Pittsburgh Annealing agrees to buy Smith Glass; deal may preserve glassmaker's rich history

The acquisition links two of the region's oldest companies, as Pittsburgh Annealing Box traces its lineage back to 1893, while L.E. Smith Glass has been making handmade glass for the past 97 years in Mount Pleasant, Westmoreland County.

"I think there's tremendous potential when it's managed appropriately for the market. It's just a question of getting the right products to the right customers. Once you see an opportunity, it's important to act decisively," said William A. Kelman, president of Pittsburgh Annealing Box.

Kelman, who signed a definitive agreement to purchase L.E. Smith Glass, did not disclose the purchase price.

The decision to buy the glassmaking operation is welcome news to the region, still reeling after the abrupt closing of the Anchor Glass Container Corp. in South Connellsville, Fayette County, last Thursday night, and the loss of approximately 340 jobs.

Glassmaking ceased at L.E. Smith Glass on June 30, after 11th-hour talks to find a buyer broke down, putting 57 employees out of work. Troubles mounted in July, when Bowling Green, Ohio-based Sky Bank filed a federal lawsuit claiming the glass company defaulted on a loan. The bank asked the court to force the company to pay nearly $4.6 million.

"We were fortunate to find a buyer. ... It keeps the company alive," said Mark DuMars, the head of a Mt. Lebanon-based turnaround firm appointed by the court as a receiver, or administrator, for the L.E. Smith Glass business. By mid-August, DuMars brought about 30 to 35 workers back to make glass on a limited basis to preserve core customers.

The purchase must be approved by U.S. Bankruptcy Court in Pittsburgh.

Kelman said several loose ends have to be addressed, including environmental issues. "We're evaluating all kinds of things. But nothing is insurmountable at this stage, based on information we've received so far," he said.

Kelman, a 36-year-old Scotsman, said he has experience in real estate finance and international banking and his team brings a lot of experience to the table.

"That's not to say we're underestimating our task, but there are solutions to challenges faced here. For one, we are going to be here every day. It's not a case of absentee ownership," Kelman said.

Both DuMars and Kelman said Sky Bank is on board with the venture.

"We do have an agreement, and we hope to conclude the deal within the next 60 days," said Curtis Shepherd, senior vice president of marketing for Sky Bank.

Shepherd did not disclose terms of the deal. "We knew we would not get everything back that we put in, so we priced this so someone could come in, run the plant and hopefully prosper," he said.

Pittsburgh Annealing Box designs and manufactures stainless steel inner covers and annealing line accessories. Kelman said the privately held company employs fewer than 100 workers. In glassmaking, the annealing process involves heating glass, then slowly cooling the product to prevent brittleness.

Hourly workers at L.E. Smith Glass are represented by Local 102 T and Local 537 of the United Steelworkers union. Officials of the union could not be reached for comment.

Kelman said the company has had initial discussions with the steelworkers union on a contract, which he deemed a "priority" that must be concluded before closing the deal.