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U.S. Glass Industry Looks to Domestic Policy, Innovation to Beat Global Competition

Feb/Mar 10
The Area Development Frontline series offers insight into the innovative strategy being taken by businesses that are succeeding, intelligence on locations that are deploying winning policy to attract investment and talent, and reports on the industry trends that are affecting and shaping the global business climate now and into the future.
Like many U.S. industries, glassmakers are facing threats from China. Even the bottom floors of the new 1 World Trade Center in Manhattan will don Chinese glass. It's a sign of the times, and the glassmakers are calling on Washington to help halt the growing fracture in this important U.S. industry by raising tariffs on imported glass.

Consider the decline: Glass industry employment has dipped 30 percent over the last nine years to 95,000, according to the United Steelworkers. From 2001 to 2008, the U.S. glass industry lost almost 40,000 jobs, estimates the U.S. Department of Labor. The recession is further damaging the U.S. glass industry, as automobile manufacturers and homebuilders consume less glass in the face of slowing business.

By contrast, glass production in China has increased by more than $576 million - more than 67 percent - since 2003, according to a recent study by Dr. Usha Haley of Harvard University. In fact, new production capacity in the glass industry of China in 2007 was nearly six times greater than that of 2003. The Chinese glass industry saw a threefold increase in exports to the United States from 2000 to 2008. The U.S. trade deficit with China on glass also tripled in the same period.

"The story of the glass industry in China and in the U.S. is a familiar one that could have an especially sad ending for many U.S. workers unless China can be persuaded to remove its thumb from the scale," says EPI (Economic Policy Institute) Senior International Economist Robert Scott. "Until this subsidy problem is addressed and fair competition can be restored, U.S. glass manufacturers will face continuing pressures to downsize or close plants."

But there are opportunities emerging in a revitalized construction market and the solar panel industry. These alone aren't enough to save jobs and reverse the balance sheets of U.S glassmakers, but they could mark a turning point that, along with increased tariffs, may keep the industry from shattering.
McGraw Hill Construction predicts total residential construction will rise 11 percent in 2010 - thanks, in part, to a 32 percent increase in single-family home construction starts. "The State of the Nation's Housing 2009," a research report issued by the Joint Center for Housing Studies of Harvard University, predicts that once new home sales rebound and the economy begins to pick up, the aging of the echo-boomers (children of the baby-boomers) - the largest generation to reach adulthood in the nation's history - should reinvigorate the housing market.

Scott Paul, executive director of the Alliance for American Manufacturing, says the U.S. glass industry is investing heavily in innovation in products like triple-pane, high-performance, low-E, and other blended types of glass as it fights to maintain market share and grow U.S. production. He points to the solar panel manufacturing industry as one potential savior. Indeed, leaders in the solar industry, including the Solar Energy Industries Association, point to the potential of solar energy to meet 15 percent of U.S. energy needs by 2020. Twelve percent would come from solar electric power generated by photovoltaic solar panels and concentrating solar power plants. And those require glass.

"The U.S. glass industry faces difficult odds right now. It's difficult for American companies to compete against the policies of other governments," Paul says. "But overall, especially in some high-tech applications of glass and heavier glass that need to be manufactured closer to market, there are still opportunities for U.S.-based companies. There is reason for optimism, especially if we can drive a more proactive set of public policies to support manufacturing in this country."

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