e-glass weekly - February 6, 2007
Vol 2 | Num 6
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Bonus of bonuses

Glass companies rely on incentive programs to motivate employees

Part one of three in the
e-glass HR series


Whether it's annual bonuses or performance-based pay raises, glass company executives say financial incentives improve employee attendance, increase motivation and advance overall job performance...

Glass companies rely on incentive programs to motivate employees

Read about retirement plans and rising health care costs in the next two parts of the
e-glass HR series


Whether it's annual bonuses or performance-based pay raises, glass company executives say financial incentives improve employee attendance, increase motivation and advance overall job performance.

“Sharing the profits with the people that made it possible is important and is motivating,” says Jeff Bear, president of JMD Architectural Products Inc. in Tipp City, Ohio.

JMD offers annual bonuses to supervisors and estimators based on company profits. The company has given bonuses for all but one year in the last 20, Bear says. “[Incentives] are based on how the company does,” he says. “If it’s a bad year, there are no bonuses.”

Bill Evans, president of Evans Glass Co. in Nashville says he also offers bonuses based on the company’s success. “Last year, bonuses ran from about $6,000 to $1,000 a person,” he says. “This year they’re going up from that.”

Because bonuses ride on the company’s overall success, peer motivation becomes common as employees police one another to maximize productivity, Evans says. “If they have someone slacking off, they realize that money is on the line,” he says.

In addition, Evans says employees pay raises also can act as incentives.

“I don’t directly give pay raises predicated just on performance,” Evans says. “I’m more likely to give them based on attitude, when attitude is backed by sufficient work.”

Craftsman Fabricated Glass in Houston rewards employees through wage increases that are based on individual performance, says Alan Grater, plant manager.

Craftsman performs annual reviews for all employees, salaried and hourly, to carefully assess all aspects of employee performance, including safety record, equipment operation capabilities and attendance, Grater says. Pay raises are issued individually based on the review process, he says.

“The real objective is to make sure we are taking care of our top performers,” Grater says. “We aren’t giving increases just to performance efficient employees. … We are communicating the fact that you have to be valuable to yourself and your company in many ways.”

Demand for high-tech glazing systems prompts Enclos, ASI deal

Sophisticated glazing elements such as glass-clad tension structures, monumental skylights, point-supported systems and cable nets are in ever-growing demand from architects...

Sophisticated glazing elements such as glass-clad tension structures, monumental skylights, point-supported systems and cable nets are in ever-growing demand from architects.

“There is a conversion underway in the marketplace as newer [curtain wall] technology replaces the more conventional in more and larger applications,” says Mic Patterson, director of preconstruction services for Advanced Structures Inc. in Los Angeles. “While the desire for transparency drove the early development of this technology, performance is increasingly the driver toward more sophisticated facade and enclosure systems.”

To better serve this growing demand, Enclos Corp. of Eagan, Minn., acquired ASI, a design and engineering firm for specialty structures and façades, according to Enclos officials.

“About 50 percent of Enclos’ projects contain some portion of these ASI-type systems,” says Gregg Sage, Enclos president and chief executive officer. “Before the acquisition, Enclos had the expertise and experience to engineer significant monumental steel and glass wall systems. The acquisition increases the breadth and depth of Enclos’ in-house expertise in this area.”

Steve Burnett, president of Walters & Wolf Curtain Wall in Seattle, says the industry-wide effects of the deal depend on whether ASI serves exclusively for Enclos.

“If they are going 100 percent to Enclos, then they’re out of the industry,” Burnett says.

Enclos designs, engineers, fabricates and installs curtain wall systems. The acquisition increases Enclos’ design team from about 75 to 95. The 20 additional designers and engineers from ASI will work out of one office in Los Angeles, focusing exclusively on monumental wall systems, Sage says.

While Enclos will continue to perform the same range of work, the addition of ASI will allow the company to increase its involvement on the more sophisticated systems.

“We strive to be a leader in curtain wall technology; we also want to be a leader in similar technologies that go hand-in-hand with our curtain wall systems, and ASI should give us that ability,” Sage says. “We can now control our own research and development efforts regarding new technology in this area, rather than relying on a supplier.”

