Echo Windows Ceases Operations; Gillman, Plant Manager and Others Speak Out

Echo Windows LLC, a window manufacturer based in Red Oak, Iowa, ceased its operations yesterday. Echo, owned by former Republic Windows owner Richard Gillman, purchased the plant in early December from TRACO. (CLICK HERE for DWM's coverage of that story.)

The closing of the plant results in the loss of all jobs for a 100-person workforce, according to a press release issued by Echo. The release attributes the closing in part to the media coverage of the Republic story.

"We had hoped that, with the support of new investors, Echo Windows LLC would have the ability to serve niches of customers needing good products manufactured in the Midwest," Gillman says. "However, the labor strife, continuous labor media stories and accusations, which accompanied the closing of the Chicago company, added to the difficulties in a troubled economy. The ongoing attacks closed our access to additional investment and, in all likelihood, made nervous customers hesitant to engage in business contracts with us."

Gillman told DWM magazine that, at the time of the purchase, "we knew the economic climate was tough but we were optimistic about our plans for serving the healthy parts with good products. What we didn't plan on was what we noted in our announcement of the closing.

"We are sad that the inability to make the company succeed represents a loss for more than 100 workers and their families, and investors who held great hope for this enterprise," adds Gillman in the press release issued by the company.

He further told DWM magazine, "This is a great industry and has opportunities. I recommend that manufacturers remember that Red Oak, Iowa, has a fine group of skilled, hardworking people ready to help."

When DWM magazine asked Gillman about his plans for the future he said, "I'm not sure but I am likely to accept some of the invitations to speak about the events and experiences during efforts to make the companies succeed in very challenging conditions."

Meanwhile in Red Oak, Iowa, plant manager Dwayne Adams says he was surprised by the decision to close, though he was aware it was a possibility.

"The management team knew for seven days that it wasn't looking good," says Adams. "We tried to put a deal together with myself and the five other managers here but something like that usually takes six months and we just couldn't do it in time and came up short."

He adds that he received word via e-mail on Sunday from Gillman that the plant would close.

"Anyone in the industry knows that you can't make or break a plant in 90 days," says Adams. (The new ownership took over in early December.)

However, Adams says that the plant had a backlog of orders so a shortage or orders wasn't the problem here. He adds that Gillman wasn't paying the bills besides payroll and health insurance.

Adams also says that when Gillman took over ownership he assured all employees that they would keep their severance, etc. "All that is gone," he says. "Many of the employees have been here for the 14 years since the facility has been opened."

Despite all this, there may be some hope to which Adams can hold.

"There is an investor that gave me a glimmer of light to put Gillman and the Republic scenario out of the picture," he says, not wanting to give further details.

When the Republic facility closed, some dealers moved their business directly to Echo Windows including Window and Door Resource in Maple Plain, Minn. When DWM called the company's Steve Kundo to find out where the company would move its business now he hadn't heard the news that Echo closed.

Regarding the fact that dealers such as Kundo weren't notified Adams says he wasn't surprised.

"He [Gillman] was trying to make an exit and make it fast," says Adams.

He adds, however, that dealers who switched from Republic to Echo all had positive feedback regarding the transition.

"They commented on the quality of the product we produced here," he says.

But now that Echo Windows is closed dealers like Kundo have to find a new supplier. Dealers could move their business back to Republic if the sale of the Chicago facility goes through. Kevin Surace, president of Serious Materials, says the company is still working toward the purchase of the Republic facility.

"I see no reason why they [Republic dealers] wouldn't consider coming back," says Surace.

However, there is still much work to be done until the facility may be reopened under new ownership.

A hearing will be held today and approval may be given as early as Wednesday, February 25, but Surace says there are then lease negotiations and union negotiations to work through, among other issues.

"There is stuff in that facility that doesn't work anymore," says Surace, referring to the abrupt closing of the Republic plant.

But he says there is good news that lies ahead, particularly in the economic stimulus package signed last week, which, Surace says, sets a new bar for energy-efficient windows. With the stimulus package, to qualify for the rebate, windows must have an R-value of 3.3 or higher and a solar heat gain of .3 or better. "Most don't make that," says Surace. "This presents a tremendous opportunity for homeowners as rebates will pay for 30 percent of their window purchases."

He says it also presents a unique opportunity to window manufacturers who produce high R-value windows. "But this isn't in favor of those who produce commodity products," he adds.

He says this translates to commercial projects as well. "There is a commercial bill that gives tax breaks to those who replace glass with high R-value glass," says Surace.

Surace says the company plans to produce both commercial and residential units at the Chicago plant.

Need more info and analysis about the issues?
CLICK HERE to subscribe to DWM magazine.