Pilkington

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For other uses, see Pilkington (disambiguation).
Pilkington Group Limited
Type Subsidiary
Industry Glassmaking
Founded 1826 (St Helens)
Headquarters St Helens, United Kingdom
Number of locations Germany is now central organisational hub
Products Glass
Parent NSG Group
Website pilkington.com

Pilkington Group Limited is a multinational glass manufacturing company headquartered in St Helens, United Kingdom and a wholly owned subsidiary of the Japan-based NSG Group. Prior to its acquisition by NSG in 2006 it was an independent company listed on the London Stock Exchange and for a time was a constituent of the FTSE 100 Index.

History[edit]

The distinctive blue Pilkington's Head Office, a Grade II listed building constructed in 1959-63 designed by Maxwell Fry and Jane Drew.
Steam rises from "The Hotties" in St Helens town centre in the 1970s, water warmed by the Pilkingtons factory is pumped into the canal and is warm enough to support tropical fish making it a popular fishing site.
Pilkington Floatglass factory in Halmstad
Pilkington glass in a Mercedes-Benz
A Pilkington liveried trailer.

The company was founded in 1826 as a partnership between members of the Pilkington and Greenall families, based in St Helens, Lancashire.[1] The venture used the trading name of St Helens Crown Glass Company.[2] On the departure from the partnership of the last Greenall in 1845, the firm became known as Pilkington Brothers.[3] In July 1894 the business was incorporated under the Companies Act 1862 as Pilkington Brothers Limited.[2][4]

Pilkington was floated as a public company on the London Stock Exchange in 1970.[5] It was for many years the biggest employer in the northwest industrial town. The distinctive blue-glass head office tower-block in Prescot Road, used as the firm's world HQ, and completed in 1964, still dominates the town's skyline.

Between 1953 and 1957, (Sir) Alastair Pilkington and Kenneth Bickerstaff invented the Float Glass Process, a revolutionary method of high quality flat glass production by floating molten glass over a bath of molten tin, avoiding the costly need to grind and polish plate glass to make it clear.[2] Pilkington then allowed the Float Process to be used under licence by numerous manufacturers around the world.

Pilkington, with its subsidiary Triplex Safety Glass, in which it gradually acquired a controlling interest, also became a major world supplier of toughened and laminated safety glass to the automotive and building industries.[2]

During the 1960s and 1970s, Pilkington used the flow of Float royalties to invest in float glass plants in several countries including Argentina, Australia, Canada and Sweden; also to acquire major existing flat and safety glass producers and plants in USA (Libbey Owens Ford), Germany and elsewhere. A Monopolies Commission report in 1967 concluded that Pilkington and Triplex operations were efficient and entrepreneurial and, despite their high share of the UK glass trade, operated in a manner suited to consumers' best interests.[2]

In late 1985, Pilkington was the subject of an unfriendly take-over bid from BTR Industries, a large British-based conglomerate group. Pilkington's efforts to reject the bid were assisted by its employees, the town and some government ministers. Their joint successful work was followed by a withdrawal of BTRs offer in early 1986.[6]

Litigation[edit]

Pilkington aggressively protected its patents and trade secrets through a network of licensing agreements with glass manufacturers around the world. As described in a US appellate ruling in 1998:

