What, Really, Does The Arch Bankruptcy Mean To A Glass Shop?

You've read the news, Arch Aluminum filed for bankruptcy. What does this mean to you? Odds are, not much. If anything, it will help the average glass company who is a customer of Arch.

Huh?

Yes, if you had your ear to the ground, this had been rumored for a while. Arch's management has spent a boatload of time worrying about this, setting it up, and preparing for the future. Now that the future is here, and well defined, they can get back to the glass business and Arch's employees can be assured their jobs are continuing. Your service should improve as everyone can let their breath out and go back to business as usual. Arch was a glass fabrication company, not one of these financial super markets. The bankruptcy won't interfere with their core business. Sure, the bankruptcy is going to hurt their vendors and the owning family, but the glass and metal customers will come out ahead.

If you were an Arch customer, continue to be one. They are not going anywhere. There is a temptation to shop around, and it is always a good idea to compare vendors, but don't switch just because of the bankruptcy. What brought Arch down was the debt that drove their growth, not their operations or their production. The skills of 1900 employees are not going anywhere.

Pilkington and PPG are going to take a hit. So are Guardian and Bonnell. They will all survive this. The glass industry as a whole will not be hurt by this. The biggest losers will be the banks. They knew the risks of loaning money, and got paid for their risks. I don't feel sorry for them. That is their business, no differently than folks in our industry bidding on a job, and finding extra costs associated with the job. If you don't do a proper takeoff, and really study the job, this will happen.

Some people already have said to me that the Silverstein family is making out like a banshee. I promise you this is not the case. I know that an event like this feels like a member of the family is severely sick, and then a magic medicine helps bring back the life. The only one who will be making a ton of money on this will be the attorneys. Nobody at Arch wanted this to happen, and everyone there is working to make the company healthy again. Ten years ago, filing for bankruptcy carried a stigma, totally negative. Unfortunately, today, it is thought to be 'good business' to rid yourself of debt.

I have owned four Chevy's in the past 14 years, and I will certainly buy another one when my current car gives up the ghost. The fact that GM went through bankruptcy actually makes me feel better about buying a car, because I am sure they are now healthy enough to stand behind it. You should feel the same way about Arch.

I read an interesting note on the US Glass News page today. One of the oldest and best known companies in the glass industry also filed for bankruptcy this week...The Fletcher Terry Company, the company that controlled the market by making the best glass cutters in America. What happened here? Can we blame the recession and its impact on the construction industry? Can we blame imports? We don't know. Events like this happen in all industries.

The Silversteins are smart people, and their staff is truly capable. They will make Arch Aluminum viable for their customers. Count on it.

PS. As many of you know, I am a consultant in the glass industry. I have never had any financial relation with Arch Aluminum or any of its companies. The above opinion is strictly my own.

Here is a little story that is appropriate(?) for this time of year.

John and Priscilla Hastings had a little glass shop in Plymouth, Massachusetts. They repaired broken picture frames, replaced IG, polished a few mirrors and repaired some screens. Their main goal in life was to plant a seed in their son, John Junior, to become a manager of their shop. One day, Priscilla sent Junior out to a job at 1620 Cranberry Lane, just off Pilgrim Highway. On the way out of Plymouth, Rock93, a local radio station had a contest: The ninth caller would win a long weekend on Cape Cod.

Junior didn't win.

He arrived at Sam and Mary Squanto's house at lunch time. As he was measuring the mirror to be replaced, Mary offered him a turkey sandwich. Junior, who stopped at Wendy's on the way, said he was stuffed, but was thankful for the offer. Mary then asked him if he would like a piece of pumpkin pie for desert. Junior was still full, so he asked if he could take a piece home for his family dinner. Just as Mary said, "You may", Flower, her cat jumped on the pie and left a permanent paw print in the last piece.

Junior left without his pie.

He fiddled on his radio, caught the baseball scores, where the Red Sox beat the Indians. It was the fourth Thursday in a row that the Red Sox won a game, but they were still out of the running for the fall classic. Junior was looking forward to football season anyway. Even though it's corny, Junior liked the tailgating and the feasts at the Patriot's games.

His next stop was at May and Mike Cees' house. The Cees had a hole in a screen, which Junior could fix right in his truck. It seems there was a parade of insects at May Cees' house, coming through the screen.

