Glenshaw Glass Co. to close Monday

Glenshaw Glass Co., a venerable, 109-year-old maker of glass bottles, will shut down its furnaces Monday and put more than 300 employees out of work after frenetic attempts to find a buyer for the struggling plant came up short, a court-appointed receiver said Friday.

Margaret Good, president of the Meridian Group -- appointed by a county judge to take over management of the plant from long-time owner John Ghaznavi -- broke the news to the plant's employees at 5 p.m. Friday.

"We are not giving up on a potential sale, but if one takes place it will be after the shutdown," Good said in a statement. She could not be reached for further comment.

Employees will work though the weekend at the plant, Shaler's largest private employer. About 44 employees will continue working next week to ensure an "orderly shutdown" of the plant so it can be re-started quickly if a buyer is found, Good said. They will also work to sell existing inventory and collect accounts receivable.

The closing will be the second time this month that a major glass plant in Western Pennsylvania has closed. On Nov. 5, Tampa, Fla.-based Anchor Glass Container Corp. unexpectedly shuttered its plant in Connellsville, Fayette County, sending 300 to the unemployment line.

Good said last week there were five investors examining the plant, which sells bottles to Pittsburgh Brewing Co., Yuengling Brewing and others. Included in the group was Boca Raton, Fla.-based leveraged buy-out firm Sun Capital partners.

Sun Capital had been in talks with Ghaznavi prior to the Sept. 17 flooding that shut the plant down for two weeks before workers, on their own time, struggled to re-start two of the furnaces.

Ghaznavi has said the flooding caused $27 million in damage to the plant and its equipment.

Ghaznavi and Sun Capital could not be reached for comment.

Lou Brudnock, president of Local 34 of the Glass, Molders, Pottery and Plastics Allied Workers International Union, said he had hoped the plant's largest creditor, PNC Financial Services Group, would have invested more to keep the plant operating until a buyer could be found.

But he acknowledged that running the plant became increasingly difficult in recent months, especially with some suppliers reluctant to do business with Glenshaw.

Brudnock said he spoke with a local investor group Friday that said it would continue "working its numbers" even in the event of a shutdown.

"I'm still hopeful a deal can be done," he said. "We have a tremendous work force and produce an excellent product."

Dennis Ostrowski, an 18-year Glenshaw employee from Saxonburg, said he was still in "denial" that the plant would be closing.

"We've heard this might happen so many times, but it's still hard to believe," he said.

"I felt like crying," said his wife, Susannah. "Glenshaw Glass has been part of our lives since we first met. I've never seen a group of people more dedicated than the people down there."

On Nov. 10, the union narrowly rejected $860,000 in interim concessions requested by Meridian, a local management consulting group.

Good had said rejection of the concessions would narrow her time frame for operating the plant while seeking a buyer because of the plant's sustained financial losses.

Jim Watt, a staff representative with the United Steelworkers of America, which represents about 11 employees at the plant, said prospective buyers have said the plant needs to expand its capacity beyond the current two furnaces to operate profitably.

He said it would take an investment of $750,000 to $900,000 to get another furnace running, adding that a local group of investors may still be interested in buying the plant.

The bottom of the plant's "No. 4" furnace failed two weeks after the flooding, sending molten glass into the basement. It was this area in which 34-year plant veteran Clark Weber was killed Oct. 16 in an accident involving a conveyor belt. The incident is still under investigation.

It was the plant's first-ever fatality.

Another company that has examined the Glenshaw plant said it is only interested in its assets, but not in operating the plant.

"We did contact PNC Bank. We have an interest in possibly buying equipment should the plant close," said Lee Farlander, U.S. president of Monterrey, Mexico-based Vitro Packaging.

Ghaznavi bought Glenshaw in 1988, and during the 1990s leveraged his $13 million investment into a sprawling glass-making empire based out of Toronto with the purchase of Canada's largest glass bottle maker.

In 1997, in his position as chairman of Consumers Packaging Inc., he acquired Anchor Glass Container. But his empire began unraveling early in 2001 when Consumers stopped making payments on its bonds used to acquire Anchor and fell into the Canadian equivalent of Chapter 11 bankruptcy protection. Ghaznavi was ousted as the company's chief executive.

When Toledo, Ohio-based glass giant Owens-Illinois Inc. acquired Consumer Packaging's Canadian plants, Ghaznavi struck a deal to retain a majority stake in Anchor Glass, but he was subsequently pushed out as Anchor emerged from Chapter 11 protection in August 2002, leaving him with only the Glenshaw plant where he started.

600450 Glenshaw Glass Co. to close Monday
Date: 22 November 2004

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