Catching Up with Quanex: From Shortages to SurgesSeptember 22nd, 2020 by Tara Taffera
With the fall trade show season comes a chance to catch up with suppliers regarding the state of the industry, and although these shows moved to online venues, that didn’t stop those conversations from happening. Tara Taffera, editorial director for USGlass and Door and Window Market [DWM] magazines, talked virtually last week with Erin Johnson, director of marketing, Larry Johnson, vice president sales, North America, fenestration and Joe Erb, commercial sales specialist for Quanex Building Products, about the state of the industry—and their thoughts line up with what others are reporting.
In fact, in a live session held during GlassCon Global VE-Glass Expo VE , members of the door and window industry talked about everything from glass and employee shortages to huge product backlogs—all of which Quanex is seeing bear out as well.
Taffera: Larry, why don’t you start by giving me an update on the state of the residential fenestration industry and what you are seeing at Quanex?
Larry Johnson: There is a great increase in business across the board. We have a COVID call every Tuesday and we learn where the hotspots are with our customers—the areas of the country that still haven’t opened back up like California. And we heard of one large customer who is down 1,300 employees and has a backlog of 50,000 windows. We also heard there will be a shortage of wood [due to wildfires] which will cause problems for things like extension jambs that are already sold out. We are hearing about shortages in glass as well.
We are seeing a huge demand in automation. It makes sense because this can take the amount of people to run a machine from seven to nine to between one and three, for example. We hired 12 people … but then lost 14.
Taffera: Are you losing people due to the Paycheck Protection Program and the fact that workers can make the same amount staying home?
Larry Johnson: That’s the majority of it, yes. The labor issue is paramount. We have all this demand—even for things that customers can install themselves like storm doors. And housing starts are up so there is all this backlog. Supply is going to be tough as the industry is still being affected by what’s going on in the Gulf Coast. There are issues with hardware coming from overseas as well.
Joe Erb: Almost everything that Larry is seeing on the residential side is also happening in architectural. We have the same labor challenges—we hire 19 and 19 are gone–it’s a constant revolving door. We are seeing a demand for high-performance glazing, as well as a bit of competition for bids with the larger fabricators. If that continues, the smaller guys may be racing to the bottom. And even though we are seeing a lot of bidding happening, the decisions are getting pushed out further. Most everyone is optimistic for 2020, but on the architectural side, 2021 is a little less certain than in residential as there are a lot of things that can have an effect [election year, COVID].
I can’t say enough about how much automation is growing. It makes so much sense for companies to be moving this way. To be ahead of this will position your company so much better, as the labor challenge won’t go away in the near future. We are seeing so much activity in purchases of robotic and handling equipment, IG—anything that reduces the touchpoints.
Erin Johnson: One of the reasons we may be seeing a push for this more in the U.S. is because companies want to make sure they can get their machines serviced—we have seen that be an issue with some companies who have European equipment.
Joe Erb: I agree and we will see that trend with hardware as well. It’s great if you get a good price, but it doesn’t matter if your container doesn’t show up. This is nothing to knock on international suppliers, but in a pandemic when different countries are facing different challenges it makes us realize the importance of U.S. sourcing.
Larry Johnson: I agree as well—we have a cabinet division and companies who wouldn’t even talk to us before are now wanting product without asking for a quote.