After he left the Cees' house, the sky started turning black. "Friday is a bad day for a thunderstorm", Junior thought. Since he didn't get his pie earlier, he stopped at the First Harvest Diner, for a piece of apple pie. He was working on a crossword puzzle, looking for a ten letter word meaning 'horn of plenty', when his cell phone rang. Priscilla wanted him to come home for a family dinner. He read the latest issue of US Glass Magazine at the table, spilling gravy all over it. Junior thought it was the best issue he ever made a mess of.

Since this is a short work week, this is a short blog. Stick a fork in it--it's done. Just in case you didn't catch it---Happy Thanksgiving.

First, Fire Frank Foreman

You have made up your mind to replace your plant foreman. You have thought about it for a year now, some days Frank Foreman is good, and some days he acts like a lump on a log. You talked it over with your partner and yes, you are going to do it. Done deal. You'll do it after the first of year and start with a clean slate.

'Ding Ding Ding Ding'. There is the 'you just made a mistake bell' ringing, and it is ringing loudly!

When you decide to replace someone, do it ASAP. Do not wait, do not pass go, and do not wait for some artificial calendar date.

Here's why...

You will transmit your feelings about Frank to him, and he will become an even worse employee. You will hope that maybe he will quit, saving you the confrontation of the firing, and maybe the unemployment insurance cost. Frank will begin to realize his days are numbered, and get even more stubborn about resigning, and will become more of a pain-in-the-tail.

Other employees will begin to feel this tension, and they will question why Frank is still in charge since he is behaving like a horse's behind. Your leadership will then be questioned.

Frank, will unexpectedly throw out his back, real soon, after he realizes what your are doing. His worker's comp payout will last a long time, and cost you much more than unemployment.

What follows is a true story. I had decided to release a customer service person at one of our plants. He was a gentleman about 50 years old. I was worried about age discrimination problems and I spent time figuring out the best way to fire him. To make a long story short, the day I was going to meet with him, he called in sick. Three days later he asked for a meeting with me. It seems he had been diagnosed with prostate cancer and needed a couple of months off for treatment. I couldn't fire him now. He remained on our books for five months because I waited. Sure this is a one in a million, but really, I terminated about twenty CSR's in my time, so this is a one-in-twenty.

Now if you do the termination as soon as you make up your mind here is what happens...

You will feel better. You will not have this hanging over your head for a long period of time. Your employees will give you a ticker-tape parade. By the time you realize Frank has to leave, your employees have known this for a while. They really are wondering what took you so long to see the writing on the wall. Sure you will be shorthanded for the time you look for Frank's replacement. If Frank was that bad, you won't feel his leaving, because he didn't do anything. Your employees will work harder knowing that they have to pitch in with Frank gone, and they will be glad to do it.

If you keep Frank on while you are looking for a replacement, the fact you are searching will get out. It always does. It always will. You will get caught in an embarrassing moment, guaranteed.

If you want to pay someone through a certain date, then do it in the form of severance. Every manager wants to be kind to their employees; if you plan on giving Frank extra money, do that; but your best kindness will be getting Frank out of the business so the other employees can get their jobs done!

How Much Is That Doggie In The Window?

You know her, the one with the waggily tail. If one of the world's most sung songs is about looking into a store front and hoping to be able to spend money, does that tell you something? You can make money helping people to make their storefronts more attractive to customers.

Joe's Baseball Card Shop calls you and wants information about putting in a new storefront that will give his business a more modern look, and get rid of all the water dripping on his cards displayed in the window. So you visit Joe and see a wooden framed front, with single glazed, clear, 1/4" annealed glass. He is on a busy street, with lots of foot traffic, being near a popular coffee shop. Joe is concerned with his energy costs, and of course, with the payback to your project. What are you going to tell him?

You think for a few minutes and maybe come up with the following: The frame should be thermally broken aluminum. Your choice of manufacturers and detail. Help Joe with this one...what color? Clear, bronze, or what? Well, baseball is most associated with green, for the grass it is played on. I would recommend a green front, which, would increase your sale too! Explain that the thermally broken front will save him energy dollars and help reduce condensation in the winter. Maybe, if the sizing is right, you make the opening shaped like home plate. This makes his front a direct ad for his business. Sounds corny, but so what...if you suggest it, the customer can always so "no". If you don't suggest it, you have no chance of the possible 'YES'.

