PPG Industries Inc.“s plan to sell its automotive glass business has been welcomed by analysts while workers at its Creighton, Pennsylvania plant are cautiously optimistic that a strong orderbook aug…
PPG Industries Inc.“s plan to sell its automotive glass business has been welcomed by analysts while workers at its Creighton, Pennsylvania plant are cautiously optimistic that a strong orderbook augurs well for the future under new ownership. PPG announced an agreement 13 September 2007 with Platinum Equity, a Beverly Hills, Calif., private acquisition and operating company, to sell its automotive original equipment, replacement and service businesses for about USD 500 million. The deal includes nine North American plants that manufacture and fabricate automotive glass products. Bob Uzmack of Tarentum, a former union president at the Creighton plant, believes it will remain in operation. It was the first glass plant opened by PPG in 1883. “We had one of the high-up vice presidents talk to us recently, and he told us about a lot of the automakers who have big contracts coming to us”, said Uzmack, who has worked at the plant for 29 years. The glass workers are represented by United Steelworkers Local 12-G. Much of the work at Creighton involves making windshields for cars that automakers in the United States have stopped making, Uzmack said. All the tooling for those cars has been bought by automakers overseas, particularly in Russia. Those automakers will continue making and selling those cars in Europe, Mr. Uzmack said. “I see contracts for us for the next four, five, six years”, he said. PPG“s plans to sell the automotive glass business played well with Wall Street analysts: “This is basically a home run for (PPG). It allows the company to concentrate on higher growth areas than the (automotive) glass business”, said William Selesky, an analyst who follows PPG for Argus Research in New York. Those higher growth areas include coatings, he said. “It“s very difficult for them to turn a profit” in automotive glass, Mr. Selesky said. The firm“s autoglass competitors are in the same situation, he added. Because of PPG“s recent solid performance in a challenging environment and its restructuring, “we can see our way to earnings approaching USD 6 a share in the not-too-distant future”, said Frank J. Mitsch, managing director of BB&T Capital Markets in New York. However, veteran PPG worker Cathy Mlynarski of Lower Burrell, like the other 230 workers at the Creighton plant, are cautiously hopeful that the plant will continue operating under new ownership. “I don“t think it will close, because they make a lot of money there”, Mlynarski said. “We work a lot of overtime on the weekends, and they wouldn“t be paying overtime if they weren“t making money”. Platinum Equity said it intends to operate the plants through an acquisition company. Mark Barnhill, Platinum Equity spokesman, declined to talk about the future operations of the plants it will acquire from PPG.