How the Economy is Contributing
toSeismic Shifts in the Glass Industry
by Megan Headley
Even with modest improvements in the overall U.S. economy, nonresidential
construction spending is expected to decrease by more than 20 percent
in 2010. A marginal increase of 3.1 percent is expected in 2011.1 According
to a recent construction report, poor conditions remain because of an
oversupply of nonresidential facilities in most construction categories,
weak demand for space, continuing declines in commercial property values
and a strong reluctance by lenders to provide credit.2
“The steep decline in nonresidential property values has slowed investment
in new facilities,” says AIA chief economist Kermit Baker. “Conditions
at architecture firms continue to remain very soft, but we’re optimistic
that they will improve before the end of the year.”
So just how is the glass-architecture interface adjusting to the dearth
of new projects?
“Architects have suffered a great downturn in their ranks in the last
year and a half,” says Bill Bonner, architectural representative for the
glazing contractor Crawford Tracey Corp. in Deerfield Beach, Fla. “Some
of the larger firms have let a lot of their staff go … and the larger
companies … are now going to be competing against other firms started
by all the people who have been fired,” he adds.
Those remaining architectural firms, large and small, are seeing the pinch
on the companies with which they work.
As a result, seismic changes are occurring in the way glass is bought
and sold among contract glaziers. Seismic is a good word for such transformation.
As of now, they are small, below-the-surface modifications that could
eventually lead to large-scale, long-lasting shifts in the way in which
business is done.
Glazing contractors also find themselves bidding on fewer and tighter
projects and architects find themselves the object of more and more attention
from product manufacturers as well.
“The suppliers all are trying to get their portion of the market right
now and it’s really tough for them. A lot of the local [ones] are doing
their best to promote their product to everybody that they possibly can,”
says Lee Whiteside, sales estimator/design residential for Giroux Glass
in Los Angeles.
“I spend more time marketing when the economy is down and I think that’s
what’s happening out there,” adds Steve Downing, president of Window Consultants
Inc., a glazing contractor in Owens Mill, Md. “Manufacturers are making
sure their reps are out there. By the same token, high-quality glass and
window companies and installation companies are going and meeting with
The Shift: Price as the Only Factor
For years, price has consistently been among the top three factors in
a building owner’s purchase of glazing materials. Within the past two
years, it has become the number-one factor.3
“Price sensitivity is the highest I’ve ever seen it,” says Bob Ferguson,
a Mid-Atlantic contract glazier. “I understand it, but there is usually
a reason the low-bidder is the low bidder, and it’s usually not a good
Downing shares one example. “… Our price was $1.2 million for sales and
installation of a product. We were second on the job. The low bidder was
at $800,000. They gave them the job, and it is a nightmare. It’s been
written up in the paper—the job hasn’t even started and it was supposed
to be well under way by now. Any general contractor who looks at $800,000
versus $1.2 million and everybody else is above us—obviously something’s
“But [the general contractors] say, ‘wait a minute, if we didn’t use that
price someone was going to use it and they were going to get the job.’
So it really is a double-edged sword—if you don’t use the bad price you’re
not going to get the job but if you get the job you’re not going to want
it because you’re going to lose money anyway. It’s become pretty tough,”
“If the company that had bid $800,000 had been honest and forthright—saying
‘we didn’t include the blocking, we didn’t include the demo, we didn’t
include this kind of glass that was spec-ed’—this nightmare wouldn’t be
going on now … The building won’t be completed on time and the litigation
could take years.”
While a poor economy generally reduces the number of long-term companies
in existence, it also can flood the market with new work-for-wage competitors.
The Shift: Your [Former] Employee, Now Competitor
“I’ve seen some guys laid off who are in their mid-40s and have been in
the business for 20-some years,” Downing says. “There’s no place to go,
so they figure, ‘what the hell, I’ll try to do this on my own.’ The problem
is that they are not properly insured and they probably can’t get bonding,
but their prices are low. How can I compete against them? How can I compete
against them when they may not be paying their workman’s compensation,
may not be giving fringe benefits and health benefits?
“Some people out there out there have been low-balling and that is screwing
up the industry,” Downing continues. “I don’t necessarily blame them—you’ve
got to make a living, you’ve got to feed your family—but it is screwing
up the industry.”
