In the Pink: Owens Corning emerges from bankruptcy

by Patrice Sarath, November 16th, 2006, 7:00 am

Cue the bass and bring in the horns: It’s the Return of the Pink Panther. After six years in Chapter 11, Owens Corning is back. The building materials company, best-known for its PINK FIBERGLAS® insulation and iconic brand image was brought low by asbestos lawsuits; it declared bankruptcy in 2000. (Aside: What other company has a wily swinging ’60s mascot with a theme song and a Saturday morning cartoon? Owens Corning had to make a comeback.)

Per the reorganization plan, the company has established a $9 billion trust for victims, which gives it additional protection against lawsuits as well as a few advantageous tax breaks. 

So it’s all good, right? Well, in business, as in comedy, timing is everything. Like the impeccable Peter Sellers as Clouseau, Owens Corning could not have picked a worse time to come back. The housing market has tanked and the major home builders are suffering as they struggle to sell their existing inventory, while facing vastly decreased demand brought on by a rise in interest rates and some conflicting economic indicators.

It’s not just Owens Corning: Rival building materials manufacturer USG, which came out of an asbestos-related bankruptcy after a five-year sojourn, is facing the same tough market.

Still, there are bright spots on the horizon for Owens Corning. For one thing there was surprisingly little opposition to its reorganization plan, which had to be okayed by asbestos-victim claimants. Even bondholders, who had been cranky about previous plans, were mostly okay with it. This bodes well for smooth sailing here on out. 

The company has also been busy during the past six years, steadily expanding sales in markets outside the housing sector, which is still its biggest segment. It has a joint venture with French glassmaker Saint-Gobain and is buying another French company, stone veneer manufacturer The Modulo/ParMur Group. So long as they don’t let Clouseau in the glass factory everything should be okay. 

So strike up the theme song and exit humming — The Pink Panther’s back and he’s pinker than ever.