Float Glass Faces Economic Strain: What We’re Watching
May 4, 2020
Along with the rest of the glass industry, float glass manufacturing has felt the effects of COVID-19, from supply chain issues to potential closures due to state stay-at-home and shelter-in-place orders. On March 19, Pennsylvania Gov. Tom Wolf ordered the closure of non-life-sustaining business, which would have included Vitro Architectural Glass’s float facility in Carlisle, Pennsylvania. The National Glass Association’s President, Nicole Harris, published a statement underlining the essential nature of float manufacturing. “Staying operational is especially critical for float glass production,” she says. “Closing these factories will result in a catastrophic operational break that will cause major and costly disruptions, not only for the individual plants, but for the entire industry.” The full statement can be viewed here.
As of now, most float manufacturing facilities appear to remain operational in the U.S., with a few exceptions. Most companies with float facilities based in the U.S. released statements at the start of the spread of the coronavirus and the implementation of stay-at-home policies with regards to worker safety and material supply. Companies reassured customers of a healthy stock of raw glass, described safety measures meant to protect workers, and promised communication about disruptions due to the pandemic.
Nevertheless, there has been fallout from COVID-19, largely due to the pandemic’s economic impacts. Here are the situations we’re watching:
Phoenicia to cease float glass operations
In a March 30 letter sent to customers and partners, the leadership of Phoenicia, the only float glass manufacturer based in Israel, announced their decision to “turn off the furnace ... and switch to a glass trading company.” Although COVID-19 was mentioned as an influence on the decision, the primary reasons were a lack of demand for float and laminated glass, and a drop in glass prices.
“Phoenicia is facing a predatory import of glass to the local market here in Israel, and high levels of supply of glass originating, among other places, in the many different factories in China that rely on government's funds,” say officials in the statement. The company says it will honor all open orders, and will be supplying True Color, its low iron glass, for the next six months.
Vitro Automotive closes Line 2 at Meadville, Pennsylvania, plant
Vitro Automotive announced in early April that it will cease flat glass production on Line 2 at its Meadville, Pennsylvania, plant. The facility supplies the automotive market, and leadership cites the softening of that market, exacerbated by the economic impacts of COVID-19, as the motivation behind the decision. Operations on Line 2 will continue until June 10, at which time the operation will be switched to a single continuous flow production line.
“We already faced a difficult combination of factors affecting Line 2’s future―including a growing oversupply of automotive glass in the marketplace―but the latest economic impacts from the coronavirus outbreak are just too much of a hurdle to invest $40 million in rebuilding it,” says Dave Shaffer, Meadville plant manager. “Line 2 will be stopped in an orderly manner, which will give us an opportunity to rebuild if there is a business case to justify the investment.”
As a result of the line closure, Vitro will also terminate 108 positions. Employees will receive health care benefits through the end of August.
NSG/Pilkington places some manufacturing facilities on hot hold
NSG Group released a statement on April 30 regarding impending financial results and the impacts of COVID-19 on the company. Leadership says that though demand for architectural glass began to decline in March, demand for solar glass still remains, and that architectural glass production is not affected by the drop in the automotive glass market. Read the full statement here.
Leadership also provided a status update by region, underlining decreased production for the Europe and the Americas regions. “Two float lines are on hot hold and several other lines are operating at reduced utilization. However, others are continuing normal operations, with solar glass lines fully loaded,” say officials. Glass Magazine has not yet received confirmation on which facilities are impacted. NSG Group operates three float glass manufacturing facilities in the U.S., which can be viewed on the World of Glass map.
Fuyao lays off employees at the beginning of stay-at-home orders
On March 24, the Dayton Daily News reported the Ohio Department of Job and Family services had made public WARN notices regarding layoffs by companies based in the state, including Fuyao Glass America. The WARN Act requires employers with 100 or more full-time employees to provide 60 calendar days notice of a worksite closing affecting 50 or more employees; in the case of unforeseen business circumstances, less notice may be given. Read the full story.
Ohio’s stay-at-home order, which went into effect on March 24, and was extended on April 2, included the closure of businesses deemed non-essential. The orders expired on May 1, and were replaced by Stay Safe Ohio orders, which allows manufacturing to reopen as of May 4, with required safety and social distancing guidelines.