The Shift: There at the Beginning
For years, larger glazing contractors have found a way around the bid
madness by taking a design-assist approach and becoming involved with
a project almost at conception.
“Nearly every one of our projects is a design-assist one,” says Paul Becks,
executive vice president of National Enclosure Co. (NEC) in Pontiac, Mich.
“We don’t really bid projects and we don’t pursue projects that are bidding;
we’re asked to get involved in a design-assist situation where we’re bringing
products to the table. The higher end of our market is going in this direction.”
Becks believes there are two main reasons for this change.
“The facades … are becoming far more sophisticated in both design and
technology. At the same time, the schedules are becoming shorter; people
are able to build buildings at a quicker pace because of technology. Lastly,
financial pressure has not abated. So you have a perfect storm. They [customers]
want a very sophisticated design that works perfectly, [and] they want
it quickly for a reasonable amount of money. The only way that can work
is through the design-assist process,” he says.
Downing says the “design-assist” approach has worked well for his company.
“We are a registered architectural firm,” he explains. “At one point,
we had an 85-percent close ratio because we would get involved from the
very beginning. We would lock in not just the performance specification,
but the manufacturer’s as well. We would then work out deals with the
manufacturers, so we [were] protected.”
Some contract glaziers, such as Trainor Glass Company, have taken such
efforts to a new level. The Chicago-based glazing company has begun opening
“design centers” that cater to architects and interior designers alike
in strategic locations throughout the United States (see related story
on page 66).
Downing mentions that such cradle-to-grave project involvement does seem
to occur more frequently among glazing contractors than in other trades.
And suppliers, too, now seem to be trying to secure their places early
in the design process.
Downing puts the responsibility for a successful project squarely on the
back of glazing subcontractors. “In order to be successful in doing [design-assist],
you’ve got to have integrity,” he says. “You build up a relationship with
the people who make the decisions, and that’s why they want to work with
you. But it all comes down to running a good, clean, honest business.
Because otherwise it’s going to catch up to you.”
The Shift: Downstream to the End User
The down economy also may be contributing to a transformation in the traditional
channels used to bring glass to market.
“The industry is shifting from the glassmaker to the glazier and to the
consumer,” Russell Ebeid, Guardian Glass Group president, recently told
USGlass.4 “At some point you’re going to read about ShowerGuard [Guardian’s
shower product] and think, ‘I could use that. Where do I get this?’ You’re
going to go to anybody that has it rather than being loyal to one fabricator.
“The consumer is going to pick which products he wants,” Ebeid predicts.
“The industry is shifting from producer to fabricator to glazier and architect
to consumer and the consumer will be the king.”
Not everyone agrees. “We may see a rise in consumer awareness surrounding
brands of primary glass,” says Ferguson, “but commercial building owners
will still look to the glazier as the authority. I often have to educate
my customer as to why he might not want to use the product that is spec-ed
and I am successful in doing so just about every time I try, which is
most of the time.”
Ferguson says, in the end, it’s about who signs the checks. “Architects
like the illusion of power,” he says, but asks rhetorically,
“What do they really buy? The general contractor pays my company. He represents
the owner. My company pays the glass manufacturer. Architects are consultants,
but they are not my customer.”
Some suppliers are going further, promising not just a product that will
last—but a one-stop-shop of services that may range from design to, in
some cases, installation.
The Shift: Glaziers as the Sole-Source Supplier
Having suppliers that market direct to the glazing contractors’ customers
aren’t the only channel changes coming. There are hints of seismic changes
to come as fabricators expand, acquire and reposition themselves to become
sole-source suppliers of the building façade.
