Tuesday, March 31, 2009

Pure Insanity

Tons of stuff this week… tons of topics too... but they will all go the backburner so we can talk about the biggest issue out there… USGNN’s tremendous effort on blowing the cover off the Chinese supply of glass to the bottom 20 floors of America’s next great monument the Freedom Tower… aka One World Trade Center…

Pretty sickening eh? If you missed the story on the fact that a huge American landmark will have 20 floors worth of communist Chinese glass, click HERE. (Note the rest of the building is Viracon, so at least they got that right).

Also ABC News in NY did a great piece on it and you can view that HERE.

Overall this is a sad issue but not unexpected… what bothered me the most is the fact that WABC reported that the Port Authority has gone to China to monitor the glass and will continue to do so. Ummmm… since when were the taxpayers of NY and the US flush with enough money to support that part of it?

At the end of the day this is no different the Sprint Arena in KC where the mayor of that town blindly ignored the Buy American provision (more on that in a separate post) to allow the Chinese glass. Or the council in Durham, NC that allowed their airport to have all chinese stuff. Amazingly, this is allowed to happen but maybe this job, with the high profile will change it.

I know that USGNN got at least one incredible letter from a fired up industry guy and one of the items he mentioned was it was time to take on the higher levels of government on this one… see if they can scrape the egg off their face. Already the senior senator of NY jumped in…. Regardless this is extremely shameful and you have to wonder who else the Port Authority is allowing to provide material. Simply disgusting…

But there is a sad irony here… and I had several people e-mail me to remind of it… what’s lost in this issue is that PPG’s dealing with China came back to bite them… When I first started this blog I linked to an article called “Sleeping with the Enemy” and it was about PPG doing work with the Chinese. The full piece is HERE, but how about this line:

PPG now actively co-operates with many Chinese glass manufacturers, ranging from contractual arrangements to technology licensing. "We give orders to Chinese companies and then we supply them in the United States or we license our technology to local companies to help them develop better glass," Diggs says.

Yep bet your glad you helped them develop BETTER glass… unreal. Whether or not it’s the same company or not that is supplying this job, by teaching and selling the formulas you opened up yourself for this mess. I am sorry that PPG spent so much time and money and now looks to be burned by this, but years ago that thought did not come into play… and with China also being a part of PPG’s vaunted CFP program when do you think that issue will raise its ugly head?

Oh and don’t worry at this depressing rate I am sure when the White House needs new glass it will probably come from Colombia.

That’s it for now, but something tells me there’s more to come on this….


Anonymous said...

Great blog Max! I burst out laughing in my office this afternoon when I read that PPG licensed out "Starphire/Starlite" to a Chinese float company and they lost the project to them! Ha ha ha! (Sorry did it again)

Now they're complaining they spent a wad of cash and a ton of man hours on equipment upgrades, and... Trying to appeal to our softer side, that 40 people lost their jobs? Com'on, what do they take the American public for, a bunch of dopes??? *sigh*

Wasn't it just a month or so ago that PPG put out the advertisement that they were gonna do this project? When I read it, it sounded like they were doing the whole tower. Now I understand they got nothing out of this.

To top it off the Zetian name pops up again. These are the same guys that helped ruin Las Vegas by taking products direct to the owners on Panorama III, Fountain Blue (which looks awful) and others... Then they would go and convince the local Vegas glazing contractors on a sweet payout to do the install and everyone got screwed. Yee haa, now we have a Chinese re-distributor that will sell to just about anyone and a Chinese glass supplier that bought the recipe from PPG on our most recognized building. That's criminal.

I feel bad for W&W and APG, these are great companies that should be on this project. Too bad for Barber, they did the right thing and got beat by the low price. I hope for their sake that this goes down like most of these do.

The low price never, ever equals the cost of doing business. When you buy the cheapest product you get the cheapest product, and everyone who reads this knows exactly what that means. When this is all said and done I'll bet a tub of beer at the BEC that this thing is a disaster.


Max Perilstein said...

Thank you- tremendous post... and I fogot about the Vegas factors...
I also agree on W&W... (don't know the APG guys) but W&W are top of the line, people and company.

