Window and Door Makers Still Spending on Equipment

Eventual market recovery, demand for triple glazing and continued efforts to reduce labor will spur more investments, suppliers predict
John G. Swanson
June 1, 2008

Back in 2005 and 2006, window and door manufacturers were investing in new equipment and plants to expand capacity as the housing market boomed. With the housing bust of 2007 and 2008, things changed. Suppliers report that investments in new equipment are now down dramatically, but they also point out that spending has not come to a halt.

Manufacturers continue to replace machines and upgrade lines, and product line changes are driving re-tooling efforts. Looking longer term, most equipment suppliers expect window and door manufacturers to begin investing more again too, with at least one eye looking to pending changes in the Energy Star windows criteria.

Investments in new production capacity are down, but many manufacturers are re-tooling equipment to accomodate new product lines.

"It's tough out there," says Ron Auletta, president of GED Integrated Solutions. "When you see a decline in housing starts from something like 2.3 million units a year to 850,000, that's a huge drop. It affects the whole supply chain-all the way down to window and door manufacturers and equipment suppliers." "We're hearing a lot of doom and gloom out there," adds Ellis Dillen, VP of operations for Sturtz Machinery Inc.

There's been a definite slowdown in equipment orders coming from the United States, reports Volker Lamprecht, president of Urban Machinery's North American operations. Canada remains a healthier market, he notes, especially Western Canada and the Maritimes. He also points to activity in a few local markets, such as the Carolinas and Florida.Where companies are adding new tilt/turn production lines, as they see an uptick in interest in those products, particularly in impact markets.

"We are still seeing some investments in new production lines," notes Dillen as well. "Obviously, this is not the bulk of business right now. Single machines for specific needs are more common at the moment."

"Most of the work these days involves modification and re-tooling of existing machinery," reports Marc Chinapen, VP of sales for Pro-Line Automation Systems. He sees a lot of equipment geared toward new construction products being shifted over to remodeling and replacement windows. Other suppliers also agree that window and door product line changes are leading manufacturers to re-tool existing machines. "People are switching systems and they're looking to improve features to gain market share," says Sturtz's Dillen. "We're seeing a lot of re-tooling going on."

Although it hasn't translated into a lot of investment in new equipment yet, one particular feature that's generating some discussion is triple-glazing. "Many customers want to get a jump on new codes coming and the more stringent requirements to come in Energy Star," reports Larry Johnson, executive vice president for Edgetech I.G. "We are getting more questions on different glass package performance. We have customers that want to meet codes without argon." As manufacturers start to look at triple-glazing to offer even lower U-factors to meet new Energy Star criteria, he predicts automated IG production, and the enhanced quality control levels it offers, will become more critical. "We already have a number of manufacturers doing it. One concern is spacer match-up between the two airspaces." That's best achieved with automated machines, which offer consistent spacer application, he notes.

The consistency offered by automated equipment is also important, Johnson points out, because the typical triple-lite unit, with two sets of edge seals, has "four paths to failure," as opposed to two in a normal IG unit.

With Energy Star becoming more stringent, manufacturers see triples as a growing trend, agrees Kevin Zuege, director of technical services for Truseal Technologies. "Some customers now see it accounting for 5 percent or less of their production, in a lot of cases zero. Looking ahead they see it growing to about 15 percent. That's a big number, especially when you have to fit it into your production schedule."

In the insulating glass equipment arena, some manufacturers are expected to gear up for increased production of triple-lite glazing with more stringent Energy Star criteria coming down the pike.

While the consistency offered by automated machines is important, he also sees a real challenge in keeping up productivity levels. Triples, with the application of two sets of spacers, can double a manufacturer's cycle time, he notes. "The real challenge is to try to get it done without doubling your cycle time," he continues, and, as a result, he expects growing demand for triple-glazing will lead numerous companies to invest in new equipment eventually.

Auletta is less convinced that changes to Energy Star criteria will produce major shifts in production. "DOE wants to set such a lofty goal that people are not going to want to pay for it," he suggests. "There are customers that will want the most energy efficient products available and they may be willing to pay twice as much as they would for a regular window, but I can't imagine it will be a huge part of the market." Companies will continue to offer product lines that are Energy Star qualified, but it will be a relatively low volume product for most, he suspects.

Still, other suppliers report manufacturers are already talking about Energy Star and what new criteria could mean. "They're already sending drawings," reports Urban's Lamprecht. He notes that for many companies looking at triple glazing, that change will require a change in their vinyl window profiles to support the added weight. "That will definitely spark some business for us when that happens."

"We're working on improvements, because we expect demand to be strong in this arena," says Edgetech's Johnson. "It's definitely the way people are going to go."

For the short term, most equipment suppliers see manufacturers taking steps to enhance their products and their processes in smaller ways. There are not a lot of companies adding new lines or capacity, but that hasn't stopped all efforts to improve production efficiency, reports Ed Kelly, VP of operations for Joseph Machine Co. "We're seeing a lot of smaller orders for us. We see companies that have been very busy, going back and looking at their lines, and taking this opportunity to try and get them back to where they should be. That means replacing or upgrading individual machines. It makes sense to take the time now to do a lot of that work."

