,000 in sales to what Cardinal is today. When did you start to really grow?
A—We had our first expansion in 1973 in Greenfield, Iowa. We got to $3 million in sales with the same basic product mix and had gained some share in the residential market. We had had some problems, but were able to grow. Luckily, there aren’t many business problems that don’t get solved by higher prices and larger volume [smiles].

Q—What kind of problems?
A—We had experienced major failure of products in 1972. So we decided that we would make only the best product and set on the course to that. We also decided that every location we established would be its own profit center. 

The Arab oil embargo forced people to think of using better insulating products. In 1982 we decided to put low-E coatings on glass. We had asked the glass manufacturers to do it, but none of them believed it practical or profitable. Cardinal already had some triple-pane business and we knew intuitively that lighter units would be a selling point. Andersen Windows saw our story and gave us a purchase commitment

.In 1982, we were a $12-million company and by 1987 we were a $100 million. By 1990, we were at $200 million.

Q—I can’t imagine you ever dreamed you’d be running a company that large when you started out.
A—People think differently about careers today than they did back then. I was looking for a job in the beginning, not a career. I remember a number of times in the beginning when I couldn’t take my check to the bank on Friday but had to hold it till we got some money in on Monday.

Q—Something almost every small business owner can relate to.
A—Exactly. It’s something you don’t forget. 

Q—The early 1990s proved a very tough time for the industry. How did Cardinal handle it?
A—In 1989, we felt that the wild price swings in materials and fuel were affecting our business and that we ought to stabilize costs for our customers. We tried to do joint ventures with the glassmakers without much success. Then, through a stroke of luck, we were able to build a plant with AFG Industries—that really completed the third step in our business plan and helped us achieve the vertical integration we desired.

In April 1990, the market fell apart for high-rise construction. Prices for construction fell 40 percent in 2 months. We said privately that it was a good thing we had stayed in the residential market. We didn’t have much choice. Three hundred companies in the IG business went out of business during that time. 

Q—But things turned around eventually? 
A—It opened up a bit in 1992. In 1991, we had discovered how to make double silver coatings and rushed to install the equipment necessary. We bought and changed out three coaters in five months. We found you could preserve the qualities of low-E and get solar control characteristics. It was a great advantage.

A lot of the companies in the business at the time were public companies. They really didn’t have the drive or the market understanding to do it. Fortunately we were close to the market and were highly motivated to improve Low-E products. We were pretty determined and we did it.

PPG and LOF had a similar glass product but it could not be converted into low-E effectively so we enjoyed a lot of growth because these companies didn’t have an effective product.

Q—So you think the difference in ownership structure made that big a difference?
A—Yes. Now more than ever it’s critical. We have to keep the merry-go-round moving so quickly that other companies can’t grow as fast as we can. It’s fair to say our private ownership creates such an atmosphere very quickly. All our managers are owners in the business. There are no more than 70 people who own stock and they run the business. Delays waiting for board approvals can be short-circuited.

Q—You’ve done a lot of new product development over the year. Is there anything you passed on that you wished you hadn’t?
A—[long pause] I think we missed early opportunities to be in Europe. As the technology developed there was a window we could have jumped into, but we were occupied here as well and didn’t do it. 

Q—You and your company are known as being very low-key. The fact that it took you nearly 22 years before agreeing to an interview is testament to this. Is this intentional? Do you run the company quietly on purpose?
A—Part of it comes from the personalities involved. Part of it is because of the market we are in. We are an OEM supplier to numerous major branded window companies. Branded window companies want their own brand out front. They don’t want their supplier in the spotlight or becoming a brand of their own. We take care of our customers. We keep our names off the trucks. 

Other glass companies have different markets. They may be more into image to procure customers. 

Q—So why do you think the other manufacturers are afraid of you?
A—I never thought of them as being afraid of us, but I know they respect us. We play by different rules. We avoid participating in glass-related trade associations, we avoid industry shows, we avoid going anywhere where we would co-mingle with our competitors.

Q—Well, this industry has a long history of having problems like that.
A—Yes, and as I told somebody once, I’m too old and too rich to go to jail [laughs]. I don’t want the appearance of collusion. I think that because we don’t commingle, that might be perceived as giving us some strength.

Q—Do you have any new products coming along that you’d like to tell us about?
A—We have three new products, but we usually introduce them in slower times. When our customers are busy, they don’t like to introduce new products, but there has been a flurry of interest in these three new products:

First is Preserve®, a plastic film. It is a value-added product for builders. Customers who sell to new construction markets are finding that these products add value without taking any more labor. They add margin without labor. 

Second is our low-maintenance coating. It is different than the others on the market. It is sputtered, not pyrolitic. It’s smooth and a bit less photo-active than other products. The smooth nature of the glass allows dirt to wash off easily.

Then there is LoE2 —a triple silver system that sharpens the curve of the light filter to allow a high level of visible light transmittance. The cost is on the front end with great customer savings on the back end. It is designed for the upscale homeowner who will pay more at purchase time but will save thousands on air conditioning. 

Q—Have you given any thoughts to the future or to your retirement?
A—Well, I love what I’m doing. I have a mind to stick around for a while. I love meeting with customers. If I ever start to think I am too highly placed, I walk through the factory and see the people. It reminds me of what we all have in common—trying to make a living to take care of your family. That’s the same way I started.

Q-What do you think are the biggest changes you’ve made personally during your career?
A—[long pause] Life brings you certain realizations. It makes you change. I am more to the center of right than I used to be. I am less opinionated and more open minded. Things I was absolutely certain of, I am no longer. 

Q—Like what for example?
A—Things like national health care, which I used to think was a terrible idea. Now I think we should re-examine it. Our health care system today is clearly broken. The cost increases that should be incurred by the government for Medicare and Medicaid are actually being applied and paid by the private sector. The government doesn’t pay those anymore. 

Q—What advice would you have for the window industry?
A—I don’t think our industry speaks to the public. Our customers speak to the builders Decisions on window purchases are made by builders and regulators. Builders are interested in their own future[s]. The window industry itself doesn’t have a voice to the consumer. The food industry talks directly to the consumer, the fashion industry certainly does. We don’t talk to the consumers or builders. Some things, like low-E, catch on, but it’s because regulators have required it. Some production builders say they have 10 to 15 minutes with customers to make the sale. They can’t talk about window efficiency in that time. So no one does. 

Q—Cardinal started out as a small business. What advice do you have for our readers who are running small businesses?
A—My advice is the same for any sized company, because it’s been successful for us at every size: Focus your business. Add value. Listen to your customers. Make value and innovate.

Q—I need to turn away from business for a minute and ask you, what types of things you do for fun?
A—I enjoy spending time on my boat and also seeing my three daughters and seven grandkids whenever I get the chance. I have seven grandchildren ranging in age from six months to 12 years.

Q—There’s nothing like a Dad with his girls, is there?
A—Nice daughters are nice for fathers to come home to. Anything they want to do is neat. 

Q—Thank you very much for your time. It’s been an honor.
A—Was it worth the trip?

Q—And the 22-year wait? Absolutely. Thank you.
A—Thank you. 

the author
Debra Levy is the publisher of USGlass magazine.



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