General contractors and owners say sole-source suppliers simplify the
unwieldy chain of products, design and installation. This is especially
true now that building owners may be holding properties longer—and so
have responsibility for construction problems long into the building’s
Building Owners and Managers Association International (BOMA) president
Henry Chamberlain and chair Kurt Padavano point to a new trend toward
long-term lease extensions of five to ten years. “Larger tenants are renewing
longer,” says Chamberlain.5
Mike Kent, U.S. president of real estate management services for Colliers
International, has noted the importance of collaboration. “In today’s
market, collaboration between property and asset managers and also with
vendors and service providers is critical to compressing expenses and
creating value,” he says.6
Becks recalls two projects for the University of Michigan that speak to
the involvement of building owners today. Both featured complicated rainscreen
facades with unitized curtainwall. “Both [were] total enclosure design
projects … in theory, if anything goes wrong with either one of those
facades it’s very simple for them [the owners]; they simply pick up the
phone and call one person. It doesn’t matter whether it’s coming in at
the stone or the terra cotta or the glass,”Becks says. “It’s one call.”
Downing also sees increased interest from municipalities or universities
and other educational institutions. “They recognize the importance of
a single source,” he says. “When they come to the glazing contractor they
want ‘the whole package.’ You’re going to design it, you’re going to engineer
it, you’re going to field-measure it, you’re going to supply the product
that they want—and you’re going to be there the whole way.”
“An owner is going to look for somebody who’s got a track record of success.
They also look at the longevity of projects that they’ve worked on. I
would think that owners are more conscientious about that now,” he adds.
There’s a familiar Aesop fable about an old man who asks his squabbling
sons each to break a single twig, which they easily do—but when given
a bundle of such twigs they find that the bundle proves too difficult
to break. You might say that the challenging construction market has broken
a number of fabricators and installers alike, and now some of these companies
are partnering to strengthen their appeal to designers and general contractors.
These relationships among suppliers and installers are hardly new. Apogee
Enterprises is the parent company of glass fabricator Viracon, curtainwall
fabricators Wausau Windows & Wall and Tubelite, along with the contract
glazing company Harmon Inc. Oldcastle’s recent shift from Oldcastle Glass
to Oldcastle BuildingEnvelope™(7) officially solidified its range of acquisitions
under the new moniker.
“As we have evolved and transitioned from a glass fabricator to a supplier
of integrated building envelope solutions, people see us as a more desirable
supplier and partner,” Ted Hathaway, chief executive officer of Oldcastle,
told USGlass earlier this year8.“I think people are interested in partnering
with us and developing strategic alliances that are positive for both
Arch Aluminum, which used the slogan, “Always your supplier, never your
competitor,” for a time, is looking for expansion at certain industry
levels. “Asahi and Vitro are backwards-integrated,” said Arch CEO Jeff
Leone in a recent interview9.“The capital investment in order to do this
is huge—float plants are hundreds of millions of dollars ... I don’t think
Arch will backwards-integrate, but there are other ways to grow.”
Ferguson thinks Arch may have it right. “Most glazing contractors will
do anything they can to avoid buying from a competitor,” he says. “Companies
need to decide what they are. Are you my supplier, my partner or are you
a competitor? You can’t have it all different ways at the same time and
In July, NEC announced a strategic business alliance with MERO Structures
Inc., the new American division of Germany-based MERO-TSK. According to
Becks, the partnership was one step in an evolution toward becoming a
one-stop façade solution.
Becks explains, “We started looking at the type of work that we’re really
good at and it’s really large, sophisticated total building enclosures—meaning
we would [install] glass, structural glass, terra cotta, rain screens.
We became experts at the total building enclosure.”
In working with MERO, NEC is able to offer a full range of glass products
“They are experts at design, engineering [and] fabrication, whereas in
North America we’re experts at the installation and the management. So
it’s a perfect marriage. They wanted to get into the U.S. market as a
solid entity so it made perfect sense. We formed the alliance and then
we pursued jobs as a team, essentially exclusively to each other,” Becks
Bonner says that owners don’t want to break projects up because “it breaks
up the warranty. Most of these people in the glass business are buying
materials from the manufacturer second-hand. They don’t manufacture it
The Shift: Labor Only
Still, some installation companies are taking a more desperate route by
accepting labor-only contracts in order to get work.
“That’s an easy way to get around a mark-up, maybe, but massive risk goes
with it,” Becks cautions building owners and designers alike.
“Glass companies that undermine the industry by working for straight time
without material margin should go back to installing drywall … These same
individuals would also install annealed glass in a door rather than learn
how to cut laminated safety glass on the side of a truck during an emergency,”
says Martin Kerruish, consultant, designer and implementation manager
at Canada Glass and Mirror Co. in Toronto. “It is disappointing to see
the trade be cheapened by those who do not appreciate its worth and value.”
