Volume 43, Issue 5 - May 2008

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AGC North America Closes Three Plants, 
Plans to Sell Fabrication Business
 

Beginning April 16 and continuing over the next six months, AGC Flat Glass North America (AFNA) will cease operations at three of its North American facilities: its float glass and coating plant in Victorville, Calif.; a coating facility in Hampton, Iowa; and a float glass plant in St. Augustine, Quebec. One production line at the Greenland, Tenn., manufacturing plant also will be closed. The move will reduce AFNA parent company Asahi Glass’s glass production capacity in North America by about 40 percent. Approximately 800 employees will be affected by the closings. 

“These are difficult decisions, and they in no way reflect the skills and capabilities of AGC’s outstanding employees across its North American operations,” says Brad Kitterman, president and chief executive officer of AFNA. 

“These decisions were made to minimize the impact of ongoing market trends, by eliminating glass overcapacity and non-core product segments. While difficult, the announcements we are making today will enable AGC Flat Glass North America to create a strong base for future growth—by focusing on the most strategically important and high-growth segments of our business.”

According to a press release from the company, Asahi Glass will concentrate on producing glass for solar cells, sales of which are expected to grow by 40 percent annually on a global basis, as well as raw glass for automotive use and value-added building products. In addition to these immediate closures, AFNA plans to divest its glass fabrication business by the end of 2008. This business segment—which focuses on tempering, laminating and insulating glass products—includes more than 30 locations throughout North America.

“We are confident that our fabrication business will be an attractive acquisition and will remain viable,” Kitterman says. “However, this business unit falls outside our new strategic goals, which include focusing on glass production and coating technologies, not finishing operations.”

As a result of these changes in its corporate structure and geographic footprint, AFNA also will make changes in its corporate staffing, as well as its research and development (R&D) staffing. The company’s corporate services unit in Kingsport, Tenn., will be reduced and reconfigured. In addition, the company’s research and development capabilities will be consolidated in Greenland and Abingdon, Va., which means closing an R&D facility in Petaluma, Calif. In all, about 100 jobs will be eliminated in these two areas. These changes will take place through the end of 2008, as the new restructuring plan is implemented across the country.

According to a press release issued by Asahi Glass, the AFNA parent company has been working to improve profitability since 2006, when it overhauled management and shut down AFNA’s Cinnaminson plant (see January 2007 USGlass, page 16).

In addition, the continued decline in the North American housing market has created a serious oversupply situation for the company. The release states: “the earnings structure of AFNA excessively depends on clear float glass—general-purpose glass that is difficult to differentiate from products of competitors. This, combined with higher costs driven by a price surge in raw materials, has been squeezing Asahi Glass’ profitability in the region.” The release also noted that the decision to stop architectural sputter coating operations at AFNA’s Victorville and Hampton, Iowa, plants, was due to an excessive output capacity compared with the size of that market. 

The company will concentrate production of its full commercial and residential product range at the Abingdon facility. Five of AFNA’s plants will be unaffected by the announcement and will continue their current operations. They include plants in Kingsport; Richmond, Ky.; Spring Hill, Kan.; Abingdon; and Jerry Run, W.Va.

“These five plants—along with the remaining production line at our Greenland plant—form the basis of our North American operations—and will continue to be of utmost importance to AGC in the future,” Kitterman says.

He continues, “Because these decisions affect our people, their families and the communities in which we operate, we are approaching them with great sensitivity. Our focus will be on doing whatever we can to help our employees through this difficult time.”

Kitterman also notes that the company will work with its customers to ensure that AGC Flat Glass North America continues to deliver the same high-quality products and services customers have come to expect. “For 30 years, this company has been a leader and innovator in the North American glass marketplace, and that will not change. In fact, by refocusing and re-energizing our business, we are striving to deliver even greater value, and more innovative products, to our customers in the solar, construction and automotive markets.”

