Volume 50, Issue 4 - April 2015

NewsAnalysis:TRENDS

Foreign Affairs: The U.S. Glazing Industry Becomes Increasingly Global

Contract glaziers are not without their challenges: finding and keeping skilled labor, escalating material costs, increasing lead times, just to name a few. Given these ongoing concerns, contract glaziers have enough to worry about. They may, however, soon face another issue—if they aren’t already—the increasing presence of non-U.S. glazing firms owned by competitors outside the country.

Who’s Affected?


Jon Kimberlain, application specialist with Dow Corning of Midland, Mich., says he’s seen the number of projects expected to be glazed outside the U.S.  increase over the past six months. These projects, he says, tend to be heavily design-driven, with specialty glass types or façade appearances. 

“The projects tend to be associated with highly visible companies that are building unique structures,” he says. “They tend to be smaller-type projects with respect to square feet; not high rise or tall buildings.”

According to Thomas Moore, director of technical services with Glass Expert Services, a consulting firm in Cottonwood, Ariz., medium- to major-sized glazing projects in the U.S. are being scrutinized for their potential profitability by many global firms, “especially when they have the luxury of lower or far lower costs in their teams of engineering, designs and management and their inherent far lower costs of doing business in and from their home country.”

He explains that when bids on medium and major projects are often decided to the tune of one to three percent, a firm that offers a done-deal bid three to ten percent lower than what contract glaziers can do here means “that owner/general contractor (GC) is going to jump for it.”

“Having said that,” he adds, “the foreign companies must be prepared for the realities of glazing methods and means common to America that would be utterly alien to them in the home country. So yes, [American companies] can and are losing jobs to foreign firms, but that does not mean that an owner or GC would ever use those [companies] again. More than a few GCs have learned the hard way [when] they awarded their beautiful glass job to the wrong folks.”


For some U.S. contract glaziers, the increasing presence of international competition has become a concern.


Reasons for Concern


Ed Zaucha, president of APG International in Glassboro, N.J., says they haven’t encountered any recent non-U.S. competition from companies not already established here. What they have seen, he says, is more curtainwall companies getting into the U.S. market.

“The U.S. economy is doing better compared to Europe and other countries, so a lot of companies based in foreign countries are looking to pick up work here,” he says. “There are a number of significant buildings in the U.S. that are being fabricated with products from other countries …”

One concern, Zaucha notes, is the significant manpower shortage in the glazing industry expected over the next decade. “So that makes entry [into the U.S.] a bit easier when there’s a shortage of manpower.”
Speaking of non-U.S. companies in either the glass or exterior enclosure trade, Keith Boswell, a partner in the San Francisco offices of architectural firm Skidmore, Owings and Merrill, says his company has seen a little of this “but not to a large extent in our work on the West Coast.

“What we have noticed is the domestic companies have increased their visibility. The U.S. glass folks are very responsive, and the U.S. curtainwall/enclosure companies are displaying a high level of service to us as architects and to the builders on the projects in which we are involved.”

As an example, he cites a project that uses glass and curtainwall fabricated overseas.

“Installation is by the company that is not domestic; however, the overseas company came in and hired local folks under their company name. So by strict definition it is the overseas company but with U.S. locals doing the work.”
There are unique challenges with non-U.S.- based firms taking on jobs in the States. Code considerations could be one area of concern.

Kimberlain says the codes for structural performance are generally similar between regions at a high level, but there are differences. “This can lead to confusion for providing appropriate submittals and project reviews, which is simply the difference between ASTM and ETAG (European Technical Approval Guidelines),” he says. “This creates some confusion in the warranty process as the EU approaches liability differently than the Americas. I think it boils down to developing relationships needed to progress through the normal challenges of a construction process. Sometimes that is difficult, unless you are pulled into the project early in the design phase.”
When Contract Glaziers Face International Competition, Keep in Mind…
01 The best bid is not always the lowest bid.
02 Import levy taxes to level the playing field have helped, but much of the market is still driven by the lowest bid.
If a particular glass firm offers a bid 3% to 10% lower
than anyone else, then that’s usually who gets the job.
03 International competitors may not always be knowledgeable of North American hiring practices, Equal
Opportunity Laws and even Union Labor Contracts.
04 Educating customers about quality is critical.
05 Embrace an ever-increasing international economy. As Thomas Moore says, “Think global and act local.”

Beyond the Low Bid

The challenge Moore sees goes back to finding the best bid, not necessarily the low bid. The key, he suggests, is convincing the GC that low cost has nothing to do with doing the job right.

“Many GCs are so focused on the low bid that they have to submit to get the job. They themselves utterly demand the low bid, not the right bid,” says Moore. “Bidding up against a few folks from the [Asia Pacific region], I have found that they completely overlook or have no knowledge of hiring practices, equal opportunity laws and something as basic as actually reading the union labor contract. In other words, I politely ask the GC, ‘do these folks I am bidding against have any idea what they are getting into or are they going to try and bring their home rules here to America?’ I have personally witnessed utter disaster when trying to import home-country values and morals and rules to another country.”

As the U.S. glazing industry becomes increasingly global, companies here will need to adapt.

“Most anyone can be anywhere on this planet in less or far less than 24 hours’ travel, and don’t think folks in other countries won’t come here and bid and be awarded jobs,” says Moore. “They already are and have been for years; and they are getting better at it.”

He continues, “The days of 100-percent ‘Made in America’ for the glass trade are over. Those who bid jobs like it’s 1971 are fading out fast. ‘Think global and act local’ is my phrase.” 

—Ellen Rogers



USG
Copyright 2015 Key Communications Inc. All rights reserved.
No reproduction of any type without expressed written permission.