Perrysburg-based O-I Glass lost $52 million before taxes in the third quarter of 2024, a period that was marked by substantial layoffs, at least one plant closure, six planned furnace shutdowns, the shuttering of the company’s Perrysburg innovation center, and the termination of the company’s “people and culture” leader.
The loss contrasts the $82 million in earnings the company reported for the previous year's third quarter and is indicative of a challenging time for the industry.
Ed Zraik, a Toledo glass industry veteran, observes that O-I always thought it could change consumer preferences, but that hasn’t happened.
“Consumers do like glass, but they’re unwilling to pay a premium for it as a packaging for many products,” he said.
Scott DeFife, president of the Glass Packaging Institute, said the industry is seeing some indication that the bottom of the restocking/rebounding period is over.
“Plants on the West Coast are making wine bottles, but they’re being challenged by Asian wine bottle imports. And plants on the East Coast that make food jars are being challenged by South American companies,” he said.
O-I Glass President and CEO Gordon Hardie issued a statement about the company’s disappointing quarterly financials.
“Our third-quarter results declined when compared to the strong performance in the prior year period,” he said. “Lower earnings primarily reflected significant production curtailment as we took decisive action to reduce high inventory levels after several quarters of sluggish demand. Net price was also down, which was partially offset by modestly higher shipment levels.”
Formerly known as Owens-Illinois Inc, the company was founded in Toledo in 1929 and has long been one of the world’s leading manufacturers of glass bottles and containers. The company has global manufacturing and sales facilities and operates 35 plants located in nine countries in the Americas, Europe, and Asia. It employs 23,000 people globally.
Mr. Hardie has led the company since May 15. A native of County Cork, Ireland, Mr. Hardie holds an MBA from the University College Dublin’s Smurfit graduate school of business. He has served on the board of O-I Glass for nine years. Before taking the reins there, he served as president of the food and ingredients division of Bunge Ltd., a global agribusiness and food company.
Under Mr. Hardie’s leadership, the company has embarked on a major restructuring and cost-cutting program called Fit to Win.
“Fit to Win is not just another cost-out initiative,” Mr. Hardie said in July. “It will fundamentally reshape our company.”
Mr. Hardie also said at that time that the company plans to close at least six furnaces over the subsequent three quarters, a move that will reduce the company’s overall manufacturing capacity by 4 percent.
Today, however, the company announced that it plans capacity reductions of 7 percent.
A statement on the company’s website says that the firm has “identified value platforms that will unlock shareholder value and build on the stability of the company over the next three-year horizon.”
“Focus on these key areas will allow O-I to return to profitable growth, capitalize on opportunities, reduce structural costs, improve manufacturing performance, recognize the strong sustainability profile of glass and O-I, disrupt the industry with breakthrough technology and lower business and financial risk, while improving the overall performance of the company,” the statement said.
“We do not believe our 2024 performance is reflective of what the business can deliver,” Mr. Hardie said. “We are determined to improve results in 2025 and beyond as we drive the improvement measures in our Fit to Win program.”
In 2023, the company reported a loss of $103 million, or $0.67 per share for the year. A year ago, the company’s stock closed at $15.50 per share. Since then, the share price has fallen to $12.44, a decline of 19.7 percent.
First Published October 29, 2024, 9:49 p.m.
