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.