Self-driving cars may offer market niche for Pittsburgh Glass Works
March 20, 2017 12:00 AM
Pittsburgh Glass Works displays technology to heat windshield glass during an employee town hall and exhibit of products March 6 at the Rivertowne Brewing Hall of Fame at PNC Park on the North Shore. Pittsburgh Glass Works was recently acquired by Mexican glassmaker Vitro.
Joseph Stas, Pittsburgh Glass Works chief executive, left, and Adrian Sada Cueva, Vitro chief executive, attend the employee town hall and exhibit of products at PNC Park.
Bronze and blue window tints on display.
By Joyce Gannon / Pittsburgh Post-Gazette
Joseph Stas likes to see Uber’s self-driving vehicles cruising through traffic on Pittsburgh’s streets.
With nearly four decades of experience in the automotive industry, Mr. Stas, president and chief executive of Pittsburgh Glass Works, believes the cutting-edge cars are safe and fuel-efficient.
But they also provide what Mr. Stas said is an exciting market niche for PGW.
While the company is known mainly for the windshields, windows and sunroofs it makes for cars and trucks, the North Shore-based business also develops technical systems that can be used in self-driving vehicles.
For instance, it has designed technology that when integrated into windshield glass provides a way to mount cameras and sensors in self-driving cars.
“The windshield goes from something to keep the wind and rain out to a system component,” Mr. Stas said. “We’re somewhat behind the scenes, but we’re helping to support the technology.”
The company also designs technology to integrate smart communication and antenna connections into windshield glass; and its lightweight glass options benefit self-driving vehicles with better fuel efficiency, Mr. Stas said.
Since its acquisition March 1 by Mexican glass giant Vitro S.A.B. de C.V., PGW should be better positioned to expand its technical and engineering capabilities for self-driving cars, he said.
“We have a base of technology, but now we’ll be reunited with a world-class research center.”
The center Mr. Stas referred to is Vitro’s glass research and development center in Harmar. Like PGW, that business unit was once owned by longtime Pittsburgh corporate giant PPG.
Vitro acquired PPG’s flat glass business — which makes glass for residential windows and commercial buildings — in October for $750 million. The deal included the Harmar R&D center where Pittsburgh Glass Works already leases space for a dozen engineers and where it hopes to tap more technical expertise going forward.
Although PPG got its start in the 1880s as Pittsburgh Plate Glass when it began making glass in facilities along the Allegheny River north of Pittsburgh, in recent decades the company shed its traditional glass and chemicals businesses to focus on becoming a leading global paints and coatings producer.
In 2008, it sold its majority share in its auto glass unit to private equity firm Kohlberg & Co. and the business was renamed Pittsburgh Glass Works. PPG sold its remaining 40 percent stake in PGW last April when the company was acquired by Chicago auto parts distributor LKQ.
Vitro had been interested in PGW for some time, Mr. Stas said, “because they knew the potential value.”
So the Mexican company approached LKQ and ended up buying PGW’s original equipment manufacturing business for $310 million. Terms of the deal call for Pittsburgh Glass Works to continue supplying LKQ’s aftermarket business with PGW products.
About 4,500 PGW employees are now part of Vitro, including 100 at the company’s North Shore headquarters.
The deal also included plants in East Deer, which employs about 200; Tipton, Blair County, which employs about 400; and Meadville, Crawford County, with about 250 workers.
Another 50 engineers work at the East Deer facility and PGW also operates plants in Indiana, Ohio, Michigan, Kentucky and North Carolina; a plant in Poland; and joint ventures in China and Mexico.
Prior to the acquisition, PGW’s sales, including its after-market business which LKQ retained, were about $1 billion.
A business in trouble
Under Vitro, Mr. Stas will run the parent company’s auto glass business and expand his responsibilities to existing Vitro plants in South America.
Pittsburgh Glass Works’ largest customers are GM, Ford Motor and Germany-based Daimler AG. PGW’s engineers and sales teams meet with them frequently and with other vehicle makers about technology they’d like to see developed for future models — including electric and self-driving cars, Mr. Stas said.
He has personally been in discussions with Ford officials about self-driving components. Those talks were not directly related to Ford’s recent announcement that it will invest $1 million in a company that will be based in Pittsburgh and will develop a virtual driver system for self-driving vehicles.
“We talked about what we have for autonomous driving,” Mr. Stas said. “Ford has a highly innovative and engineered approach.”
While the future of PGW looks promising now, he recalled bleak times leading up to the Great Recession and the sale of the business.
PGW was having trouble securing new contracts and by 2009, major customers Chrysler and GM had filed for bankruptcy.
“Quite literally, I was not sure we would survive,” Mr. Stas said.
But private investor Kohlberg “provided the capital we needed to invest in products and processes to be competitive.
“We’ve gone from being somewhat of an orphan with PPG and losing market share to now being competitive and growing.”
Mr. Stas, 60, grew up on a farm in Latrobe before earning dual bachelor’s degrees in business administration and mechanical engineering from Carnegie Mellon University. He later obtained a master’s in business from the University of Pittsburgh.
He launched his career at PPG’s Greensburg glass plant right after graduating from CMU and the following year was tapped to oversee the opening of a plant in Evansville, Ind.
He returned to the Pittsburgh area when the East Deer plant was modernized in the mid-1980s and later did stints with PPG in Paris and at its Meadville glass plant.
The best part of moving around to different glass manufacturing operations, he said, was “getting to know all the people.”
But those relationships weighed on him when PPG sold a majority of the company to Kohlberg. “That kept me awake at night,” said Mr. Stas, who at the time was PPG’s vice president of auto glass.
“[PPG] made a strategic decision to be primarily in coatings. Although I was not so certain at the time, the spinoff was probably the best thing that happened to us” because majority owner Kohlberg invested in technology and hired people with advanced engineering skills.
“In hindsight, it brought in a lot of fresh, diverse thinking,” he acknowledged.
Among the corporate memorabilia on display in the entrance way of PGW’s offices is a framed black-and-white photo taken in 1887 of workers at PPG’s original glass plant in East Deer. Now that plant fabricates windshields for PGW.
“We combined the legacy of two glass companies each over 100 years old,” Mr. Stas said of PGW and Vitro.
While the Vitro deal provides PGW with “operational excellence and global strategies,” he said, “we are still Pittsburgh-based … and with Uber here and the Ford investment, it makes our location good.”
Joyce Gannon: firstname.lastname@example.org or 412-263-1580.
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