Talk About a Window of Opportunity

In December 2008, when 260 members of United Electrical, Radio and Machine Workers of America Local 1110 lost their jobs at Republic Windows and Doors, workers mounted a quiet but exceptionally effective resistance. Scores of them, working in shifts, calmly occupied the Chicago-based manufacturer for six days, asserting that they had the right under law to receive vacation and severance benefits.

The peaceful protest drew international media attention and the support of Barack Obama, a Chicago resident who just two weeks earlier had been elected president on a promise to leverage energy efficiency and clean energy development to rebuild the economy and the middle class.

It also attracted the interest of Kevin Surace, the chief executive officer of Serious Materials, a Sunnyvale, California-based manufacturer of ultra energy efficient windows. Surace was busy scrubbing the country for window manufacturing plants to buy, anticipating that the new administration and Congress would enact a big economic stimulus bill that included considerable investment in weatherization and energy efficiency.

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Surace wasn’t disappointed. On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act, which included $34 billion in appropriations for energy efficiency. Two weeks later, Surace reached agreement with the plant’s former owner and with United Electrical Workers and purchased the Chicago factory. He also committed to honoring the union contract, which pays an average $14.11 an hour plus benefits, and to eventually rehiring all of the plant’s union workers.

In short, an event that first appeared as a new twist in the all too familiar tale of hard times in American manufacturing has evolved into a much more satisfying narrative. “These workers will not only earn a paycheck again” said Vice President Joe Biden on the day that Serious Materials announced the sale, “they will go back to work creating products that will benefit America’s long-term economic future.”

Buying Clean Energy Opportunity
Plainly, Serious Materials sees a big market for its products.  If ever there was an example of a clean energy manufacturer seizing the golden ring of opportunity from the angry jaws of crisis it’s this clean energy company. Despite the worst economic downturn in almost 80 years Serious Materials is on a buying spree in the United States.

In June 2008, as the American economy began to wobble on the shaky foundation of soaring energy prices and dropping home values, Serious Materials purchased Alpen Windows, a Boulder, Colorado manufacturer and market leader in high-performance, energy-efficient windows and glass.

In January, 2009, as economic fundamentals pitched downward, Serious bought Kensington Windows in Vandergrift, Pennsylvania (see video). Kensington’s plant there had closed in October, putting 150 people out of work after Kensington’s parent declared bankruptcy.

Lying behind these purchases is not industrial altruism, though Serious Materials has earned a number of state and national awards for its culture stressing fairness, sustainability, and environmental sensitivity. Rather, the guiding principle is a chance to leverage energy efficiency to open new markets in the retail, housing, and office construction industries for retrofits and weatherization.

Effects of the Recovery Act
All of these markets are expected to rapidly revive following passage of the clean energy provisions of the Recovery Act, which are designed to significantly upgrade existing buildings and encourage new ones to be much stingier in their use of energy. Good windows, like those now manufactured by Serious Materials, play a big part in improving energy efficiency.

“We see a big opportunity as a result of the Recovery Act,” said Sandra Vaughan, chief marketing officer for Serious Materials.  “We are very focused on the U.S. market. We are focused on building good green American jobs to serve that market.”

Serious Materials currently employs about 200 people at its headquarters and manufacturing plant in Sunnyvale, and at its three other manufacturing plants in Newark (CA), Colorado, and Pennsylvania. Vaughan says the number of employees, who earn wages comparable to the prevailing manufacturing wage in their regions, plus health and retirement benefits, is expected to steadily increase.

Since January, Serious Materials has installed new equipment to make super-insulating windows and commercial glass at its Vandergrift plant. On March 16, 2009, Pennsylvania Governor Ed Rendell was the honored guest at a ribbon cutting ceremony marking the plant’s formal reopening. On March 24, President Obama remarked in a nationally televised news conference that he’d “met with a man whose company is reopening a factory outside of Pittsburgh that’s rehiring workers to build some of the most energy-efficient windows in the world.” Marketing Officer Vaughan said 25 workers have been rehired and more will return to the plant as sales pick up, and “we’re ramping up to 100 as quickly as possible. That is our goal.”

Update:  In January 2010, Serious Materials was approved for a $548,000 Advanced Energy Manufacturing tax credit to support the manufacture of highly insulating, high performance fiberglass windows at its Chicago plant.  The Advanced Energy Manufacturing tax credit program, also known as 48c for its place in the Internal Revenue Code, was funded by the American Recovery and Reinvestment Act, and was awarded to qualifying advanced energy projects to support new, expanded, or retooled domestic manufacturing facilities.  Awards totaled $2.3 billion and went to 183 projects in 43 states. The funding will create tens of thousands of high quality clean energy jobs and support the domestic manufacturing of advanced clean energy technologies including solar, wind, and efficiency and energy management technologies.  Serious Materials has three years to purchase new manufacturing equipment for the Chicago facility, at which point they will cash in on the tax credit.