"Some people look at (the current market) as a disaster and say they're not going to spend anything on their facilities," says Zuege. "Others, however, look at the situation and see if there are still opportunities where they can take costs out and maybe improve features."

"Solutions that improve both product and process, as well as potentially save money, are of ongoing interest to manufacturers," says Todd Romanski of Nordson Corp. As an example, he points to significant interest in a foam-in-place gasketing process his company has brought over from the automotive and appliance industries that provides a cost-effective new alternative for window and door production.

"In a tight market, companies need a point of differentiation," notes Johnson. High-performance warm-edge systems offer that benefit. "When you combine the need for automation and high performance, it has continued to keep demand strong for automated IG lines. That's kept our business, and interest in new machines, fairly strong."

He even sees the green building movement encouraging more automation. "We're hearing more questions related to sustainability. How long should a 'true green' or a sustainable product last? 20 years? 30 years? 40 years? That's driving demand for the durable system with dual seals. That's driving demand for the quality that comes with automation."

Even as workers have become easier to find in a weaker economy, reducing labor requirements remain an important goal, most of these suppliers agree. There are markets where workers are still in short supply, like Western Canada, reports Pro-Line's Chinapen, but he sees manufacturers investing in machines to reduce labor requirements everywhere. "The real trend for manufacturers is to get automation because they'd rather operate with fewer, more skilled people," he says.

GED reports strong interest in its new loading system for vinyl welders, and expects anufacturers will be eager to invest in new technologies as the window market begins to recover.

And manufacturers are willing to spend now on machines that can help them on the labor front, reports Dillen. "They may have a line with two or three people; they want to get down to one or two. They realize a single-point welder and hand cleaning is just not going to cut it, and they'll make that kind of investment."

"We used to estimate that a company had to produce about 300,000 IG units a year to support full automation," says Zuege. "That number is falling, even as the market is down." Companies making 300 or 400 units a day will now buy automated equipment, he continues. "The primary driver is not so much the labor cost, but labor stability." Companies are finding they can do better operating a line with a few good people-that they're willing to pay more-than a larger pool of unskilled workers, that could potentially cost less. "When you have more workers, things are more unstable. It's hard to keep eight or nine positions filled. There's turnover and you have people miss work. It's not so much dollar savings but the reliability factor. And it's the enhanced quality control too."

Urban's Lamprecht points to another area where he expects manufacturers to invest more in the future to reduce their labor costs. "The big companies invested big in recent years. They have the capacity," he notes. "But they still are looking long term for more efficiency. Companies are looking at what else they can do to reduce labor, so we continue to see a lot of interest in specialty machines for assembly. There's some planning for 2009 and beyond."

Assembly still holds vast potential for improvement, he continues. In most companies, it's a lot of vertical racks and people, Lamprecht says. Bringing automation has been a challenge because there's not a lot of commonality in the profiles and hardware, like there is in Europe. "We've talked to customers with six different screw sizes for their hardware and four different paint colors on the screws. That translates into 24 screw feeders. You just can't justify that sort of thing."

Although there needs to be changes in the hardware and the extrusions to make final assembly more automation friendly, Lamprecht expects progress on this front. "We're working with a couple of manufacturers that extrude their own vinyl, but we're still a few years away," he admits. Still, the company has been successful with its casement equipment, and he predicts tremendous demand once this type of machinery becomes more feasible for slider and hung window production.

Lamprecht is also confident that the industry will be back in investment mode in general. Hinting at new technologies on the horizon, he suggests that continuing opportunities in the window and door market and ongoing challenges faced by manufacturers will assure demand for equipment that offers higher productivity and efficiency.

Although he isn't sure when it will happen, window and door manufacturers will become more aggressive in general once they "see the bottom," Joseph's Kelly predicts. "Once we clear that, I think you'll see a lot of new product development. I don't think companies have shelved all that activity. As soon as they see an end, I think many will make a quick jump to get back in gear." A number of manufacturers have products and lines that they know could use a facelift or upgrade and that once the overall market is on the upswing, "they'll be moving to do that," he concludes.

"We're doing a lot of listening now," concludes GED's Auletta. "And what we're hearing is that manufacturers' first priority is bringing costs down." In the short term, he expects fairly weak demand for new machines, but manufacturers know they can't get by without reducing labor and producing windows more efficiently. He's not certain when they will "pull the trigger," but "it will happen," he says. "Our customers are smart people. They're shopping around and continuing to seek out new technology." As an example, Auletta points to strong interest in the company's new SmartWeld loader, in which the operator pre-loads profiles while the welding process is taking place, providing significantly reduced cycle times. "The market will come out of this," he predicts, "and there will be demand."

"People are taking time while things are slow to refine their product offerings, improve on existing products and add new products to their offerings. The natural progression will be for new equipment to produce these products," says Dillen. "The feeling is that the market will rebound and when it does, they want to be ready."