Carlex + Carlite = Confidence
Company Officials Discuss Recent
Purchase of Carlite Business
by Penny Stacey
Confidence isn’t a word you hear mentioned too often in the auto glass
industry. In fact, the unfortunate “C” words we all hear much more often
are cost, crunching (of prices), control and a host of others. Recently
AGRR™ magazine had the opportunity to interview Central Glass president
Shu Sarasawa (SS), along with Jim
Shepherd (JS), executive vice president
of Central Glass subsidiary Carlex Glass America, about the company’s
future. Carlex recently purchased the Carlite aftermarket business from
Zeledyne. Carlex also acquired the former Zeledyne auto glass plant in
Nashville, Tenn., and distribution operations in Lebanon, Tenn., as part
of the deal.
Both Sarasawa and Shepherd displayed confidence and optimism in the interview,
as they look to the future of the company and Carlite brand, and discussed
a recent $100 million investment at the plant, which includes the installation
of two new windshield fabrication lines and upgrades to the plant’s float
line. Sarasawa also provided exclusive insight into how the acquisition
came about and the matchmaker-type role that Ford played in the acquisition.
AGRR: I understand that Central Glass originally developed Carlex
as a joint venture with Ford, so purchase of the Zeledyne plant (a former
Ford plant) along with the Carlite brand, seems a natural fit. Had you
ever considered a purchase of the plant or the Carlite business in the
SS: We had somebody contact us from
Ford Motor Co. after Visteon. We kept some relationships [over the years],
but during the Zeledyne period of ownership we had not had so much contact
[with the plant]. Suddenly Ford asked us to negotiate and we came here
(see box at right for more about the history of the plant and Carlite
JS: [turns to SS] With regard
to the history, you were with the very early parts of Carlex …
SS: I was originally plant
manager [at the Carlex Vonore, Tenn., plant]. I started in 1990. It was
presented to my boss in Japan and I was assigned [to the role] … and so
we started that plant 20 years ago. Central took over the technology and
design of the plant, and the Ford side [handled] management and sales.
So the Carlex Vonore plant has Central Glass technology and the old system
But at one time Ford requested Carlex bring in the UAW, so we welcomed
the UAW and that was the start of the business [with them]. At that time
the UAW was not so friendly, but we started to work with them. Sometimes
[they] were difficult, [and] sometimes they were very understanding. So
that’s the reason why even if this is a UAW plant I’m comfortable running
it, because they did change, and we understand how to [work with them].
They are smarter than they used to be.
AGRR: What made this an attractive purchase for the company?
SS: The [plant’s main] customer is Ford Motor Co., one of the
biggest motor companies. The customer requested us to [look at the purchase],
which means we knew we would not be starting out by ourselves. Somebody
called me and said, “Maybe you can start to discuss this.” This person
used to be a Ford employee and he knows me, [and] somebody at Ford Motor
Co. had asked him to contact me, so I sent some investigators from Japan,
and [there were] many discussions. The point is, our customer, Ford, requested
us to investigate, and [we thought] “maybe we’ll have a discussion about
Ford buying glass from us.” This [purchase] is very attractive, and also
this plant has the float glass capacity. Float glass sometimes is difficult.
Float glass prices are high, and sometimes it’s over capacity. Some people
sell cheap, so it’s up and down, but if we have float we can control the
production costs ourselves.
JS: Zeledyne obviously was
the owner, and Ford was the major customer, and I think with the downturn
in the economy Zeledyne was struggling, and Ford was looking to protect
its supply base primarily. Ford really played a matchmaker role in the
transaction. And as we looked at it, as Shu said, clearly the float glass—the
raw glass supply, [attracted us]. The location’s phenomenal. There are
nine assembly plants within the region, so there’s a tremendous customer
base here—not just Ford, but many OEMs. [The plant] has a strong aftermarket
business that allows us to participate in that market to a greater extent,
so a trained workforce and the existing location [also attracted us].
It needs some work—we understand that. We know how to do that, so we’ll
take care of that, and I think it’s got great potential for us to grow
in the future.
AGRR: Was there any consideration of purchasing the Tulsa [Zeledyne] plant?
(Editor’s Note: Shortly before this interview occurred in early June,
Zeledyne had announced that it was searching for a buyer for its Tulsa,
Okla., auto glass plant, and that the plant would close sometime in the
summer if a buyer was not found. At press time, no official decision had
SS: That’s a different story.
