IN THE NEWS

History is repeating itself in the latest downsizing of Western Pennsylvania’s glass industry.

Echoes from both the recent and distant past are evident in some the decision of fine different glass-manufacturing companies to either close or enact major cutbacks in the regional operations affecting more than 950 jobs here since mid-2004.

Problems experienced by Glenshaw Glass Co. in Shaler; Anchor Glass Container Corp. in Connellsville, Fayette County; L.E. Smith Glass in Mt. Pleasant, Westmoreland County; Mt. Houze Glass Co. in Port Marion, Fayette County; and Anchor Hocking Co’s manufacturing facility in Monaca, Beaver County, are not unlike those that have been helping trim the ranks of he region’s venerable “glass houses” for decades.

The decline has been such that the more-than-200-year-old industry - which in 1902 had as many as 150 glass factories operating in the region - is now down to about 50 different sites in the six-county Pittsburgh area, according to the Pennsylvania Center for Workforce Information and Analysis.

Total employment was about 3,900 at the end of 2003, said Michele Hiester, a state labor market analyst. That’s down from 4,664 in the previous three years, and it was before the new cutbacks that started in 2004.

“Much like in the Steel industry, we’ve had conglomerations of factories coming together and then a gradual sheering off of less effective factories,” said Anne Madarasz, chief curator of the Senator John Heinz Regional History Center in the Strip District.

There’s not really that much new when it comes to factors that affect the health of the regions’ glass operations, said Madarasz, an acknowledged industry expert.

Foreign competition is an example.

“International competition is as old as the industry itself,” she said.

The War of 1812, for instance, was very beneficial to the growth of the glass industry in the region, she said, because the government ordered a halt to British glass imports, which were hurting the growth of domestic companies.

Shrinking domestic markets, foreign competition, product dumping and price slashing by U.S. Competitors were among the problems cited when local glassware maker Jeannette Corp. shut its doors in 1982.

Two years later, Westmoreland Glass Co., a business founded in Grapeville in 1888 closed its doors because its labor-intensive production of hand made milk glass, crystal tableware and colored glass items no longer could keep up with low-cost competition.

And in 1993, PPG Industries Inc., cited long-standing “uncompetitive” operating costs and depressed markets when it announced the closings of its more than-100-year-old glass plant in Ford City and its auto-glass windshield plain in South Greensburg within a short time span.

It was more of he same in some recent cutbacks.

When Anchor Glass container corp. suddenly shutdown its Connellsville plant and put 300 people out of work in November, it blames excess capacity in the glass industry as its main problem.

And in January, Westerville, Ohio-based Anchor Hocking, said it is cutting 250 jobs at its Monaca plant because of increased efficiency of its operations, lack of growth in the glass business and foreign competition.

The Monaca plant makes candle jars and lighting fixtures.

One factor that has been a more recent problem for many glass companies, both large and small, has been the rapidly escalating cost of energy, plant officially and industry experts say.

At the Glenshaw Glass bottle plant, monthly gas bills that had been about $300,000 before 2003 ramped up to and average of about $450,000 per month prior to the plants closing. In March 2003, the gas bill hit an unusual high of $850,000, said Jerry Tremel, chief financial officer.

“You have to sell a lot of bottles to cover that,” Temel said.

But there were some unique circumstances that adversely affected operations at Glenshaw Glass, said Jim Boys, vice president of operations. Among them was damage caused by the region’s Sept. 17 floods. One of the plant’s four glass furnaces was damaged during the flood, and another was shut down because of a fire shortly thereafter. In the wake of those events and other damage, production fell below levels necessary to sustain operations.

Also, the plant closed after workers rejected an interim $860,000 concessions proposal put forth by Margaret Good, president of the Meridian Group, a court-appointed receiver, who continues to try finding a new operator for the 110-year-old maker of glass bottled formerly owned by businessman John Ghaznavi.

Workers put the blame for the plant’s demise on Ghaznavi, saying he failed to invest sufficiently in the plant.

The glass-container segment of he industry is highly capital-intensive and requires companies to be cost-competitive to keep getting business from what is a limited number of customers, said Phil Ross, an independent industry consultant in the Laguna Niguel, Calif.

“Glenshaw Glass probably will need between $15million and $25million in capital investment,” said Good, but if it secures is, she believes a new owner with sufficient commitment can make the plant a successful operation.

“I think this is a gold mine waiting to happen, Boys said.

St. George Crystal, a Jeannette-based make of lead crystal tableware and glassware, is among the local surviving glass industry players, but that doesn’t mean it’s been easy, said President Bob Rifenburgh.

The company, which employs about 265 full-time workers, has been able to grow despite rising energy costs and increasing competition from China and several Eastern European countries, some subsidized by their governments.

“It’s hard to make it up when you are competing with 50-cent-an-hour labor costs, “Rifenburgh said. But the company has been able to retain a loyal customer base by stressing quality and service.

“We can’t compete on wages in global markets, that’ no an option,” agreed Stephen Herzenberg, executive director of the Keystone Research Center, a Harrisburg think tank. “So we have to find markets where quality, innovation and proximity to customers allow us to compete on another basis.”

Herzenberg said the United States needs a national policy that helps all American manufacturers adjust to competitive pressures in the global marketplace.

“We are responding,” said Arlene J. Caliguire, manager of the Jamestown Crystal Outlet, which opened two years ago with the help of Westmoreland County economic-development officials at the closed Lenox Inc. plant in Mt. Pleasant. It features vases, bowls and crystal stemware made by some of the region’s surviving companies, including St. George Crystal and Youghiogheny Art Glass in Connellsville, among others.

“Business has been good; we have a lot of repeat customers,” said Caliguire. “But more people have to buy American-made products.”

Calguire said she hopes to soon receive a new supply of items from L.E. Smith Glass, whose products have been more scarce since problems that surfaced last year forced a temporary closing and then scaled back return to operations.

But the company just last week was acquired by William A. Kelman, a Pittsburgh businessman who has plans to revitalize the operation.

Kelman agrees that the company faces competitive pressures from cheap foreign imports and rising energy costs.

“But we just have to manage under those conditions,” he said.

To counter those pressures, Kelman said L.E. Smith intends to introduce new products and “diversify” the business. We’re looking to broaden our existing product line a little bit. You’ll also likely see the acquisition of a couple of complementary businesses in the near future,” said Kelman, who did not divulge the identities of potential targets.

Staff writer C.M. Mortimer contributed to this report.