W&D Weekly - October 31, 2007 | Vol 2, Num 43
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MI Shutters Georgia Facility
This week, MI Windows & Doors announced it will close its Millen, Ga., manufacturing plant...
The new home construction downturn has claimed another victim at MI Windows & Doors, which announced this week that it will close its Millen, Ga., manufacturing plant.
“Our decision to close the Millen facility has been extremely difficult,” says Matt DeSoto, president of the Eastern division. “Anytime we affect team members and their families by eliminating jobs it comes with much concern and anxiety. The decision is not a reflection of how our team in Millen has performed, rather a necessary reaction to the current downturn in new home construction.”
The company reports it will redeploy its assets from the Millen site to other manufacturing facilities in the Eastern part of the country. Officials report that despite the closure, customers will receive “seamless service” during the transition.
MI Windows & Doors, a subsidiary of JT Walker Industries Inc., is a vertically integrated manufacturer with more than a dozen plants across the U.S. Based in Gratz, Penn., the company is a Window & Door Top 100 manufacturer, included in the 2007 rankings in the $500 million to $1 billion in annual sales category.
PGT Downsizes Overhead, Number of
Publicly held PGT Industries has engaged in a restructuring plan to increase efficiency...
In a move to increase efficiency, publicly held PGT Industries has engaged in a restructuring plan that calls for reducing overhead and shaving one manufacturing shift off the schedule. In total, the plan is expected to save the company about $16 million.
The Venice, Fla.-based manufacturer will reduce its “indirect workforce” by about 17 percent, resulting in an overall decrease of its roster by 8 percent. The company says the streamlining of overhead came as a result of in-depth analysis of target markets, internal structure, projected run rate and overall efficiency. “This restructuring is especially difficult because it affects so many of our loyal, talented and hard-working employees,” says Rod Hershberger, PGT’s president and CEO. “However, faced with unprecedented declines in the housing market, and as difficult as it is, this restructuring is essential to streamline the company and eliminate organizational redundancies as well as improve processes to drive new product development and sales.”
PGT will also decrease its production schedule from three manufacturing shifts to two.
Company officials will release more financial implications of the restructuring plan in its upcoming earnings release, scheduled for release today.
With production facilities in Venice, Fla., and Salisbury, N.C., PGT sells its aluminum and vinyl products, including hurricane-rated impact line, through a network of 1,300 independent dealers.
Barber & Ross Looks for Bankruptcy Options
Barber & Ross Co. wants to shift from Chapter 7 to Chapter 11, allowing the owner to reorganize the company...
Barber & Ross Co. has filed a petition to shift the involuntary Chapter 7 bankruptcy petition it’s facing over to the realm of a Chapter 11 bankruptcy proceeding, allowing the owner to reorganize the company. The window, door and millwork producer is facing many creditors, including banks, suppliers, tax agencies and employees, according to the local newspaper, The Winchester Star.
Chapter 11 status would allow owner David Joffe to file his own plan for reorganizing the business, rather than putting it in the hands of a third-party trustee under Chapter 7.
Barber & Ross abruptly closed the doors to its Winchester, Va., plant in June, leaving 400 stunned employees out of work. Under the federal Work Adjustment and Retraining Notification or WARN Act, the jobless employees are organizing a class action lawsuit seeking from the company 60 days of back pay and owed vacation, bonuses, health insurance and retirement contributions, the local paper also reports.
The June closure came at the hands of Wachovia, the window and door manufacturer’s biggest creditor, freezing its accounts receivable. The bank says Barber & Ross owes it about $24 million. Suppliers in the mid-Atlantic region teamed up to file the involuntary bankruptcy petition, owed $1.1 million collectively. Additionally, the company owes the local government more than $80,000 in back taxes.
Joffe’s lawyer told the Winchester Star that the owner is attempting to secure financing to re-open the company. “After careful consideration, Barber & Ross has determined that the maximum return to its creditors and shareholders can be best achieved through a voluntary Chapter 11 proceeding,” states Stephan Milow, Joffe’s attorney, in a motion.
