Volume 44, Issue 4 - April 2009

Company News

TRACO, YKK AP Feel Effects of Slow Construction in Georgia

The state of Georgia’s unemployment rate is the highest it’s ever been since the U.S. Department of Labor’s Bureau of Labor Statistics began standardizing unemployment rates among all states in 1976. And now, a recently announced plant shut-down and employee layoffs at two different aluminum window companies in Georgia soon will leave even more of the state’s workers searching for jobs.

TRACO in Bainbridge will shut down its plant there indefinitely and YKK AP in Dublin has implemented a staff reduction. For both companies, these actions are a result of the slow construction market.

For TRACO, the plant’s 70 employees were given a 60-day warning notice on March 9 that the plant would be closing. The shutdown is said to be indefinite and some employees will be kept on staff for facility maintenance. According to news reports, TRACO officials say if the economy turns around they’ll re-evaluate the closing.

At press time officials from TRACO had not responded to USGlass’ requests for comment.

In Dublin, YKK AP reduced its staff by fewer than 20 full-time employees. The Dublin location has about 440 employees and is one of the county’s largest employers, and for Oliver Stepe, senior vice president, YKK AP America, just because business is slow, doesn’t mean this is still not a good time to be productive.

“We are very well positioned to remain strong during this current economic crisis. Our recent operational adjustments are not a sign that we are shrinking back, but rather a sign that in combination with continuous and expanded product development efforts, we will be the most proactive manufacturer to enhance our value to the market and, most importantly, increase our customers’ ability to gain new business opportunities as well,” Stepe says. “Our efforts in the past two years in product development, expansion and a new supply chain management system are now really paying off. For example, the past few months we have seen our on-time delivery index at its highest point in our history. We also just launched a brand new, innovative transportation system in a test region that we hope to expand throughout the year.”

Likewise, Stepe says during these tough economic times while it’s important for companies to remain competitive, they should not necessarily focus too much on price as a business strategy.

“Now is not the time to slash prices and fall victim to those who may try to take advantage of the current economic crisis. If companies are faced with lower volumes at lower prices, it will be very difficult to manage their business,” Stepe says. “Companies must focus on their core values and be clear about the value they bring to the market. Obtaining appropriate and fair pricing for goods and services is critical to any economic recovery.”

Stepe also adds that economic downturns have somewhat of a filtration affect on the market, which is not all bad. “The strongest and most savvy business owners and companies will come out of this period stronger than they went in, and new entrepreneurs will be born and create products and markets that are not yet visible to the average person,” he says. “In my opinion, this cycle and the spirit of innovation that is inherent to those who call America home is what makes the USA’s economic system among the strongest and most admired in the world.”


Glasswerks Opens New Facility 

Glasswerks LA Inc. has recently completed its new corporate facility. The new 180,000-square-foot plant in South Gate, Calif., features a great deal of new glass fabrication equipment. Four tempering furnaces give the company large capacity in Southern California. The facility also features a new environmentally-controlled laminating line, a Lisec insulating line, three automated cutting lines, as well as a number of CNC edgers and polishers.


PPG Restructuring Plan to Save $140 Million Annually

Pittsburgh-based PPG Industries has announced a business restructuring plan focused on further reducing its global cost structure. The company cited global economic conditions, low end-market demand and acceleration of cost-savings from the integration of the SigmaKalon coating businesses acquired in 2008 as reasons for the program. The planned actions are expected to deliver pretax cost savings of approximately $60 million in 2009, growing to an annual run rate of about $140 million.

Implementation of the plan is expected to cost the company approximately $160 million in cash. A pretax charge of approximately $190 million will be recorded in the company’s first quarter 2009 financial results. A further charge of up to $50 million is possible later this year as the evaluation and approval of other elements of this restructuring plan, including additional plant closures, are finalized. 

The first quarter charge includes the cost of closure several small production, laboratory, warehouse and distribution facilities across PPG’s businesses and regions and a broad reduction in employment across the company globally. In total, approximately 2,500 jobs will be eliminated.

“These are sweeping steps that will impact all of PPG’s business segments and regions,” says Charles E. Bunch, chairperson and chief executive officer. “We are making significant structural changes to the way we operate our businesses. By implementing this program, we not only will be better able to weather today’s difficult conditions, we also will be a more efficient company coming out of the current economic downturn.” 

The largest portion of the cost-reduction activity will take place in the company’s automotive OEM coatings and industrial coatings business units, which have been particularly hard hit by declines in global end-use market demand.

Bunch adds that the company continues to see significant weakness in its global industrial end-use markets, with even sharper deterioration in Europe. These conditions are impacting results negatively in the company’s industrial coatings and glass segments, several business units in the performance coatings segment and the company’s silicas business unit. He says that the company’s architectural coatings EMEA segment is performing at a level near last year’s first quarter.

In addition, PPG stated that it has implemented a wide range of cost-reducing and cash-conserving measures, including employee furloughs, salary and bonus actions and elimination of the company match of employee contributions to 401(k) plans. Capital spending, excluding acquisitions, is being reduced by about 50 percent from the $383 million spent in 2008. 

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