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SMI Aluminum Systems’ Leon Silverstein discusses his reentry into the glass industry and his plans for the new company

Post Time:Sep 28,2010Classify:Industry NewsView:93

Leon Silverstein, former CEO of Arch Aluminum & Glass, Tamarac, Fla., has reemerged in the glass industry, heading up SMI Aluminum Systems LLC, which announced the purchase of SMI Systems, Medley, Fla., last week (read the news article). Former Arch COO Richard Silverstein and former Arch Director of Product Development Manny Valladares are also partners at SMI Aluminum Systems.

Below, Silverstein discusses his plans for SMI, his new role and challenges facing the industry.

Tell me about your decision to create SMI Aluminum, purchasing SMI Systems. What prompted you to pursue this opportunity? What appeals to you about heading this company?

We were looking to go back into business. We thought with the way the economy was, with such a competitive marketplace, that the aluminum side of the business was a better first step than the glass side. We were either going to buy somebody and expand it, or create a complete start-up business. We started to search for companies that produce hurricane products, Dade County-approved products and bomb-blast systems. That's how I ended up looking at SMI. We called up the owner, told him why we were calling and what we were looking to do. One thing led to another, and it just worked out. Business is challenging right now—everybody is challenged. We have the understanding of the industry, we're Florida based, and we're coming to the table at a time when things are hard. We wanted to be back in the industry—we are doing the same thing my dad did in 1978.

What are your plans for the new company?

First, is that we are looking for the opportunity to grow this company. This is probably not the only acquisition that's going to happen in a short period of time. ... We're looking for companies on the aluminum and glass sides in regional markets that make sense from an economic standpoint. We're very much looking at the culture of a company—SMI has a family appeal to it. We are not looking for big autocratic organizations, but organizations that are fun and flexible. ... We're hoping to offer an alternative to people. We'd like to get involved with people who are still interested in being a part of the business. We can just take some of the stress off the business owner.

We're also looking to expand our product line. Currently, SMI has a range of hurricane products, blast products and retrofit/renovation products. We'll continue to evolve our hurricane and bomb-blast product lines, and add some non-impact products. We'd also like to focus on the theme of energy efficiency, developing products to serve that need. And, we're looking at adding some solar products.

It's a tough and challenging market right now. I didn't go back into business for a year or two. This is a long-term move. I'm 50 years old, I don't play golf and I don't fish. This is what I want to do, and I'm not looking to retire for another 15 to 20 years.

How will your role, and the way you approach the job, be different at SMI? What appeals to you about leading a smaller company?

In general, I'm looking forward to the day-to-day aspect of business—doing things that you get so far removed from when you're at a much larger company, such as dealing directly with vendors and customers. I'm looking forward to making decisions where you can see your results day to day. At a bigger company, you've got to turn a big ship. You might have to wait five, six months to see the results of your decision. Here, we can make a decision today and see results tomorrow. I'm getting back to my roots, starting at the bottom. I get a chance to redo things with the benefit of experience, and I can do it quicker this time.

According to the most recent economic forecasts, the nonresidential segment might not pick up until the second half of 2011. What are the advantages of taking over SMI in this climate? What steps do you intend to take to ensure the company comes out of the recession on top?

The economy is going to be terrible—we're expecting it to be rough all through 2011. There are advantages for smaller companies in this economy. Smaller companies have smaller overheads and are more nimble. You can just run a business day to day. The size and scope of bigger companies create a much bigger overhead, and make it more difficult to weather the economic cycle. At smaller companies, one of the biggest costs is senior management, and we can control those costs—we didn't get into this business so we could take home large incomes.

As to the steps we need to take, obviously, we need to control costs. Additionally, we need to develop new products. Our product lines have to expand and evolve, and it has to be done economically. Companies can't have the same product line that they do now in 18 months, when we emerge from this economy. And, we're trying to work on customer relationships, because there's a smaller amount of business out there. We have always been big believers in customer relationships.

Banks and the inaccessibility of loans have been affecting the industry. Why is this, and what can glass companies do?

The construction industry is red lined. Loan portfolios for commercial construction are stressed. Developers are having a tough time getting loans, and that's really affecting our industry. It's just tough to work with banks today. At SMI, we thankfully don't have any bank debt. What glass companies have to do is to keep doing what most are doing, controlling costs. Not everybody is going to make it.

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