Workers at glass plant find hope

As workers drained the remaining molten glass from the tanks at Glenshaw Glass Co. Tuesday, a glimmer of hope emerged for the plant's more than 300 employees as a new potential buyer surfaced, said the court-appointed receiver.

Meanwhile, the plant's former owner, John Ghaznavi, said Glenshaw's employees "turned their back" on him as he worked to keep the plant open while losing between $300,000 and $400,000 of his own money each month.

In his first statements since the receiver took over, Ghaznavi said yesterday that the plant's largest creditor, PNC Bank, had been "more than fair" to the company before ultimately deciding on Friday to cease manufacturing at the 109-year-old glass bottle maker -- a process completed yesterday -- although about 44 workers remain to monitor the plant and sell off remaining inventory.

"Another bank could have put (the plant) down two years ago," he said.

Margaret Good, president of Meridian Group, a local management company tapped by PNC Nov. 5 to take control from Ghaznavi, said yesterday that there is a window of up to four weeks to identify a buyer as the plant's equipment is reconditioned to prepare it for sale if a new operator cannot be found.

"I met with a prospective buyer for a few hours today with industry experience and plenty of capital who has had initial discussions with the state government," she said, declining to name the group.

Good said after talking to engineers she believes the plant needs about $5 million in capital investment to get three of its furnaces functioning optimally. She said the shutting down of the plant's furnaces will not affect by a significant amount the amount of investment needed to restart them.

She said the Glenshaw plant needs better management, including improved inventory controls to reduce off-site warehousing, improved vendor management, administrative overhead cost reductions and changes to union work rules.

"There are a number of areas that could be tightened up that would allow this company to be profitable," she said.

Ghaznavi said the plant was in similarly desperate straits when he took over in 1988.

"I came in and invested $13 million," he said. "I did three furnaces one after the other."

The plant's union leaders have acknowledged that Ghaznavi served Glenshaw well upon his arrival. But they contend he used Glenshaw as a piggy bank in the late 1990s to acquire a controlling stake in Consumers Packaging Inc., Canada's largest glass container manufacturer, and from there for Consumers to acquire Anchor Glass Container Corp. -- the Tampa, Fla.-based company that shut down its bottle making plant in Connellsville, Fayette County, on Nov. 4.

Ghaznavi said yesterday that bank debt and not money made at Glenshaw was used to acquire Consumers Packaging, which issued bond debt for its acquisition of Anchor.

He said Glenshaw clearly benefitted from being part of a larger conglomerate.

"I needed more business for Glenshaw. Consumers helped pay Glenshaw's debt. We brought a lot of wine and liquor bottle (production) to Glenshaw from Consumers," he said.

When Ghaznavi's glass empire shattered under the weight of its debt and high natural gas prices, others picked up the pieces. Owens-Illinois Inc. acquired Consumer Packaging's Canadian plants and Anchor went through Chapter 11 bankruptcy after Ghaznavi briefly reacquired it.

But nobody, he said, wanted the Glenshaw plant, which he reacquired out of the Canadian equivalent of bankruptcy early in 2002.

"(Glenshaw) had a lot of debt hanging around its neck when I bought it back," he said, estimating the amount at about $50 million, including a pension underfunded by about $16 million.

He said he has invested another $6 million to $8 million in the plant since reacquiring it, including last year's rebuilding of one of the furnaces, but he said he could never overcome employee skepticism that he was robbing the company.

"They never believed me," he said. "For 16 years, I put bread on their table. They were angry because I didn't put more on their table. I love them all and wish them the best. They are like family to me."

He said he would be willing to serve as an adviser or consultant to anybody who acquires the plant, but said that if a buyer can't be identified quickly, Good should proceed with selling off the assets in order to get as much value out of them as possible for the bank, vendors and himself.

Ghaznavi said he will focus now on his real estate leasing and distribution businesses, which he said are "a lot more fun."

600450 Workers at glass plant find hope
Date: 25 November 2004

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