As a result of this restructuring program, Asahi Glass expects to incur an extraordinary loss of approximately $132 million USD (13.5 billion yen) in the second quarter of fiscal year 2008. There will be no change in the outlook for the fiscal year 2008, since the loss has already been factored in. 

Zeledyne Plans to Make Glass “Core Business,” New CEO Says
Zeledyne LLC announced in April that it had purchased the Ford Motor Co. Automotive Components Holdings (ACH) glass business and its plants in Nashville, Tenn., and Tulsa, Okla., and its subsidiary Vidriocar in Ciudad Juarez, Mexico. Also included are the leases for a warehouse in Lebanon, Tenn., and engineering offices in Allen Park, Mich. “Zeledyne has a tremendous opportunity for growth,” says Robert Price, Zeledyne chairperson. “We plan to expand all three areas of the business: automotive glass as original equipment for vehicles; Carlite, the automotive aftermarket glass; and Versalux, high-quality architectural glass. With an energetic new senior management team and our talented UAW workforce we expect to increase dramatically our market share both nationally and internationally.”

Michael J. McCarney has been appointed as the new chief executive officer for Zeledyne LLC. In an interview with USGlass, McCarney noted that Zeledyne plans to make glass its “core business.” “The key in our strategy right now is that glass has been kind of a secondary business for both Ford when they owned it, Visteon when they owned it and, quite frankly, even ACH under the Ford umbrella,” McCarney says. “But under the Zeledyne name plate, this is our core business.”

With this new focus, the company also plans to upgrade much of the existing equipment at its plants. “Two of our float lines have recently been rebuilt—our Nashville float and our T2 float in Tulsa is under construction right now, and we have plans for our third float in Tulsa,” he says. “All three will be brought up to the latest level and, by the end of next year, we’ll have them all completely re-built.”

All of the company’s current brand names, including Versalux architectural glass, now will be branded with the Zeledyne name. Otherwise, no interruptions in production nor major personnel changes are expected.

“We’re actually a privately owned company taking over the existing facilities and we’re taking most of the existing employees with us,” says McCarney, who brings 30 years experience with Ford to his new position. “We expect it to be a seamless transition.”

Jarmo Sulkava of Uniglass Dies on Jobsite in New York
Jarmo Olavi Sulkava, the U.S. service agent for Uniglass Engineering in Tampere, Finland, died while working at Rochester Insulated Glass (RIG) in Manchester, N.Y., on April 2. “First, we regret the fact that the accident happened,” said Richard Wolk, president of RIG, during an interview with USGlass. “He was a good friend, and a good technician as well. He’ll be missed by his family and us as a family and by all of the people that are working in our factory, employed by us and contract people. We liked him. We’d known him for a long time.” Following the accident, several local newspapers had printed that an autopsy had revealed electrocution to be the cause of death, but Wolk said that was not the case. However, he was not able to reveal the cause of the fatality due to the “litigious” nature of the fatality.

“The cause of the accident is still under investigation,” Wolk said. The accident is being investigated by the state Occupational Safety Health Administration (OSHA) as a standard procedure. OSHA regulations require employers to report deaths on the job within eight hours. According to information from OSHA, an investigation can take as long as six months. However, Wolk reported on April 8, “OSHA has cleared RIG of any wrongdoing.” A spokesperson for OSHA’s Region 1 office noted at press time that an investigation of Uniglass is still open. OSHA is not able to comment on an ongoing investigation.

Wolk added, “We feel that the investigation will continue and that people will learn from a mistake that was made in the field.” According to information from Uniglass, Sulkava was responsible for machinery servicing and maintenance and supervising installations. 

A native of Murole, Finland, living in Moon Township, Pa., he had been in the glass industry since 1984. He leaves behind his wife, Kim, sons Vaughan and Pietari, and his stepson, Nathan, as well as his parents, sister, nephews and nieces. The family has asked that memorials be made to the “Finnish Nationality Class Room Committee,” at the University of Pittsburgh. RIG had recently expanded its facility (see March 2008 USGlass, page 24)


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