Bye Bye Pittsburgh

And now it’s done and the word is out. The deal that sells PPG’s glass business to Vitro has been inked and the details announced. All that waits is the blessing of the regulators and the official closing in a few months.

PPG gets $750 million dollars in cash and relief from a business it says is successful, but not strategically compatible with its future. Vitro gets a $1.1 billion business for a good bit less than that, a strengthened foot- and plant-print in North America and a robust and innovative research component.
Just two days after the deal was announced, editors Ellen Rogers, Nick St. Denis and I conducted an exclusive interview about the sale with PPG vice president of flat glass Dick Beuke. Beuke will be moving to Vitro with his team and his genuine excitement at the move showed through.

I can understand why. It was no secret that PPG’s glass business had been up for sale to the right buyer for quite some time. Those five, ten and 20-year plans that PPG is so proficient at developing are a bit challenging to create and execute when you don’t know who’ll own you next week. So I am sure Beuke is jazzed to see new resources sent to and attention devoted to his ship.

Beuke says his soon-to-be former company learned a few things in its sale of PPG Auto Glass a few years ago and knew how they wanted to do some things differently this time. “We knew we didn’t want a private equity deal and we did not want to retain an interest,” he said, also buoyed because Vitro has said it will maintain the benefits levels for current employees.

And PPG Glass might include both flat and auto again. “Vitro has an auto glass footprint in the United States and we have a lot of auto glass research experience, so we may be back in the auto glass business soon,” he said. “There are lots of possibilities.”

So as with every new marriage, this one is full of hope with details to be worked out later.

But the news of the sale was a heart-stopper for me and took me a few minutes to figure out why. To me, it felt like it might when you your parents are moving (or worse) are putting the old family homestead up for sale. You knew the day was coming; you thought you were prepared for it. You know rationally it’s the right thing to do, but you still greet it with a sense of melancholia.

Glass was the G in PPG. Glass was an original and legacy product for the company and it hurts a bit to see part of what made you great not considered “strategic” any more.

PPG so dominated the U.S. glass business at one point that some people don’t even use its name. I always get a kick out of hearing someone call the company just “Pittsburgh” and everyone knowing exactly what they mean, as in “Pittsburgh came through” or “I had to get on the phone with Pittsburgh.”

The management at Vitro is extremely smart and focused, and the company will most likely grow and prosper under its tutelage. But no one is ever going to start calling it “Monterrey.” And there’s something a bit sad and sweet about that. Best to all involved as they begin the process of “blending” their corporate families.