Exclusive interview with Russell J. Ebeid
Q&A with the president of Glass Group, Guardian Industries Corp., Auburn Hills, Mich.
How are you keeping employees' spirits up amidst these tough economic conditions and the consequent plant closings and layoffs?
I tell them three things. First, we are financially in good shape. We have no debt. We are not concerned with taking business just to take business. Second, because we’re financially in good shape and other companies are not doing as well, we see that as an opportunity. This is a year of opportunity. We could make acquisitions—if they’re any good—at discount prices. Third, we’re continuing to maintain production. We’re not shutting down plants. What got us to this point is that we've proven we’re not flaming mavericks. We want to stick to our policies and not over-leverage. That’s what got other companies in trouble.
How is the industry going to change in the wake of the “Great Recession”?
In a couple years you won’t recognize it. You’ll see change in ownership, shut down of facilities and a loss of talent because of those closed facilities. [AGC Flat Glass, Alpharetta, Ga.,] for one, shut down three float lines. Where are they going to get people to start it up again? Who would want to join them, not knowing security? For those companies, they’re on the banana peel. … Meanwhile, we are getting customers that we couldn’t penetrate for 30 years. We’re not soliciting business. We’re checking credit. We’re getting opportunities by doing nothing. We don’t need business just to keep going—we don’t want bad business.
What is the progression of solar technology?
Solar is something that has already started. The business hype, however, is much more than reality in terms of sales and orders. A lot of people involved, all thinking they have the million-dollar idea. Some do, I’m sure. I don’t know who they are. That’s why we’re betting on all solar technologies. We don’t know which one—or which couple—will break through. Solar will be worldwide, and it is coming, but it will come slower than all the newspaper articles and governments indicate.
You have mentioned previously that you expect a global player to emerge from China in the near future. When and how will this happen?
The last I looked, there were 60 different owners of glass plants in China. I believe that number will float down to 10 within the next few years; by comparison, the United States has five or six owners. This will create a more organized market. We won’t have all these renegades. They will shut down or the government just won’t support them anymore. This will be the big bang to a more orderly market. Who that big strong player will be will take some years after that to emerge. Will it be [Taiwan Glass Industries Corp.]? They are headquartered in Taiwan, but of Chinese decent. They know the Western world, and I give them good odds to come out as the global player. Qinhuangdao Glass or the Pilkington joint venture, [Shanghai Yaohua Pilkington Glass Co.], are two other possibilities. I don’t know yet.
How is Guardian extending its reach globally?
Seventy-two percent of sales are outside of the United States. The last plants we opened were in the United Arab Emirates, Russia, and before that, Brazil. Poland and Hungary. More of our opportunity, if you’re talking float lines, is outside the United States in the developing world. More of the technological opportunity is in Western Europe and the United States. We don’t want to just make a commodity product. Different regions of the world are marching ahead with different strategies. It’s not a one size fits all. In Russia, we’re producing raw glass, laminated and coated glass. In Brazil, it’s laminated, float and coated. In the UAE, it’s coated glass.
What does glass industry need to do to ensure it continues to be a product of choice in an increasingly green market?
From an industry point of view, we need to be looking at government regulations. A customer is not going to pay $5 for $2 window unless they’re mandated to do so through energy codes. If you’re waiting for people to pay extra money to go green, forget it. It’s government regulation that promotes innovation. With solar, it wouldn’t pay to do it without the government subsidies and tax credits. We’re still probably five to seven years away from it being cost-effective, at least at peak power, with no government incentives.