The company’s former headquarters in Winchester has been listed for sale, the paper reports. Joffe is asking $13 million for the property, which is currently assessed at $9 million.
Economists Suggest Housing Outlook
We are “almost certainly looking at another down year,” David Seiders, chief economist of the National Association of Home Builders, announced at the 75th National Construction Forecast...
Washington, D.C.—We are “almost certainly looking at another down year,” David Seiders, chief economist of the National Association of Home Builders, announced at the 75th National Construction Forecast. Citing mortgage and credit problems; home sales, housing starts and permits all being down; and weak demand coupled with heavy inventory, he noted, “The question is will we be seeing the bottom in 2008?”
NAHB's chief economist David Seiders expressed low expectations for the 2008 housing market.
Most panelists foresee the end of the down market coming before the end of 2008, but many admitted their surprise with how things played out over the past six months.
“I’ve been surprised by the downturn, not that there was a downturn, but this is well beyond anything I expected,” said Mark Zandi, chief economist of Moody’s Economy.com Inc. His forecast predicts the next couple of months seeing the bottom in regards to sales, with the middle of next year seeing housing starts bottom out. “Prices will decline throughout 2008, bottoming at the end of the year, possibly the first quarter of `09,” he noted.
Offering a regional outlook, Bernie Markstein, NAHB’s director of forecasting and staff vice president, attempted to bring some optimism to the conference. “We can’t deny the negative, but at the same time let’s keep this in perspective—there is some positive in here.” While there are problems, he continued, to some extent they’re localized in the places we should expect. Pointing at California, Southern Florida, Washington, D.C. and other areas where the markets are performing the worst, Markstein said these were areas with extreme activity during “the boom,” adding that they will return to normal market levels, as they should.
When asked about the possibility of recession, a panel of economists predicted a 30 to 40 percent chance, explaining that recessions have happened in the past under these circumstances, but unusual attributes, like “normal” levels of consumer spending, provide reassurance that a recession won’t happen.
“I know the market is weak, but I think most of the discussion in the media and by analysts is exaggerated and sensationalized,” noted Michael Moran, chief economist of Daiwa Securities America Inc. “The outlook is not good, but it’s not desperate either. Most of the exaggeration begins with the subprime market.” He went on to explain that subprime mortgages make up only 13.5 percent of all mortgages, and 75 percent of mortgages are the typical, prime market mortgages. He also cited that while debt is up, net worth is up as well, reinforcing the idea that a recession is not likely.
NAHB’s next construction forecast conference is scheduled for April 28, 2008. Details are available at www.nahb.org.
—Pete Frank, managing editor of Window & Door magazine
Fenestration China Opens Next Week with First U.S. Pavilion
This year's Fenestration China will feature for the first time a U.S. pavilion, led by the U.S. Dept. of Energy and the NFRC...
About 30,000 industry professionals will gather in Shanghai beginning November 14 for the fifth edition of Fenestration China, now said to be the largest window, door, skylight and curtainwall trade show in Asia. For the first time, this year’s event will feature a U.S. pavilion led by the U.S. Department of Energy and the National Fenestration Rating Council.
U.S.-based window industry exhibitors scheduled to participate include Allmetal Inc., Edgetech I.G. Inc., Schnee-Morehead and Solutia. Johnson Window Films and Madico, two suppliers of window film, will also be on hand.
The U.S. DOE and NFRC will present a forum on advanced design and research concepts for China’s domestic door and window manufacturers and designers during the Fenestration Days China conference, which will be held in conjunction with the show. The program is designed to strengthen communication between Chinese and U.S. manufacturers and provide better understanding in the arena of “energy saving, environmental protecting” products.
International participation has steadily grown over the past four editions of Fenestration China. This year’s list of global window and door industry suppliers includes Amesbury, Azon, Elumatec, Rehau, Sika, Veka, Urban, Michael Weinig and Winkhaus. Helping to encourage more international participation is a new strategic cooperative alliance established between fensterbau/frontale and Fenestration China to jointly promote exhibitions, conferences and activities sponsored by both parties worldwide. Under the plan, organizers of the two shows will work to bring a large group of exhibitors coming from both Germany and China to participate in each trade fair.