Glass is made by melting sand, limestone, and other minerals such as dolomite. Until a few decades ago, good plate glass that would allow a clear view without bubbles or ripples was made by drawing glass from a furnace in strips, rolling it to the desired thickness, grinding it flat, and polishing it on both sides. The modern "float" technique is to pour the molten glass on a layer of very pure molten tin, so that the molten glass floats on the tin. The surface of the molten tin is very smooth. When the glass hardens it is about as smooth as the molten tin was and does not need grinding and polishing. This float process makes better plate glass for less money than the old way. Although the float process was first patented in 1905, it did not become commercially widespread until Alistair Pilkington developed a practical version, patented in the late 1950s and early 1960s.
By the beginning of 1992, Pilkington plc owned all but one of the manufacturing plants around the world employing the float process for making plate glass. Because the older method was commercially obsolete, this gave the Pilkington firm a monopoly. But the firm had two problems maintaining its monopoly, expiring patents and difficulty maintaining secrecy.
The critical patents expired in the late 1970s and early 1980s. Expiration of the patents did not by itself destroy Pilkington's ability to control the industry. While the patents had still been in effect, Pilkington had licensed their use, and required the licensees to keep the details of the float glass process secret. But the nature of plate glass makes it hard to keep a secret about how to make it. It cannot all be made in one plant by one manufacturer. Unlike, say, photographic film, glass is brittle and heavy, so shipping expense and breakage make it impractical to manufacture all the world's plate glass in one place. Instead, factories produce glass by the float process all over the world. Yet 95% of the commercial grade plate glass in the world is produced by Pilkington and its licensees.
Guardian started out as a challenger to Pilkington's dominance. It hired experts from the glass manufacturing division of Ford Motor Company, a Pilkington licensee, and went into the business of designing and operating float glass factories. After a flurry of lawsuits, Pilkington and Guardian settled their differences and made a secret agreement to prevent new entrants into the market. Guardian was to take the lead in order to enable Pilkington, a British company, to reduce its exposure to United States antitrust law.[7]

On 25 May 1994, the United States Department of Justice filed suit in U.S. District Court alleging that Pilkington, through its technology licence agreements with more than 60 companies around the world, had created a cartel by exercising control over the markets in which its licensees could sell float glass and construct float-glass manufacturing plants, and over the customers within each market to which each licensee could serve. Beginning in 1962, Pilkington entered into patent and know-how licence agreements with all of its principal competitors. Although these agreements differed as to details, they generally provided for:

(l) allocation and division of territories, restricting each licensee to a specified country or group of countries for the construction and operation of float glass plants generally corresponding to the territory in which the respective licensee previously manufactured flat glass;
(2) limitation on the use of Pilkington's float glass technology strictly to the manufacture of float glass;
(3) restrictions on sublicensing of Pilkington's float glass technology; and
(4) the reporting and grant-back of all improvements in float glass technology.

Such behaviour is permissible when the business engaging in it has legitimate intellectual property interests, but according to the government, in this case it was a violation of the Sherman Act, because Pilkington's patents had expired and any trade secrets which it might have had in the process used by the licensees had long since become publicly known.[8] On the same day, the government and Pilkington filed a proposed consent decree, which enjoined Pilkington from enforcing these restrictions against its U.S. licensees, or against U.S. non-licensees, or against non-U.S. licensees wishing to export either technology or glass products to the United States. The agreement came into force on 22 December 1994, and expired ten years later.[9]


Takeover by NSG[edit]

In late 2005 the company received a takeover bid from the smaller Japanese company NSG. The initial bid and the first revised bid were not accepted, but on 16 February 2006 NSG increased its offer for the 80% it did not already own to 165 pence per share (£1.8 billion or $3.14 billion in total) and this was accepted by Pilkington's major institutional shareholders, enabling NSG to compulsorily acquire by scheme of arrangement the smaller holdings of other shareholders,[10] many of them being existing and retired employees, who had not wished to support the takeover. The combined company would compete for global leadership in the glass industry with the leading Japanese glassmaker Asahi Glass, which had around a quarter of the global market at the time of the deal. Pilkington had 19% and NSG around half that.[11]

The acquisition was completed in June 2006, after the European Commission stated that it would not be opposed.[12]

Operations[edit]

Pilkington has developed a self-cleaning coated float glass product, called Pilkington Activ. This self-cleaning glass has a coating which uses a method of photocatalysis to break down organic dirt with sunlight. The dirt is then washed away by the rain during a hydrophilic process.[13]

Pilkington has also developed and launched Pilkington energiKare – Energy Efficient Glazing, which can increase the energy efficiency in buildings and reduce environmental impact.[14]

References[edit]

Notes
Bibliography

External links[edit]