Businesses across the U.S. struggle to keep afloat as the U.S. goes though a financial meltdown and spreads it globally. At the Glazing Executives Forum, Jeff Dietrich, senior analyst, Institute for Trend Research, Concord, N.H., presented less-than-sunny reports in his economic forecast presentation. Negative growth rates will continue through the fourth quarter and result in further contraction in 2009 before turning around in the middle of 2010, he said.
The markets did not react as hoped to the $700 billion bail-out and other rescue efforts put into place in the last few weeks; and the contagion began to spread in some markets across the globe. European governments put billions of dollars into their banking systems Oct. 13 and the U.S. Federal Reserve announced it would back up their effort by making U.S. currency available in unlimited amounts, according to The Washington Post, Oct. 13. The Bush administration pushed nine major banks to partly nationalize as an "essential short-term measure to ensure the viability of a battered financial system,” according an Oct. 14 Post report.
In spite of the huge economic turmoil, GlassBuild America came out a success. Glass Magazine staff talked to industry professionals at the show about their businesses and coping strategies. Below are excerpts.
How has the glass industry, and your company specifically, been affected by the recent financial crisis? What are your expectations for 2009?
Mike Hovan, president, Edgetech I.G., Cambridge, Ohio
“It’s a little different for us. We tend to be more diversified internationally. The international side of our business has been so strong that overall we’ll have a pretty nice growth year, which most people in our industry aren’t able to say right now: customers, suppliers and competitors even. That’s been a big advantage for us.
In North America, Larry’s [Johnson] team has done a nice job maintaining the volume that we had despite the fact that most of our existing customers coming into this year were off sales significantly. It’s only because we have picked up additional market share with new opportunities that we’ve been able to maintain North America at about an even pace with where we were last year. Then when you add the international growth we’ve had on top of that, it’s made for a good year. However, we were geared up for a little bit stronger year, so as a company we need to take a look at how we make sure that we’re staying lean and competitive in the marketplace in an environment where it’s fairly uncertain what’s happening in the next few months.”
Larry Johnson, executive vice president, Edgetech I.G.
We’ve been setting up a lot of small- to midsize customers, and actually large customers, throughout this year because they are being proactive about Energy Star, and they want to continue to keep their Energy Star label.
“We’re also looking at different programs and ways of supporting and helping customers get more business, which in turn will give us business: through our marketing programs, our SustainaView Window Technology program, educating people about what truly green means. We’ve worked with some customers who have equipment that has capacity on it, such as IG equipment, and helped them get into that market where they can make IGs for other people.”
Garret Henson, director of sales, Viracon, Owatonna, Minn.
“We’ve had some projects moved out, canceled. [However] it does open opportunities for us. We were running our facilities at a very high level, and some of this activity has allowed us to focus on the balance of our levels. So in Houston, [after Hurricane Ike,] we were there. We are a global company, but in the last two years, the North American market was so busy that we couldn’t serve that [global market]. Finally, we had started initiatives [internationally] that were impossible before.
“For 2009, I’d have to say there is some cautiousness. If we would have done this interview six months ago, I could have told you predictions for 2009. We still don’t know what’s going to happen. My eight ball is really cloudy. We have to stay with our strategies. Architectural activity is very important. We have a great product that is going to hit the market. We’re all cautiously optimistic. Our volumes that we quote have not really stopped. … There is a tremendous amount of opportunity, but there seems to be hesitation from developers and owners.”
Mark Silverberg, president, Technoform North America, Twinsburg, Ohio
“In the industry at large, the commercial segment is seeing a slowdown in bids and estimation. The high performance segments are still seeing product development that we are benefiting from. We are still hiring in both divisions and growing at an excess of 30 percent. We’re also adding sales and marketing divisions and doing a lot more in product development. Demand for high performance thermal systems is only going to increase.
“Busy through the first half of 2009, but the second half of 2009 and 2010 is a big danger zone. The liquidity [problems] and financial issues in North America are more extreme than elsewhere. Europe’s growth is ahead of North America. In Asia, China, Korea, Japan, New Zealand and Australia, it has slowed down a little, but it’s not hitting them in the same way that it is here.”
Dan Mock, vice president of operations, Glass Doctor, Waco, Texas
“Up until August, we have not seen a decrease in business, in fact we’ve actually seen an increase. The September and October numbers aren’t final yet, so I can’t speak to those. I think everybody’s concerned. Fuel costs have certainly affected everyone’s bottom line. It’s a huge burden right now on all of our franchisees and we’re looking at some unique opportunities to help them get around. We, like everybody else, were kind of taken aback with the fuel crunch. I think it really impacted everybody tremendously. So, we’re looking at a lot of different avenues for our franchisees. Compressed natural gas [might] be one option; we’re definitely checking it out.
“In 2009, you are going to have to be a much better businessman than you were in 2008. It’s going to be critical that you focus in on your customers. You’ll need to diversify, and offer your customers more than just a windshield or window replacement. There is a lot of opportunity in our industry to branch out into other areas that really can help a small business get through a tough time. We’ve been through this before, and we’ll come back. I’m not concerned at all. It just really makes everybody be a better businessperson.”
Michael Clebnik, director of key account development, Security Lock Distributors, Westwood, Mass.
“We have seen a downturn in the pipeline of activity. We’re preparing for a bit of downturn as the credit crunch comes down the line, and as customers and customers’ customers don’t have the credit available to them. But we’re looking at this as an opportunity to expand. We just announced a major expansion of our product lines.
“We look at 2009 as a huge growth opportunity and are looking to gain market share.”
Fred Montgomery, vice president, Albat + Wirsam North America Inc., Kirkland, Wash.
“In our window and door division, we have definitely seen the downturn. On the commercial side, everyone is re-tooling. We are gaining business. They are going to benefit on the upswing; we are going to benefit now and during the upswing. We have the challenge of trying to find and train new, good people.”
Gary Dean, CEO, Bohle America Inc., Charlotte, N.C.
[If you look at the] global situation, most markets in Europe are holding up quite well. …To be honest, [we’re] still seeing some places that are not doing well, but we are a global business and pick up business where we can.
“The markets will come back. We’ve been here before. When you’re in it, it’s scary, but there are always opportunities.”
Jordan Richards, president, Glassopolis, Toronto
“We came down here expecting to hear real concern. We were very pleased … to hear very positive words. It’s going to be more competitive in this climate. High liability, high risk, more pressure and more competition are going to force glass contractors to be smart.”
Ray Asbery, CEO, Equalizer Industries, Round Rock, Texas
“If every bank in the world failed tomorrow, we’d have to start bartering or doing something. Are we going to let that happen? No, we’re not.
“By the time we get to next spring, we’ll see the auto glass side [of the industry] get stronger if the price of gas stabilizes and we get a new president in office, Democrat or Republican. We’ll see the economy go back up.”
Kerry Wanstrath, president, Glass Technology, Durango, Colo.
“What we’ve experienced is a 10 percent decline in total sales for the first time in 25 years. I think people are holding on to their cash, and unless they really need a service, they’re holding off on spending. It’s the financial markets that have put this fear and trepidation in people. They’re caught in the headlights.
“We’re already developing new products. You have to innovate in a time like this. We are also looking outside [the glass restoration business] for products that fit into our business model and asking ourselves ‘how do we diversify into other markets?’ Every dollar helps.”
Dan DeGorter, vice president, DeGorter Inc., Monroe, N.C.
“Our glass business has been pretty steady but not as good as last year. We’ve been affected by the exchange rate, the strength of the dollar. [In regards to our customers], as soon as they go to automation, making investments in machines versus labor, that will hopefully help them.”