And you are so right that this thing is headed for a nightmare.. funniest part is that I would bet the Port Authority probably doesn't pay real well... so maybe thats why they used the chinese, so they could pay them in 300+ days!

Again thanks for the post...

Anonymous said...

"Com'on, what do they take the American public for, a bunch of dopes??? *sigh*"

Given the way of things, it would appear that perhaps we are.

Anonymous said...

The finished product on the Podium section of the Freedom Tower will be of exceptional quality. Chinese investment in fenestration production technologies has far outpaced domestic investment for some time now. From what I have learned of the situation, there were a few small specialty US qualified suppliers of the components specified. These companies may not have had the production capabilities to produce material in the time required and may have sensed the exclusivity of the specs (proprietary nature). How many times have we all done preliminary legwork on a mammoth project and had it come back to bite us. Suffice it to say that being a public project, this was bound to happen. If R&D and capital investment in the US were sufficient, we would not be having this conversation. Take a trip to China and be prepared to be blown away at the production technology and labor. I am sick and tired of hearing racial undertones to blogs and reporting. Stop complaining and start investing in plant/equiptment/labor.

Max Perilstein said...

Ok.. I'll bite... first off thanks for posting... appreciate the take.

Now on to your post...

This issue has nothing to do with equipment or capital. I know of many fabricators who could do this project- even with the amazing difficulties. This issue is strictly LABOR... and the fact that the chinese can pay someone $10 per day and not have to worry about things like OSHA and insurance... or human rights or pollution... so on and so on...

Please don't try to make this an issue of the North American fabricators not invensting in labor, because that playing field will never be even.

As for equipment, I hear all the time about the greatness of the Chinese material, but then I also hear from people who have invested in such equipment the nightmares that come with it and the severe lack of durability features it provides.

Capital invetsment in North America is more than fine, I can name several companies off the top of my head that have invested a ton in their facilities and will continue to do so... now if they could hire 70 chinese nationals and pay them the same wage they'd make in China they'd be set.

So it's your last point I find hard to understand, how does investing in "labor" work?

Also what are the racial overtones that you saw on this blog? is it because I call them "communist" chinese? And I know people have made comments about "same ting" and for that you may have a point, but for the people that feel that way, they'll been burned by chinese reps and manufacturers representing themselves falsely as being able to provide equals when they can't...

All in all this issue comes down to money... and because the chinese can produce products for a fraction of the price comes from labor and nothing else... but then again there's many home builders who bought chinese drywall for cheap and let's see where that got them shall we?

Plus who will back the warranty when things go wrong? You could ask many a homeowner in Florida that right now...

Anyway I appreciate the opposing viewpoint and we'll all have to sit back and see how this plays out.

Anonymous said...

I agree with you on this one Max.

Even the Port Authority guy said this was about the money...

Chinese products are cheap, plain and simple. They do not have great equipment; they rip off someone else's design, build it cheaply, paint it green and sell it for $.70 cents on the dollar.

They do not make a great product, the steal the technology by reverse engineering a coating and then marketing it $.70 on the dollar.

How about the assessment that a test was completed and found +/- 12% lead in their ceramic frit? Did they not read the rulebook on utilizing lead? Have you seen their roller wave on the Cosmopolitan project in Vegas? Yikes. Spontaneous breakage in heavy tempered glass? Do you really think they'll roll back into town and take some responsibility? What about replacement glass? Can you wait until they decide to get into that run again? Serious on this one, plenty of examples where the last few units to close up the building have to be filled with a temporary because they will not get back into the run. This is where the real money is lost....

I further agree with Max, unless you can load up labor (that are willing to live in a shanty behind the glass plant and work for US $7 per day) and bring them to the U.S. then this strategy will not work.

Don't tell me that this doesn't happen. I've traveled from Shenzhen to Beijing to visit their plants. I've seen it, I've taken their management teams to dinner and asked how they do it, and the answer is the same. "State money invested, copy-cat equipment if they can't afford the real thing and cheap labor."

