Volume 48, Issue 1 - January 2013
Do You Know Joe?
USG: You spent 32 years with Honeywell
before coming to Apogee Enterprises. That is a very long time at one company
and a little uncharacteristic of todayís CEOs. Do you feel that such longevity
at one place is more of a help or hindrance at Apogee?
I worked for a very long time at an organization that was totally growth-oriented. And now Iíve come to this organization that was growing, but was not nearly as focused on growth as Honeywell. I can say we now have a tortuous agenda for growth here. We are spending most of our waking hours on where we are going to be in three to five years. We have become rigorous about new product introductions (NPIs). We now have an NPI pipeline and a merger and acquisition pipeline. We [recently introduced] digital printing on glass Ö and itís quite a technology. So we are rapidly moving new products forward.
USG: So whatís the negative side of coming here
after such a long time there?
Eventually I ran two of Honeywellís businesses in the Automation and Control Solutions (ACS) business segment. These businesses were both $3B global HVAC businesses, including the commercial construction/installation business. The goal was to get spec-ed. The advantage Honeywell had is that there was a robust service market and one-third of its annual revenues were recurring service contracts. Thereís really nothing analogous for glass; there is no such thing as a service contract for glass. When it does break, I consider that more of a will-call type business than a true service business. Another third of its business was retrofit work.
USG: Do you think retrofit work is viable for
a company like Harmon?
USG: You know there are an awful lot of
contract glaziers who are not enamored with the new green performance
mandates. They feel itís just another way that architects and general
contractors are shifting liability for energy performance to them. How
do you feel about the green energy programs?
The blast- and hurricane-resistant markets are much more heavily regulated and that has been good for us. It helps weed out the poorer performing players from the industryís top quality companies. Thatís good for us.
USG: You mentioned that Honeywell had
a strong service program. Yet itís no secret that Harmon has spent months
quietly dismantling its service business. Given your history that strikes
me as strange.
Harmon has spent a good bit of time defining its target projects. They focus on medium-sized projects in the $3-5 million range, five to 40 stories. Now, we do make an exception for some of our valued customers who have a need for service repairs. We donít say no to them.
USG: Each segment of the glass industry sees the
part of Apogee with which it deals. Yet the company is really six different
business units. Can you explain how they fit together?
USG: And that is the one that doesnít seem to go with the others ... JP: Itís an $80 million dollar business and a real growth market for us using similar coating process technology as our architectural business. The financial analysts always ask me about its fit and I can state unequivocally that we are keeping it.
USG: Letís turn to the other business units for
a minute. Along with Harmon, thereís Viracon, Wausau, Linetec and Tubelite.
Thereís always been a concern among competitors that Harmon gets preferential
pricing from the other four for projects itís bidding. How would you respond
But we donít have a ďHarmon price.Ē Period. We couldnít keep our customers if we did that. Viraconís sales to Wausau and Harmon, for example, make up less than 8 percent of Viraconís sales. We donít collaborate commercially in that way. We do collaborate in sharing reliable, repeatable business processes.
USG: I donít think itís any secret that
many in the industry saw Harmon as given up for dead a few years ago and
now, it seems revitalized. What role did industry closings and bankruptcies
play in that?
USG: Speaking of contractors going out of business,
Apogee was widely seen as swooping in and grabbing a ton of Trainor work
and Trainor people. How did that come about so quickly?
USG: Apogee also made a number of forays into
international work with very mixed results. It also pulled back from international
work. Any plans to grow outside the United States again?
Our Tru-Vue business is ripe to become international, though. We can export it as the product is made in standard sizes and cut on site. We can export it easily and ship it on pallets. We opened a warehouse in Amsterdam and now are on the map in Europe.
USG: Letís talk a little bit about Viracon.
As you know, Iíve spent more than 30 (yikes!) years in the glass industry.
For much of that Viracon was known as just about the best, most efficient
fabricator in existence. And then, for awhile, it wasnít. Things changed,
as did quality, and lead times stretched to new records. Where do you
feel Viracon is today in terms of quality and timeliness?
You know, we went to Statesboro and told everyone what was going on. We told them not to read anything into this other than what we were telling them. We said weíd be back and we were. More than 80 percent of our employees came back six months later. Some had even gotten other jobs, which they quit to come back to us. And we have great leadership at Viracon, too. Russ [Huffer] was gracious when he knew he was leaving and left the Viracon presidency open for me to fill. Within two months I knew Kelly [Schuller, president of Viracon] was the right person for the job. I couldnít be happier with what heís done. The whole leadership team at Viracon is extremely solid and stable.
USG: I just have a few more questions.
I notice that you have mentioned a few times today that you retired from
Honeywell. Yet, in reality, you really resigned. Itís almost like you
canít bring yourself to say it.
USG: Am I right that leaving must have
been one of the hardest business decisions of your life?
USG: Beyond shareholder return, how are you going
to judge your own success in this position?
USG: Thank you for your time.
Debra Levy is the publisher of USGlass magazine. She can be reached at firstname.lastname@example.org. Read her blog at http://deblog.usglassmag.com, follow her on Twitter @keycomm and ďlikeĒ USGlass magazine on Facebook to receive updates.