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Legislation could boost business for AGC Flat Glass

Sharon Hayes • Nov 22, 2009 at 12:00 AM

Legislation filed in the House and Senate could benefit AGC Flat Glass and ultimately boost business for the company’s Church Hill plant.

The bill, introduced last week in the House and last month in the Senate, would amend a portion of the federal stimulus plan giving homeowners a tax credit for making energy-efficient improvements.

As the stimulus now stands, homeowners installing new windows, doors and skylights can get a tax credit of 30 percent of the cost of the project, up to a total of $1,500.

But the tax credit is available only on certain products.

Under the proposed legislation, the tax credit would be available for homeowners installing improvements that meet the 2010 Energy Star Program criteria for residential windows, doors and skylights — and that would include products produced by AGC.

“It will take a barrier away that was created by the prior legislation,” said Chris Correnti, AGC vice president, general counsel and secretary.

AGC initially supported the tax credit for home energy improvements, thinking the measure would help boost its business by encouraging homeowners to purchase replacement windows and doors for energy efficiency.

Late last year, the company started construction on a new coating operation at its Greenland Plant in Church Hill. The new line was designed to coat glass coming out of the furnace with an energy-efficient seal. The result is a low-emittance, or “Low E” window with excellent solar heat gain, which helps retain heat within a building. Such products are often used in the colder Northern climates.

However, AGC officials started contacting their congressmen when they learned the stimulus legislation passed by Congress included criteria that would exclude AGC’s products from being eligible for the tax credit.

Demand for AGC’s products declined, and the company put the brakes on its expansion plans in Church Hill.

“There hasn’t been the demand to justify completing the project and starting up the operation,” Correnti said.

He put direct blame on the stimulus plan, adding other AGC plants have been impacted around the country.

“It certainly was a factor in the reason demand has been nowhere near what people would have anticipated. There’s no question it had an impact,” he said.

If the proposed legislation passes, demand should pick up and construction on the Church Hill line could resume. Correnti said the new line could be operational sometime early next year, and that could mean more jobs for the plant.

Although Correnti couldn’t say just how many jobs the new line would mean, he said some laid-off workers could be recalled.

“We’re trying to operate that plant as efficiently as we can, but there are some positions that would be filled,” he said.

The challenge now is ensuring the legislation to amend the stimulus tax credit passes. Typically, changes to tax provisions don’t pass by themselves. The bill would have to piggyback on other tax legislation, Correnti said.

“There’s usually some legislation toward the end of the year to extend various tax credits or maybe modify certain tax credits or tax provisions for the coming year, and we anticipate there will be a similar bill this year, and this legislation can be added or tacked onto that,” he said.

He credited legislators, particularly U.S. Rep. Phil Roe, R-Johnson City, who worked to get support for the amended legislation. Roe and several other congressmen co-sponsored the bill in the House.

“I am pleased that the nonsensical provision in the stimulus bill that would exclude certified energy-efficient products made by AGC Flat Glass is on track to be fixed,” said Roe. “The jobs provided by AGC in Tennessee are valuable, and protecting them is a top priority.”

The legislation was introduced in the Senate by Sen. Jay Rockefeller, D-W.Va.

Earlier this year, AGC halted production at its “Jerry Run” plant in Bridgeport, W.Va. The facility manufactured glass for the automotive industry.

Asked if AGC might reopen the West Virginia plant after receiving support from Rockefeller, Correnti said the market doesn’t justify the move at this time.

“We hope at some point in the future that it would be justified. But certainly you wouldn’t see that next year. The market is just not going to recover enough to justify restarting that plant,” Correnti said.

Locally, AGC also operates the Blue Ridge Plant in Kingsport in addition to the Church Hill operation. The company has a distribution facility in Abingdon as well.

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