Now for the glass--baseball cards are very sensitive to fading, so you definitely want a light of lami as the inboard lite on an IG Unit. Explain this to Joe and he will respect your knowledge of the technical side of glass, and help him solve a problem that he has, but didn't think to ask you about. Don't be afraid to up sell a little bit. Next, show Joe Starphire (tm) and clear float, and let Joe decide. Show Joe how much better his cards will look in low-iron glass. Either one can come with high-performance low-e.

You have solved Joe's moisture problem, his fading problem, which he didn't know could be fixed, and gave him a whole new look to draw in customers. It is a larger sale, but well worth the customer's interests...and Joe will thank you for suggesting ways to help his business.

Walk down the main shopping streets in your business area. You will find many retailers who need upgraded storefronts. Explain to them that this investment is needed now for them to improve their business. I know most businesses are not going to be spending money now, but what the heck; you're not busy anyway and all you need is one or two to say they are interested. You have to go out and drum up the business for your company. Don't wait for it to come to you.

PS. If Joe says he will pay you in baseball cards instead of cash, take it.

It's Time To Think About Christmas/Holiday Bonuses

Yep, it is that time already. How much can you give, to who, and most importantly why? If the why is "because you did it last year and the year before that," it is time to think twice. The rules of business have changed in the last twelve months. Companies are changing; if they are not, they are going out of business.

Giving a bonus should not be based on tradition, unless presented in an employee manual as part of yearly compensation, or as part of a negotiated contract. Deciding to give a bonus should be based on three factors:

1. Was the overall business successful. If the company lost money over the last twelve months, or had negative cash flow, it is hard to justify funds to cover bonuses.


2. Did the specific employee do his job as requested, or did she/he stand out from the crowd, doing more than expected.


3. Do you, as the owner/manager, feel strongly about giving a gift at this time of the year to some or all employees.

Let's look at one. If you made money, then by all means thank your employees. Thank them with your words, and your checkbook. A business that was profitable in the last year is indeed rare. Share with your employees as much as you can, for along with your leadership, they brought you to this profitable point.

On the other hand, if you lost money, or your cash flow is negative, it is time to consider not giving a bonus. Even though you have paid one for many years, this year is different; most employees know the economy has hurt business. Meet with your employees as early in the holiday schedule as you can, so they can predict their income and adjust their spending patterns. Any employee who vocally or publicly complains about no gift, is not a team player. Do what you may with this thought.

It is easy for me, sitting in my office to tell you not to pay a holiday bonus. Sure is. My only employee is my wife, Elaine. But, if you made little or no profit, you have to change the rules this year. Yes, it will hurt. But it will hurt less than going out of business in March when your cash is completely gone.

Tell your employees now there will be no bonus next month. Explain to them the facts of your business, and that you are equally upset as they are.

Make sure you didn't just buy a new truck or a car for yourself. Don't take a winter vacation this year either. Two weeks on a tropical island, even if it is your 25th anniversary blows all credibility you had. Don't take advantage of year-end planning by buying a ton of inventory.

Two. You have a couple of employees who worked their tails off, far and above what you would have expected. They were leaders and motivators of others and contributed heavily to holding the company together. You want to give them something to say thank you, and make a point of it to the others that those who worked hard will get a bonus. Sounds like a good idea....until you answer this question--"Do you have a valid employee review system that details the excellent work of some and the substandard work of others?" If not you really should not make this payment. Here is one possible scenario. The two great employees have green skin and brown hair, and the two weaker employees both happen to have blue skin with brown hair. Bet you a dollar to a donut, that the blue skin employees will file a discrimination complaint, and they will probably win. Even if they don't win, you will spend time and precious money defending what you thought was a nice gesture on your part.

If you still want to take care of your key people, understand that it will get out to the rest...it always does. The quietest way that I know is to give a VISA gift card, that the employee can use just as cash. Impress upon the employee not to mention this, and hope that works. At year-end, be sure to include the value of the card in their gross wages.

By far, the best system of giving bonuses is based on the actual work each employee does, not seniority. You will get a much bigger bank for the buck if you reward the people who deserve it. You MUST have an employee evaluation system in place to do this well, and to avoid problems. Start this now, so it is in place for next year. You will be well ahead of the game.

Have questions on employee review systems? Feel free to give me a phone call at 603-242-3521 and I will gladly answer your questions.

Three. If you want to give a gift at this time of the year, then do it. It is your money to distribute, and if it makes you feel good, then go ahead. Give it based on seniority, or equal amounts to various departments. Remember, if you give different amounts to similar employees, you should have a review program.