PPG Puts Auto Business on the Block
PPG Industries in Pittsburgh has enlisted Goldman Sachs to explore the
sale of its automotive OEM glass and automotive replacement glass and
services businesses, including LYNX Service, LLC. The company says this
is just a preliminary move and it's considering other options for the
segment, including acquisitions, restructuring and strategic alliances.
"We have a responsibility to our shareholders to evaluate our portfolio
and make sure we're creating shareholder value," says Jack Maurer,
spokesman for the company. "It has not been meeting the performance
standards that we've set for businesses in our portfolio."
In PPG's annual report, filed on February 21, it said 2006 earnings for
its automotive OEM glass segment declined year over year by $9 million.
The year before earnings plummeted by a staggering $30 million.
"Significant structural changes continue to occur in the North American
automotive industry, including the loss of U.S. market share by General
Motors, Ford and Daimler-Chrysler," the report said. "This has
created a challenging and competitive environment for all suppliers to
the domestic OEMs, including our operating segment. In 2007, the automotive
OEM glass business will continue to focus on cost reduction, developing
new, value added products and increasing sales volume."
With so much uncertainty over what eventually happens to the OEM glass
and automotive replacement glass and services businesses, Maurer had no
real timeline for a sale or any other decision. "We're still very
much in a valuation stage," Maurer said. "I don't think we can
speculate on what alternatives we will decide upon."
HERE to read the PPG 2006 Annual Report