USA: summit on future of New Jersey glass sector

New Jersey glassmakers met at their first-ever summit on 6 April 2005 and top of the agenda was the push for a closer relationship between the state glass industry and government to tackle the difficu…

New Jersey glassmakers met at their first-ever summit on 6 April 2005 and top of the agenda was the push for a closer relationship between the state glass industry and government to tackle the difficulties which the sector faces. “It“s true that our labor costs are 15 times higher than Asia, but we can still provide value to our customers, and it is the purpose of government to make that possible,” said Peter Leone, the president of Bridgeton-based Leone Industries, which makes food jars. The industry has seen a continual decline during the past 25 years, as shown by a 50% fall in employment to 8,000. The half-day Trenton symposium on 6 April 2005 was organized by Rowan University, which in 2002 helped create the New Jersey Glass Industry Collaboration to try to turn back the tide of decline. Foreign competition is blamed for the decline of the sector: “Global pressures show up on the local level,” explained Dennis Courtney, president of scientific glassmaker Andrews Glass in Vineland. He said cheaper-commodity glass from Asia puts pressure on the prices charged for specialty glass products make in New Jersey. Manufacturing costs in New Jersey are too high for it to compete profitably on low-value-commodity glass such as beverage bottles, so future growth is expected to come from high-tech glass products. The move is already well advanced: Half the USD 300 million US market for scientific glass comes from New Jersey, according to Barry Kramer, executive director of the Management Institute at Rowan. However, efforts to stabilize and expand glassmaking are hindered by the escalating energy and insurance costs. In addition, with nearly one-quarter of the current workforce soon to retire, firms must start replacing key workers. The summit brought together a half-dozen important glassmakers who chose to put rivalry aside to work together for their mutual survival. Among them was Alcan Packaging of Millville, which has 500 New Jersey employees and makes glass tubing and vials for the pharmaceutical industry. “Our business is healthy and profitable, but sales are growing slowly, about 2% to 3% a year,” said Richard Calabro, vice president of the company. “We need training programs, so we maintain a skilled work force, and any legislation that would help us with energy costs – such as a tax reduction on energy purchases – would help. Environmental regulation is a major expense, and our health insurance costs are rising 15% to 20% a year.” State Senator Nicholas Asselta (Republican, Cumberland) said manufacturers in urban enterprise zones already received a significant sales-tax break on energy purchases: “There are companies saving USD 50,000 a month on their energy bills, and that is very significant.” He has proposed legislation to extend that tax break to more plants. New Jersey provides millions of dollars in grants for companies that need to retrain workers, “and we will make sure the money will be there to grow that program,” Asselta added. Courtney said, “One aspect of having an agile work force is to show that we are adding value in order to keep the profit margins we need to pay good wages and develop skills.” The high-tech, high-valued-added nature of modern New Jersey glassmaking shows clearly through the statistics, said Donald Farish, president of Rowan. In 2001, the industry spent USD 286.8 million on material costs and added USD 570 million in value through the manufacturing process. The value of products shipped was USD 880 million in 2001, up from USD 867 million in 1999. State Commerce Secretary Virginia Bauer said the state can provide training grants and other incentives to the industry, and encourage partnerships between glassmakers and the state“s pharmaceutical and biotech industries. “The industry has a highly skilled work force, and we need to have a dialogue with the pharmaceutical industry to look for specialized products that are unique and that they need,” she said. Farish advocated supporting the glass industry “because it is emblematic of what has been going on in manufacturing in general.”