Wednesday, December 30, 2009

Are We Going to Be Okay?

Early in the day on September 11, 2001, in the midst of all the chaos, I talked to a family member who happens to be a structural engineer. “Tell me those buildings aren’t going to come down,” I said in a voice that was more filled with question than command. But a declaration was what I got in reply. “I can’t tell you that,” was the quiet answer I received about 10 minutes before the first one fell. I went looking for reassurance and found that, sometimes, the truth doesn’t give you any.

Although this is in no way a proper analogy, nor is it an attempt to trivialize the events of September 11 in any way, I did feel the need to go looking for answers after Arch Aluminum filed for bankruptcy late last month. Up to that point, even amid the rumors that had been swirling about for months, I’d felt that our industry was in the midst of some very, very tough times but that we would emerge from them okay. The Arch reorganization—that of a long-time, large, primary source fabricator—was a tsunamic event felt around our industry. It was unsettling. If Arch could file for bankruptcy, the thought process went, then was anyone safe? Would our industry come crashing down around us?

“Are we going to be okay?’ was the question I asked to a few very learned, most highly-respected leaders—the structural engineers, if you will—in our industry. I went again seeking reassurance, but this time I got it.

The new year is often a toast to hindsight mixed with expectation, followed by a chaser of predictions. So here are my predictions, based both on my observations and (hopefully) educated guesses, along with the opinions of those I value. Watch for:

1. Consolidation at the primary manufacturer level. I would not be surprised if we have one less primary manufacturer in existence by the middle of next year than we do as I write this. This consolidation will be the result of merger;

2. Increased influence among manufacturers. Along with such a consolidation will come an increased influence by certain primary manufacturers and fabricators over what companies make it in the business and which ones do not. Since the number of companies at these two levels are relatively small, they will have more control over which companies in financial difficulty are allowed to exist and which are not;

3. Operators under the “commodity” model will dwindle. The days of being able to sell volume are gone, at any level. Primary manufacturers and fabricators must differentiate themselves through value-added and specialized product in order to survive long-term;

4. Capacity will decrease. In addition to the effect of consolidation, lines are down due to refurbishment and low demand. The eventual effect will be reduced capacity and, as a result, increased prices. Some leading experts also said a glass shortage would not be out of the question. That sounds counterintuitive on the surface, but when you analyze it, it’s not;

5. A healthier industry in the long run. Survival of the fittest is cruel in nature or in business, but it leads to stronger, more vital players.

This has been a tough year for our industry. I am glad I got to spend it with you. I am very thankful for the people I get to work with—and work for. Even in tough times, the glass industry will survive. Are we going to be okay? Yes.

Happy New Year. It is an honor for us to work for you.

Tuesday, December 15, 2009

The Good 'Ole American Way

What do glass block and accidental deaths of children have to do with it each other? A lot it turns out.

I began this morning by picking up a few consumer news items that might have implications for the industries we cover. The first was about the President's schedule for today. As I write this, President Obama has just finishing speaking at a nearby Home Depot about buying energy efficient building products. It's a pool feed so we are covering it as part of the pool, but it's still been interesting to see the President focus on energy efficient products. He even made an attempt at a joke at their expense, opining as to how press secretary Robert Gibbs might be able to find at Home Depot to plug leaks (not too many people in the audience got it though) .... anyway, it should be an interesting story for the readers of our USGlass, and DWM-SHELTER magazines.

The second story was one that has gotten a lot of consumer press this morning. The Consumer Product Safety Commission (CPSC of safety glazing fame) has issued a massive recall of blinds --50 million in fact -- because they constitute serious strangulation hazard for children and babies. The report on NBC's TODAY show showed the very serious danger.

"I know the blind thing is peripheral to DWM readers ..." I started to say when I walked in the office. "Yeah, I saw it too and I'm on it," DWM publisher Tara Taffera shot right back. "It might help some dealers or installers identify problems and alert homeowners, so I think we should cover it," Tara added. In fact, she'd already written a story about it.

About an hour later I checked my inbox and sure enough, it didn't take long for one glass block company to make a marketing opportunity out of it. I usually don't comment on such pieces, but this one just left such a bad taste in my mouth that I had to share. Only in the good 'ole USA could someone hear a baby strangulation story and attempt to make a marketing opportunity. Here's the first paragraph:

Obscure Acrylic Block Windows Eliminate Need for
Corded Window Treatments

Massive Window Blind Recall Has No Effect on Hy-Lite/U S Block Windows
PENSACOLA, FLA. – Following the announcement of a massive industry recall of corded window treatments, the experts at Hy-Lite/U S Block Windows are offering a no-cord alternative to potentially hazardous blinds.
“Homeowners add blinds and corded window treatments to their windows to obtain privacy and style,” says Roger Murphy, president of U S Block Windows. “Using acrylic block windows and interior shutters is the obvious choice for obtaining those same privacy results in the home, but with no risk to children of potential strangulation.
“The obscure nature of durable acrylic block windows --- both in fixed and operable styles --- means that homeowners can gain privacy without the use of corded window treatments or blinds. And, for those homes that already have clear glass windows, interior acrylic block shutters can be added to a window in just 20 minutes. Both products provide style to the home as well as a safe, secure product around children
.”


Well the folks at Hylite get my dubious acheivement award for the week. Geez.