This ability also serves general contractors by providing a “one-stop-shop,” Sage says.

For ASI, the deal provides the firm with the organizational and financial backing to keep up with the growing demand, Patterson says. “ASI led the introduction of this new technology. But if it is to maintain a leadership position as the technology matures, it must have the operational depth and financial strength necessary to keep pace with the potential growth.”

The details of the deal were not released.

Nonresidential building drives construction spending up 4.8 percent in 2006

Despite the declining residential building market, total construction spending in 2006 reached $1.2 trillion, up 4.8 percent from 2005, according to a Jan. 31 release from the U.S. Census Bureau of the Department of Commerce...

Despite the declining residential building market, total construction spending in 2006 reached $1.2 trillion, up 4.8 percent from 2005, according to a Jan. 31 release from the U.S. Census Bureau of the Department of Commerce.

Spending in the residential sector fell from $651 billion to $639 billion, a 1.7 percent decline, while nonresidential spending increased 13.3 percent from $493 billion to $559 billion, according to the release.

Within the nonresidential segment, the lodging category saw spending gains of 53.3 percent, increasing from $13 billion to $20 billion. Office spending increased 14.4 percent from $47.7 billion in 2005 to $54.6 billion in 2006, and commercial construction increased 9.8 percent from $73.7 billion to $80.9 billion, according to the release.

The health care and educational categories also saw gains, rising 14.1 percent and 6.6 percent, respectively, according to the release.

Construction spending in December alone, however, dipped 0.4 percent from November, and 1.4 percent from December 2005, according to the release.

For the complete Census Bureau release, click here.

January construction spending data will be released March 1.

The week's business headlines

...

Pilkington brings legal action against Vitro
Officials from United Kingdom-based glassmaker Pilkington announced Feb. 2 that the company will start a legal case against fellow glassmaker Vitro of Mexico, according to Reuters report the same day.

Pilkington officials say Vitro attempted to merge a joint-venture into another company without informing Pilkington officials, according to the report … read more

Asahi Glass expects profits to double in 2007
Officials from Japan’s Asahi Glass Co. announced Feb. 5 that they expect net profits to double in 2007, based on strong demand for flat panel display glass, according to a Feb. 5 Reuters article… read more

Oldcastle parent sued for $120 million
Port Dock Holdings of New York is suing CRH of Ireland, parent of Santa Monica, Calif.-based Oldcastle Glass, for $120 million. Officials at Port Dock claim that CRH’s affiliates created a monopoly in the New York City area, forcing Port Dock to sell its assets “far below fair market value,” according to a Feb. 2 article in Business World … read more

Increases in glass production might prevent China from reaching energy reduction goals
Chinese government officials report the country is unlikely to reduce its energy consumption by 20 percent by 2010, its previous energy reduction target, according to a Feb. 1 article from China Business News On-Line… read more

Production begins at Advent Solar’s new facility
Solar panel manufacturer Advent Solar of Albuquerque started production at its facility in Mesa de Sol development in Albuquerque, according to a Feb. 1 article from the Albuquerque Journal. The grand opening of the facility will take place Feb. 22… read more

Drop in Indonesian tin production predicted for 2007
Indonesia is predicted to decrease output by up to a third this year due to new government environmental regulations, according to a Jan. 31 FT.com article. Tin is a critical material in float glass production, and Indonesia is the world’s largest tin exporter, according to the article.

Thobrani Alwi, the president of Timah, the country's largest tin manufacturer, made the prediction Jan. 30, according to the article … read more

Financial company ups ratings for Vitro
New York City-based Fitch Ratings, a financial ratings company, upgraded Mexican glassmaker Vitro’s Issuer Default Rating from ‘CCC’ to ‘B’, according to a Jan. 30 Fitch Ratings release.

Fitch also upgraded ratings for Vitro’s $1 billion notes offering and $225 million senior unsecured notes, according to the release.

Fitch officials said the upgrades come as a result of Vitro’s improved capital structure and debt profile, according to the release … read more