Running from November 14-17 at the Shanghai Everbright Convention & Exhibition Center, Fenestration China 2007 is sponsored by the China Construction Metal Structure Association and EuroWindoor, the consortium of European window and door associations. The event is organized by CIEC Exhibition Co. Ltd., and co-organized by Nürnberg Global Fairs GmbH, which also organizes fensterbau.
More information about the event is available at www.windoor-expo.com.
Marvin Sees More Fiberglass Gains
Last week, WDWeekly reported on a presentation made by Susan Marvin, president of Marvin Windows & Doors at the Midwest Glass Conference. She also sat down with WDweekly’s Katy Devlin, to answer a few questions...
Last week, WDWeekly reported on a presentation made by Susan Marvin, president of Marvin Windows & Doors at the Midwest Glass Conference. Marvin also sat down with WDweekly, to answer a few questions.
WDweekly: Marvin was a pioneer in developing a fiberglass product line. Why has Integrity Windows been successful, while other fiberglass window and door lines failed to catch on?
Susan Marvin: We did a terrific job running thin wall shapes with fiberglass. Prior to us working with shapes, the only fiberglass windows on the market were beefy. We were able to make the material attractive and have since become very proficient at it. The Integrity Window itself delivers that with tremendous value.
WDw: Where is fiberglass evolving to now? Do you expect fiberglass as a material to gain significantly more market share?
SM: I do see fiberglass continuing to expand its market share. It’s the building material of the future—it’s durable, it’s strong.
WDw: In what segments?
SM: Fiberglass is crossing over to the nonresidential market. Tecton [Marvin’s joint venture pultrusion operation] is supplying some fiberglass storefront products. At Marvin, we are moving up to serve the luxury buyers.
WDw: In recent years, more of your company’s dealers and distributors have been setting up showrooms and retail outlets carrying the Marvin name. How closely does Marvin work with its dealers?
SM: We are never any better than our dealers perform. We will fail, no matter what we do, if our dealers aren’t performing. We invest a lot in getting to know our dealers. Interfacing more frequently, treating it like a team. For example, my nephew Dan, who is in charge of the Infinity product line [the manufacturer’s fiberglass replacement line], I don’t think there’s a dealer he hasn’t met with.
WDw: Is branding becoming more important in the window and door field? Do you see branding playing a more important role in specific market segments?
SM: We invest heavily in branding. Certainly, we are in a segment where the consumer plays a role, so branding becomes even more important. In spec housing, the builder is our customer. In commercial, the brand is less important.
WDw: What other trends do you see in the industry?
SM: There are many companies making a mad dash for the bottom of the barrel. We’re going the opposite direction. My father vowed never to compete on price; instead, deliver great value. Customers put great value on quality, high performance and durability. That takes an investment on our end too, to make quality products.
Reporting by Katy Devlin
Sage Electrochromics: Clean Cash
At the Sage Electrochromics plant in Faribault, glass is everywhere. Sheets of it lie on conveyor belts waiting to be cleaned, inspected and coated. Samples of glass lie in FedEx boxes, awaiting the eager eyes of architects. And of course, glass covers the exterior of the building, so much so that, on a clear sunny day, outdoors seems to be indoors... read more
Lowe's Finally Gets Its Vermont Store
Lowe's Cos. Inc. plans to open a home improvement store in South Burlington in January—making Vermont the last state in the country to host the retailer after 61 years in business... read more
For Sale: 2 Million Empty Homes
Number of vacant homes on the market nationwide equivalent to all homes in Detroit; another sign of weak housing market
The number of vacant homes for sale rose in the third quarter, according to the latest government reading that casts new harsh light on the weakness of the housing market. The Census Bureau report puts the number of vacant homes for sale at 2.07 million in the period, up about 2 percent from the second quarter, and 7 percent above year ago levels... read more