Wow. Well on a day that it was announced US Inflation was at its highest rate in 40 years, another bombshell was dropped. The news in case you missed it was a 40% price increase on glass from Guardian Glass… and that is not a typo. 40%. While many other industries are used to big numbers like this our industry is not, so just the number alone had people thrown. Obviously, there’s the initial emotional response in that this is a very tough pill to swallow in a domestic glass availability market that grows tighter by the day. Not to mention everything else going on in everyone’s operations. Then there’s the reality of what happens next and how do you deal with it all. The week ahead is where all of this will come to play. So what is my take on all of this? I think the timing was odd and the number way too high. I could justify past price increases and quite frankly with inflation could say one fits here, but 40%? No way. Maybe there’s a plant issue but if that was the case the letter would've/should've spelled that out. Without something like that, this number is just hard to fathom.
Now obviously there’s been a feeling for years that our products needed corrections on the pricing side but to attempt to get them in this manner, at this time, just doesn’t sit well with me. Aside from the obvious tumult this will cause, It also has the potential to damage the supply chain with GC’s and Developers pushing to go in alternate directions for material, and quite frankly some of those directions won’t be good for our industry or reputation (meaning product quality will not be as good)
But that’s me, there are probably people who have no issues with timing or total at all, though so far I have yet to talk to one, I assume as this blog gets posted I’ll hear more on it. As for the next steps... The OEM side of the business has a different runway to be able to implement this (still challenging) and they’ll be quicker to work through it. But interestingly enough the OEM side has slowed which makes the timing of this quirky. On the other side, I feel for the project folks, both fabricators and glaziers with committed jobs will have serious issues here. This increase goes into effect next week, which will surely be an issue. Even those fabricators and glaziers who may have intelligently built in escalators to protect against volatility, still won’t be covered after a number like this one.
Companies that are well run will work through this but even the best of the best will have to still reset their plans and raise their game even more. For the less sophisticated companies or those that have not taken previous increases seriously some bumpy adventures lie ahead.
The bottom line is once the emotion wipes away (which is going to take a bit), the industry will deal with it. Companies have to examine what they have going and do what they have to do to survive. I fear for the quality that now may come into our space and the ramifications of that. (Not every potential new supplier to the industry is poor, but the bad actors will make their way in) Whether or not this move, in the long run, was a good one for Guardian will be seen- I am sure the market will ultimately decide. The bottom line is we are living in some turmoil-ridden times right now and there are going to be some very tough conversations this week up and down the chain.
Elsewhere…
-- After that news above, it was hard to focus on other items- but that is what you want from me right? So this link was possibly good news on the talk of a recession in the United States. Moody’s Analytics is telling people like me to slow our roll with the predictions there. Check out what they have to say and I’d love to be wrong here but I just can’t see how we avoid it.
-- More good? The folks from my podcast last week. In case you missed it, you can catch up with the amazing Aragon brothers from Aragon Construction and the incredible Kelly Whittingham of Halio Inc. We covered a ton of ground from growing pains to best-in-class technology and more. Thank you for listening/watching
-- Good news on the GlassBuild front. The show hits in October and in the last month 25 new exhibitors signed up. That is a positive sign of people wanting to get out there and show off their goods and services. I think as we all know despite the miserable items I have talked about above and previously; we are all busy AND more importantly the need to get BETTER at what we do and how we do it is paramount.
-- Interesting blog post on the growth of modular building. I have been seeing more and more of the “it’s taking off and going crazy” posts vs. this one that pumps the brakes a little. Good read and thanks to the great Melanie Dettmer of NGA for the find!
-- Last this week… Another good read comes from Intelligent Glass Solutions magazine. This piece covers the incredible benefits of glass and there are just multiple talking points here we should all commit to memory. The article was attributed to the NSG Group so my assumption is either one of the tremendous duo of Dr. Kayla Natividad and Kyle Sword wrote it. Or maybe they collaborated but it is fabulous!
LINKS of the WEEK
The Starbucks cup controversy explained and figured out.
Falling into a tank of chocolate sounds like a dream, but not really- lucky these two are ok!
Next week I’ll a blurb on baby names but this trend of needing help is craziness. Now Ikea is offering to help… come on!
PROJECT of the WEEK
We go to Illinois this week and Nathan Seaman and Architectural Grilles and Sunshades. This is the Will County Courthouse and it is a stunner!! This design from Wight & Company and HOK rocks and obviously the kudos go to AGS for their aluminum fins to the curtainwall that just made this building so much better. According to the LinkedIn post “Threaded rods ensured perfect alignment, and custom clips concealed hardware all while overall lengths reached 46' tall on these bad boys” CONGRATS to Nathan and the gang at AGS for making the building better and our industry standing out once again!
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