Ferguson agrees. “It’s an incredibly high amount of risk to take for an
incredibly small percentage of profit. Tough times make people do tough
things, but it’s never a first choice. You may survive but you will never
thrive on labor-only jobs.”
With somewhat less outrage, Whiteside says, “If you’ve been around for
the last 30, 40 years, you’ve seen it come and go a few times.”
Downing explains that his company provides labor-only contracts to its
sister company, a fabricator, Get The Lead Out LLC. “They’ll supply the
products and we’ll put together the package for engineering design and
installation,” Downing says. “It’s under the same umbrella.”
“If the [subcontractor] is really having enough problems that they have
gotten to a point where they’re giving the materials away straight at
cost, they’re going to hit a point where there’s not going to be any reserve
there. They’re ruining the market for anybody who’s going to be around
and they’re looking at a very quick demise of their company,” Whiteside
He continues, “If [the glazing subcontractor’s] not around later on when
things start happening to your home or at the jobsite, you’ve got to go
back to the contractors and builder that did it. Companies that have been
around substantially a long time [will] weather the hard storms.”
“Labor-only is a recipe for bankruptcy,” Bonner says point-blank.
“There is never a cause to de-value your work, never a reason to beg,
never a reason to accept the conditions forced on you by those who feel
that the work we perform could be carried out by a general contractor’s
laborer,” Kerruish says. “We are a skilled trade; however, we have always
been taken for granted. We do not enjoy the same recognition as our partners
in other trades.”
He encourages fellow glazing contractors not to “delegate our responsibility
in providing experienced advice to our clients though our interpretation
of the designs and drawings presented to us for tender. It is through
the interpretation of the design that we are able to engineer the solution
that is best suited for the application through our hands-on knowledge.
If interpretation of the design is left to the supplier, profit will be
the motivating factor.”
Whiteside has a simple secret for success. “We just always make sure that
we pay close attention to what everybody’s telling us their needs are,”
he says. “We put forth the effort from the first step to understand their
needs. And if there [are] any doubts, if they’ve got any questions, please
ask them because we can answer them. We’ll make the full process as painless
“Clients, at all levels, make value judgments,” Becks says. “A project
in which even one of the decision-makers is not value-driven—meaning they
can’t assess the value of a partnered relationship or a total enclosure—is
not a good business environment in which to operate.”
Trainor Glass Company Launches Three Design Centers
Trainor Glass in Alsip, Ill., recently opened the third of three glass design
centers so it can showcase its product offerings to designers and architects
in Chicago. The center was designed to show architects and designers the
endless potential of glass, according to the company, and includes everything
from glass stairs to kitchen countertops that change colors, to illuminated
glass shelving and shower enclosures. Trainor also keeps experienced design
consultants on-hand to assist customers with their glass projects.
Exterior uses being demonstrated include railings, fencing, awnings, sunshades
and decorative printed glass. Likewise, Trainor displays its interior glass
possibilities there, which include glass and mirrored closets, custom mirrors,
shelving, digitally printed glass, partition walls and doors, kitchen, shower
and bath glass, shower and tub enclosures, screens, glass countertops, sinks
“Chicagoans just love glass,” says Bob Trainor, chief executive officer
of the company. “Glass has a style and elegance that is fresh and unique,
and that is a value our customers recognize no matter what the economy is
1 The American Institute of Architects (AIA) Semi-Annual Consensus Construction
Forecast (January 2010). Figures when adjusted for inflation;
3 USGlass magazine Contract Glazier’s Survey 2008 and Contract Glazier’s
Survey beta test 2010;
4 USGlass magazine, August 2010, page 18;
5 Presentation at Building Owners and Managers Association Inter-
national (BOMA) 2010 Conference;
6 Presentation at 2010 Building Owners and Managers Association
7 USGlass magazine, June 2010, page 14;
8 USGlass magazine, February 2010, page 28; and
9 Interview with Jeff Leone, USGlass News Network, USGNN.com™,
August 30, 2010.
Megan Headley is editor of USGlass.
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No reproduction of any type without expressed written permission.