On the Road with USGlass

5 Bad Things about More Work

The contract glazing business is very busy right now; both projects and backlogs are up. But, as with most things, for every upside, there is a downside. Here’s a short list of five not-so-good things that usually come when contract glazing companies’ business is up and contract glaziers are busy. They are the five “Bad Ls” of a healthy contract glazing market:

Lengthy Leads: When business is good, lead times get longer. And, as the glass used in such projects is more performance-driven and less commodity-based, the number of manufacturers that supply it dwindles. So we are faced with an increased demand but no ability to provide increased supply. While higher prices are an expected and often anticipated result, longer lead times are the silent killer. When architects and owners hear of such lengthy lead times, they often switch to a lower value (less expensive, more readily available) product.

Labor Pains: You need installers, your competitors need installers, and you are both fighting for the same ones. Ditto project managers. Let the auction begin! No one can produce a job without labor, so this is the type of environment in which we see skilled labor changing jobs every six months, often for a small raise each time. Project managers become worth their weight in gold as well. Good companies hang onto their workers in bad times so that those workers hang on to them in good times. But it is hard to do so when your employees can auction themselves off to the highest bidders.

Late Fee Finagling: Here is where the general contractors (GCs) and owners get greedy. When times are good, there are more competitors, and general contractors know the contract glaziers are less likely to sweat certain details on their contracts. So the generals dive in for the kill. This year it seems they are concentrating on exacting a higher pound of flesh when jobs are not completed on time. I’ve recently heard of proposed late fees in the mid-five figures per day, something I’ve never seen before. Luckily, our industry has gotten smarter over the years and is much more cautious about late fees. It has to be. Contract glaziers are almost always one of the last trades on a job, and it’s really impossible for them to make up time lost by the others. The GCs seem to understand that during negotiation time, but their memory clouds as they point to the document you signed months later when the job can’t be done on time.

Liability: as with late fees, the Generals are working hard to get increased warranties. By increased warranty, I don’t necessarily mean an increased length of time, but rather increases in the scope and coverage that the warranties provide. Glazing contractors need to be extremely cautious as to what they agree to warrant in the documents they sign. When times are good, your customers will try and gain more from you because they think it won’t matter as much to you, or that you’re not paying as much attention to their ramifications.

Lightweights: You know what I mean. These are the guys who went out of business at the end of the last decade but are back now. Oh sure, they have different company names and the faces may have changed a little bit, but they still have one overriding quality: they don’t know what their true costs are. They take jobs too low thinking they can make it up on the volume or on the extras. And they are back because there is so much work out there that they can pick some up.  None of us likes having competitors, but all of us want ones who understand the business.

Okay, that’s my list. Don’t recoil in horror though, because the emergence of each of these issues underscores the reality that there is lots of work out there. And, that’s a good problem to have.