Glass firm, union modify contract in face of competition

Strong competition, particularly from glass plants in India and Taiwan, means The Glass Group Inc. must review its costs periodically, but the long-term perspective for the Millville facility is good, Kenneth Rock, chairman and CEO said Monday.

After a three-month layoff from May to August when the two main plant furnaces were shut down for scheduled maintenance and for inventory adjustments, the glass plant is operating at normal production levels, Rock said Monday.There are 529 employees back at work.

A "normal shutdown period" for repairs on equipment will take place during the holidays - either Thanksgiving or Christmas - and will mean layoffs for a still-to-be determined amount of time, according to Rock.

Rock confirmed that top management has met with local and regional union officers for the GMP, Flint Workers and Teamsters.

"There has been an agreement reached on modifying the health-care plan, which does reduce the cost to the company," Rock said.

One of the issues discussed was the discrepancies in pay rates between the company's facilities in New Jersey, which Rock said are higher than companies in the glass business with the same type of products in other places.

"We were pleased with the cooperative nature of the talks with the union," said Leonard Nave, vice chairman and general counsel. "We do have strong competition out there, and from time to time we will need to review all of our costs, including labor costs, to remain competitive."

Frank Grotti, executive officer of GMP (Glass, Molders, Pottery, Plastics and Allied Workers Union), said: "We listened to what the company's situation is, as they explained it. We have worked out a compromise to extend the existing contract from May 2005 to 2006 and modified the medical plan. The company said it would go forward from there."

Grotti declined to elaborate any other details of the agreement.

The company makes products for the cosmetic and health-care industries, plus specialty products ranging from liquor decanters to steak sauce containers.

"The demand for our products has been strong," Rock said.

"During the past two months, a third furnace producing colored glass has been put in production to meet order demands," Rock said. "This is the first time that a third furnace has been run in the Millville facility since 1998.

"In June, we purchased the order book, equipment and inventory of Carr Lowrey Glass Co. (which closed its Baltimore factory)," Rock said. "That production has been absorbed in our Flat River, Mo., plant. The overflows from the business acquisition will eventually be produced in the Millville complex."

The Glass Group purchased Alcan's Molded Glass operations at the end of September 2002. Rock was president of the former Wheaton Glass Co. for five years during the 1990s. Several other top executives also were formerly associated with Wheaton Glass Co.

600450 Glass firm, union modify contract in face of competition
Date: 15 October 2003

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