Industry Reacts to Arch Aluminum Bankruptcy
November 30, 2009
Representatives of the glass and metal industries have had a solemn
reaction to this morning's news that Arch Aluminum & Glass Co.
Inc. of Tamarac, Fla., has filed for Chapter 11 bankruptcy.
"It is a sad day in our industry when you see a company as
large as Arch fall and I think there are a lot of lessons to be
learned from this," commented Bob Price of J.E. Berkowitz.
"2009 has not been the best year and I expect 2010 to be worse;
I do not expect to see consolidation in 2010, but probably some
failures," said Price.
Other sources agree that the slow commercial market has had a huge
impact on the glass and metal industry.
"We're the last to go into the downturn and the last to come
out and I think in many ways the commercial industry is just going
into a downturn and I expect 2010 and probably 2011 to remain slow,"
said one industry source who asked to remain anonymous. "Companies
that grew rapidly or were heavily capitalized, such as Arch, will
be challenged because there's just not enough work [to sustain them].
I expect we will see further consolidation in the industry, much
like we did from 1989-1993 when there were eight or nine companies
that went out of business. So for a company the size of Arch to
file for bankruptcy it's pretty significant for our industry and
a big wake up call that we are not out of the woods yet."
Another industry source, who also asked to not be identified, was
not as sympathetic as others.
"I read with interest at first, then with empathy, and my
emotion then turned to disgust as the news came out in dribs and
drabs this morning. The icing on the cake was the company's own
statement about being acquired and saying that they will come out
a 'stronger company;' I didn't miss the 'significantly less debt'
part either. It was GM all over again, only this time not at the
direct expense of the taxpayers but rather, the creditors and the
families employed by all of those companies that will be negatively
impacted by poor management at Arch. This is another episode in
the mergers and acquisitions lifestyle of the company and I can
only hope that this time customers and future 'creditors in waiting'
can see this for what it is--a back room mugging of the industry.
After this episode I sincerely hope that the market will reward
those companies who have a demonstrated history of stable business
practice and financial stability."
Arch listed among the creditors of its largest claims Pilkington,
Guardian and PPG. CLICK
HERE for related story.
USGNN.com contacted several of the creditors holding Arch's
biggest claims, but they declined or were unavailable to comment
at this time.
Arch chief executive officer Leon Silverstein told USGNN.com
in an exclusive interview this morning, "We are in the process
of selling the assets and we will be out of bankruptcy in 45 days."
Silverstein added, "We are going to emerge with 75 percent
less debt. We did this because we had to do so to restructure our
HERE for related story.
HERE to read Arch's statement on filing Chapter 11.
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