Consolidation wins and worries

After last week's news that Sun Capital won the bidding war for Vitro America's fabrication assets, this week's big question is: How will this affect an already fractured and fragmented glass industry?

The answer may depend on where you are in the glass food chain.

The fabrication industry's dramatic consolidation played out over the last few months, in a time when float manufacturers were still looking to recover from the sharp contraction in flat glass production that began even prior to the country's economic collapse of 2008.

In the wake of this latest consolidation news, it seems that at both the float and fabrication levels there will be even less supply and capacity in the marketplace. Some glaziers worry that this will add to their product sourcing challenges as they continue to face pricing and bidding pressures from their customers. Tight credit, which has been a significant challenge for many, has the potential to be an even greater concern.

For glass companies struggling with a weak balance sheet, it may be even harder to survive. This morning's Wall Street Journal report of a drop in the Dow, the biggest one-month U.S. factory slowdown since 1984, and stagnant hiring in both the manufacturing and private sectors doesn't help the short-term outlook.

Watch Glass Magazine for interviews with all the principals involved in this deal; we can expect that the focus will be on people—employees and customers. One thing is true: companies that attract talented people, make and sell the best products, and offer innovative technologies flourish even in turbulent times.

As with all changes of this magnitude, time will tell who those are. 

Nicole Harris is publisher of Glass Magazine. Write her at nharris@glass.org.