The Friday Stunner
Major news on float glass costs
Wow. Well on a day that it was announced U.S. Inflation was at its highest rate in 40 years, another bombshell was dropped. The news, in case you missed it, was a 40 percent price increase on glass from Guardian Glass, and that is not a typo. Forty percent.
While many other industries are used to big numbers like this, our industry is not, so just the number alone had people thrown. Obviously, there’s the initial emotional response in that this is a very tough pill to swallow in a domestic glass availability market that grows tighter by the day. Not to mention everything else going on in everyone’s operations. Then there’s the reality of what happens next and how do you deal with it all.
The week ahead is where all of this will come to play. What is my take on all of this? I think the timing was odd, and the number way too high. I could justify past price increases and quite frankly with inflation could say one fits here, but 40 percent? No way. Maybe there’s a plant issue, but if that was the case, the letter would've/should've spelled that out. Without something like that, this number is just hard to fathom.
Now, obviously, there’s been a feeling for years that our products needed corrections on the pricing side, but to attempt to get them in this manner, at this time, just doesn’t sit well with me. Aside from the obvious tumult this will cause, it also has the potential to damage the supply chain with GC’s and developers pushing to go in alternate directions for material, and quite frankly, some of those directions won’t be good for our industry or reputation (meaning product quality will not be as good).
But that’s me; there are probably people who have no issues with timing or total at all, though, so far I have yet to talk to one. I assume as this blog gets posted, I’ll hear more on it.
As for the next steps...The OEM side of the business has a different runway to be able to implement this (still challenging) and they’ll be quicker to work through it. But interestingly enough, the OEM side has slowed which makes the timing of this quirky. On the other side, I feel for the project folks; both fabricators and glaziers with committed jobs will have serious issues here. This increase goes into effect next week, which will surely be an issue. Even those fabricators and glaziers who may have intelligently built in escalators to protect against volatility, still won’t be covered after a number like this one.
Companies that are well run will work through this, but even the best of the best will have to still reset their plans and raise their game even more. For the less sophisticated companies, or those that have not taken previous increases seriously, some bumpy adventures lie ahead.
The bottom line is, once the emotion wipes away (which is going to take a bit), the industry will deal with it. Companies have to examine what they have going, and do what they have to do to survive. I fear for the quality that now may come into our space, and the ramifications of that. (Not every potential new supplier to the industry is poor, but the bad actors will make their way in). Whether or not this move, in the long run, was a good one for Guardian will be seen—I am sure the market will ultimately decide. The bottom line is we are living in some turmoil-ridden times right now and there are going to be some very tough conversations this week up and down the chain.
Moody’s Analytics Reports Recession is not Inevitable
After that news above, it was hard to focus on other items- but that is what you want from me right? So this link was possibly good news on the talk of a recession in the United States. Moody’s Analytics is telling people like me to slow our roll with the predictions there. Check out what they have to say, and I’d love to be wrong here but I just can’t see how we avoid it.
From the Fabricator Pod
More good? The folks from my podcast last week. In case you missed it, you can catch up with the amazing Aragon brothers from Aragon Construction and the incredible Kelly Whittingham of Halio Inc. We covered a ton of ground from growing pains to best-in-class technology and more. Thank you for listening/watching.
Exhibitors Join GlassBuild America
Good news on the GlassBuild front. The show hits in October and in the last month 25 new exhibitors signed up. That is a positive sign of people wanting to get out there and show off their goods and services. I think as we all know despite the miserable items I have talked about above and previously; we are all busy and more importantly the need to get better at what we do, and how we do it is paramount.
Modular Building Not Growing So Fast?
Interesting blog post on the growth of modular building. I have been seeing more and more of the “it’s taking off and going crazy” posts versus this one that pumps the brakes a little. Good read and thanks to the great Melanie Dettmer of NGA for the find!
The Many Benefits of Glass
Last this week… Another good read comes from Intelligent Glass Solutions magazine. This piece covers the incredible benefits of glass and there are just multiple talking points here we should all commit to memory. The article was attributed to the NSG Group, so my assumption is either one of the tremendous duo of Dr. Kayla Natividad and Kyle Sword wrote it. Or maybe they collaborated but it is fabulous!