Luxembourg-based glass and aluminum packaging giant Ardagh Group closed two of its US glass plants over the last month.
Temporary layoffs affecting 244 employees at the group’s Seattle, Washington site took effect on 1 July. Ardagh makes wine bottles at this site, as well as at sites in California, Oklahoma, and Pennsylvania.
That same day, a layoff affecting a similar number of employees at an Ardagh facility in Houston, Texas, took effect, although it was unclear whether those layoffs were meant to be temporary or permanent. The plant, which had previously belonged to Ardagh customer AB InBev according to a report by the Houston Chronicle, is understood to make beer bottles.
These moves follow capacity reductions at Ardagh’s US glass facilities last year, including the closure of facilities in Louisiana and North Carolina, and the shutting down of one of the production furnaces in Seattle in June 2023. The Louisiana layoffs were described by the company as permanent, and the North Carolina facility has since been sold to a company outside the glass packaging industry, according to local news outlet The Wilson Times.
The company’s bondholder calls at the end of the fiscal year 2023 noted that last year’s closures were a response to double-digit declines in shipments in its North American glass business, attributed to general destocking in 2023 in most end markets, as well as “the ongoing disruption to a major U.S. beer brand that we serve”. Effectively, Ardagh’s beer bottle production activity has been affected by the decline of sales of Bud Light, an AB InBev brand targeted by a consumer boycott over its collaboration with a transgender influencer in April 2023.
Meanwhile, Ardagh petitioned the US government in the final days of 2023 to launch an investigation into imports of glass wine bottles from Chile, China, and Mexico, arguing that sales of these imports at less than fair value were materially injuring its own business. The US International Trade Commission is currently in the final phase of that antidumping and countervailing duty investigation; its report on the matter notes that Ardagh is not the only wine bottle maker to have shut facilities in recent times, as its competitor O-I Glass also suspended production at a facility in Portland, OR a year ago.
In a quarterly results call in late July, Michael Dick, CEO of Ardagh Glass Packaging, observed that changing market demand, and specifically a move away from glass and towards aluminum for some applications, was something the company was watching closely. “I think there’s clearly…been a shift of pack mix into the can, and we need to understand how that moves forward from that standpoint.” This, he says, is something being seen mainly in Europe in the beer and soft drinks category.
Beyond the company’s glass business, the financial press has also been reporting throughout 2024 on plans to sell Trivium, a metal packaging company in which Ardagh holds approximately 42% of the shares (the other co-owner being the Ontario Teachers’ Pension Plan).
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Written by Nick Wood