We have not reached an agreement yet.
AGRR: What synergies exist between the two companies—Carlex and
JS: Well, the technology to
begin with. We have a strong technology base in Japan, and we have a similarly
strong technology base in Vonore, and we’ll be able to bring that here.
For example, one of the new windshield furnaces we’re putting in here
is currently in operation in Japan, so we’ll be able to leverage the knowledge
that’s been gained in Japan, and significantly speed up the learning curve
here. We’ll have shared administrative opportunities, as we go forward,
but it’s more than the technology base. It’s a complementary customer
base, and the aftermarket, where we now can look at the production at
Vonore, and we have a distribution system, an aftermarket system, that
will facilitate us access into that market that didn’t exist before.
AGRR: Will the distribution methods change at all?
JS:The same channels will be
in place, and our intent is to grow that business. I think Carlite’s a
very well known brand, a very well respected brand. We certainly intend
to build upon that. At the same time we have a Carlex brand that we’ll
be building, and I think Carlite will be one of our products under the
Carlex umbrella. So I think we have the opportunity now with more capacity,
other customers and a distribution system in place, we have the opportunity
to better serve a broader base of customers than perhaps was the case
AGRR: What is the timeframe for the investments and upgrades being made
at the Nashville plant?
JS: It’s already begun. We’re
well on our way. That’s one of the reasons we were able to tour the float
plant (see related box at right).
SS: We spend the money first [chuckles].
JS: We were pretty confident,
so we didn’t hesitate.
AGRR: Are you seeing a rebound in the automotive market?
JS: It’s a little early. We’re
really in the beginning phases—first was demolition, second was site preparation.
We’re just getting to completion of that phase, and beginning the installation
phase for one of the new lines, so that won’t be up and running until
the fall sometime. It’s a little early to see the benefits of that.
AGRR: You seem optimistic, though.
AGRR: I know that part of what Zeledyne has struggled with is the down
automotive market. How do you think the changes Carlex is implementing
will impact that for the positive?
JS: Well, first of all, we’re
not in 2008. This is a different environment than we saw back then. Zeledyne
had difficult timing, because they came on board just as the economy really,
really hit the skids. We’re in probably a little big stronger demand base
than they had at the time, and I think through a combination of our customer
base out at Vonore, and our customer base here, we’ve got a more diverse
customer base, and I think that diversification is something that will
give us a little bit more resilience in light of probably a downturn in
the future at some point in time. But none of us knows for sure when that’s
going to happen.
AGRR: In general, we often hear from readers that they struggle with glass
quality in today’s market. Do you hear that as well, and what do you think
is needed in the industry to change that?
SS: Our strategy—Zeledyne’s strategy
and ours at Vonore—has been one of superior quality, so that’s been a
pretty high priority on our radar screen. In this business the Carlite
brand, I think, has a reputation of very high quality, and we certainly
intend to build upon that and take it to the next level. And on the OEM
side of the business, I think we all know the quality level of Ford vehicles
today is top of market. Glass is a pretty significant component, so we
have to be right there with them—and we are.
AGRR: Do you expect to import more glass—or less—with the purchase?
JS: I think our intent would
be to build upon what we have here and not import. We will certainly look
at all options, but the goal here is that we’re a glass manufacturer,
and we want to maximize our manufacturing performance.
AGRR: Is there anything else you would like to tell our readers about
this new venture?
SS: The new venture is a very, very
big opportunity, and here, there’s so much space also, and if we train
well, people will be more efficient. I think we can eliminate some production
costs, and be very competitive. I’m very confident. We’re [spending] more
money to train the people here, and maybe the government will help for
training, as training is key. If we properly train people, we can beat
JS: As our new vision statement
explains, we know we need to earn the privilege of being the supplier
of choice, the employer of choice, the customer of choice, and I think
in terms of customers, all we would ask is [for them] to give us that
opportunity to earn the privilege. We understand it’s something we need
to earn, and as we move forward on our investments and our training, we
will be in a position to pleasantly delight our customers—both our current
customers and our future customers.
Watch AGRR’s Monthly Newscast
The June edition of the glassBYTEs.com™
monthly newscast, sponsored by AGRR™ magazine, includes footage from
the grand opening ceremony of Carlex Glass America’s recently purchased
Nashville, Tenn., auto glass plant, along with a tour of the company’s
float glass line.
Scan the tag at left to view the newscast. Get the free tag reader at
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