All Chinese products bad? No, there are a few decent ones.

PPG does not qualify, as a small component supplier the glass is the biggest piece of this wall. Now, shame on them for selling out their recipe, but they were qualified. The whole raw material LEED deal sure went out the window fast. I guess not even the Port Authority support that initiative.

Barber glass has the technology; they had invested in it over the last 2 years. W&W being beat out by the Chinese redistributors Zetian is nothing but a money deal. You can't say that W&W wasn't qualified to do this project

Racial overtones and telling the American public to get better is not the answer.

I love the chatter on this topic. Keep it coming.


Max Perilstein said...

Thanks for the post and some great examples...

This is good, time to shine the light and get it all out on the table.

Anonymous said...

I've made several trips to China related to architectural glass and glazing applications including one to investigate their request for a joint venture to operate a new state-of-the-art vacuum deposition glass coating line. Their interest in the joint venture was essentially for us to teach them how to operate the equipment purchased by the communist Chinese government.

Fortunately, we did not enter into that joint venture. I say fortunately, because I have since heard of numerous such relationships that immediately fell apart once the basic operating knowledge was obtained.

I know that the problems with the Martha Stewart line of patio glass top furniture that has experienced high levels of spontaneous breakage of tempered glass came from Chinese / Asian fabricators.

I know of projects where hundreds of doors were shipped to the United States with glass that was labeled "Meets ASTM C 1048" and no reference or assurance that the glass actually meets the ANSI Z97.1 or CPSC 16 CFR 1201 safety glazing requirements.

I know that there are continually issues with architectural glass products that are imported from communist China.

I know that I've been in the "Executive Lunchroom" of Chinese firms and looked out the window to see company tent villages where many of their workers live and seen rats the size of cats running the through the "living quarters."

I know that if an employee in one of these tent villages doesn't like the conditions they would be quickly replaced by one of thousands of others that would accept their position in communist China.

I know that I was a part of a group of three individuals that had film stripped from a camera by Chinese military after having our picture taken in front of concession stand in a communist China train station.

I know that labor cost is the factor of why they can offer the lowest price for glass or any other goods or materials.

I know that there are little or no human rights in communist China.

Last of all, I would bet that the previous responder is serving as a manufacturer's representative for a glass manufacturer / fabricator from communist China!

Max Perilstein said...

and I guess I could say "I know" that was a great post. Thank you for that and the insight you brought on...

Man with the action on the blog tonight I'll never get to log off!

Anonymous said...

I too visited China to investigate opportunities in the glass industry. I agree with the posts here - the government not only buys equipment, but also forgives loans, etc.

If the playing field were equal, I am confident the North American glass industry could compete. Just look at our relationship with suppliers from Italy, Germany, and others in nations that control safety, the enviroment, and worker rights. You don't see French glass going into the tower that is just up the harbor from their gift to us - Lady Liberty.

That being said, we can't sit back bitching and moaning. It is what it is. Move on and try to improve your operations to control what you can control.

Keep working on the biggest advantage that North American industry has. That is innovation and initiative. The copycat cultures can make quick strides, but cannot keep up with sustained innovation and entrepreneural gumption.

Pete C

Anonymous said...

Got backdoored by the Chinamen! HahAHA!! Gotta give to em, they are just the cheap leaches sucking the cash right out of these capitalistic clones!!

Can see it now, opening ceremony:
My fellow Americans the time has come to show the world that we will not let any other country invade our borders and knock us down with blow like we took on 911. You the taxpayer has shown to the world that we can erect our sign of freedom with the hard-nose work done by the thousands of laid off PPG workers, oh and lets not forget the Chinese without them this tower could not have been constructed as fast and as cheap as it has been. Lets all take a bow to the Chinese and PPG for getting this project done!!

Anonymous said...

In my opinion, the Chinese "advantage" is not limited to cheap labour. The chinese government is also known to give away buildings and equipment.

But most important of all, the chinese government refuses to let its currency float in the free monetary market. Instead, they fix the value so low that chinese suppliers collecting strong currencies go laughing at the bank. That is simply unfair competition in the global market.