Volume 48, Issue 10- October 2013

Battered and Bruised, But Still Standing
Recovery is Slow as the Midwestern Glass Industry
Looks to Get Back on its Feet
By John Hollis


Lou Cerny says the eye test is all you need when assessing the state of the glass industry in Chicago these days.

“You do see a few cranes here and there,” says Cerny, the vice president and project manager for Chicago-based Arlington Glass, “but four or five years ago, you used to always see 15 cranes anytime you drove through Chicago. You’re lucky to see four or five now.”

Cerny’s unscientific review was pretty much echoed by several other glass companies throughout the Midwest reached during an informal survey by USGlass magazine. With construction figures still nowhere near the robust levels they once enjoyed, glass companies are having to make do with less and be more selective in the projects they take.

The recession hit the construction industry hardest, for the most part taking the glass industry down along with it. The pains are more obvious in regions such as the southeast (see related article in the September 2013 USGlass, page 84), but no area of the country was spared the economic malaise, the Midwest included.

Yet, the Midwest glass industry is slowly picking itself up off the floor as the economy improves. As in the case in the southeast, smaller projects such as storefronts and interior glass are more prevalent, even if smaller in scope and payout. Public sector jobs continue to be scarce with continued government reticence, making bids more competitive than ever and for a greater sense of urgency for each company involved, Cerny says.

Relief appears slow in coming, according to recently released figures by the Associated General Contractors of America (AGCA). Total construction spending reached a four-year high, although the industry as a whole continued its spotty recovery. More states posted year-over-year gains, although they were highly in concentrated larger, metropolitan areas.

“We’re definitely seeing more activity in the market now, compared to a couple of years ago,” says Matt Notting, the president of Waterloo, Iowa-based Aluminum Glass Co. Inc.

Overall, however, most states posted decreases compared with June. Of the 12 states defined by the Census Bureau as being in the Midwest, just seven—Illinois (+1,900), Iowa (+4,800), North Dakota (+1,500), Minnesota (+1,600), Wisconsin (+700), Missouri (+7,900) and Nebraska (+1,100)—posted gains in constructions jobs over the past year and all were small gains, according to the AGCA.

Kansas was the hardest-hit of all the Midwestern states, hemorrhaging 1,800 jobs over the previous year. Overall, nonresidential construction lost 3,300 jobs nationally in August, according to the September 6 employment report by the U.S. Department of Labor.

But there remains ample reason for those in the Midwestern glass industry to remain optimistic.

“Business seems to have taken a little uptick,” Cerny says. “It’s getting better. The numbers still aren’t what they used to be, but it’s getting better.”

He’d get no argument from Mary Lee Sullivan, one of the owners of Minnesota-based Glass and Mirror Inc. Sullivan says her company has enjoyed a “really, really good year” in 2013 and has seen business expand since 2010.

She’s one of the lucky ones.

Making the Most of Things in Chi-Town

Tight budgets and overall uncertainty has meant little demand from the federal and state governments for the kind of large-scale building projects that used to be so prevalent before the recession.

They’ve been replaced by smaller jobs, meaning less new construction projects and more modernization ones in places such as Chicago. Quite simply, it means that clients have found it cheaper and minus the risk to simply fix up their existing buildings rather than build entirely new ones.

Absent, Cerny says, are the big highrise jobs that he used to drive by every day.

“From what I see right now,” he says, “it seems like most of the high-end work we saw four or five years ago is gone.”

Is This Heaven? No, This is Iowa

Public construction jobs such as schools and hospitals used to be the bread-and-butter for Aluminum Glass, but the recession changed all that, Notting says. It just wasn’t prudent business to tie up valuable time and resources when so many companies were struggling to keep their own lights on, let alone pay their bills on time.

o Notting plotted a new course and his company has continued to fare well following the decision to assume risk-adverse projects such as nearby strip malls. The company is also doing work in installing smaller glass shower enclosures to help make ends meet and is also carrying less inventory than in the past.

Notting remains confident things will continue picking up industry-wide.

“I think there’s a lot of optimism,” he says. “I hope to think we’ll continue at the rate we’re going.”

Twin City Magic
Glass and Mirror Inc., with offices in both Blaine and St. Paul, was hardly oblivious to the recession, but Sullivan figures her company was largely spared because of the kind of work in which it specialized.

Glass and Mirror Inc. had already made a name for itself in building remodeling circles within the Twin City area when the economy first began to sour. A non-union company whose projects were almost exclusively privately financed, Glass and Mirror Inc. saw no drop-off in work when so many other glass companies did.

Business has remained steady, even picking noticeable steam on the commercial side since 2010, Sullivan says.

“That’s our niche really,” she says. “We know what we do well and we kind of stuck to that. We’ve been able to grow because of that.”

 



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