Building materials maker CertainTeed says a defective product settlement that leaves the company on the hook for $103 million won’t jeopardize plans to reopen a ceiling materials plant in Meridian in 2014.
The Valley Forge-Pa. based CertainTeed says work is on track for a July reopening of the ceiling tile plant the company closed in 2009. The reopened plant will include $24 million in upgrades and will put more than 100 people to work in the next three years, the company says.
CertainTeed, a subsidiary of French building supply conglomerate Saint-Gobain, stopped its Meridian production in 2009 during a market downturn, laying off 120 workers at the time. The company cited sluggish commercial building in choosing to close one of its two ceiling tile plants. CertainTeed selected Meridian for the shutdown because the plant there is older than the sister plant in L’Anse, Mich.
The company announced in early November that it would settle a federal class action lawsuit relating to fiber cement siding it manufactured and installed over the last decade.
The lawsuit – Michael Patota v. CertainTeed Corp. — charged that CertainTeed began manufacturing “severely defective” WeatherBoards Fiber Cement exterior siding in 2002 using fly ash instead of sand to cash in on “large federal tax breaks.” The suit charged the board did not live up to manufacturer claims of being impervious to moisture.
In agreeing to settle, CertainTeed denied it made a defective product and wanted to avoid the time and expense of further litigation.
The weather board suit was filed in the U.S, District Court, Northern District of Georgia. Its settlement comes approximately one year after CertainTeed paid several hundred million dollars to settle a federal class action suit claiming defective manufacture of organic roof shingles. The settlement set aside from $400 million to $600 million, with payout totals depending on the number of claims made.
Graham Thayer, VP and general manager for CertainTeed Ceilings, said in an email the weather board settlement will not prevent the company from investing in the Meridian restart. “The settlement regarding our fiber cement siding received preliminary approval after our decision was made to re-open the Meridian facility and in no way will impact the progress we are making to reach our targeted July 1, 2014 re-opening date,” Thayer said.
He said the Meridian structure remained in good condition after its closing. “So we are focused on installing new equipment and calibrating the production lines and to be fully operational — manufacturing and shipping our ceiling panel products to customers—by July 1.”
Ceiling tiles have been manufactured in the Meridian facility since 1941 throughout various stages of ownership. CertainTeed took over the plant in 2005.
The re-started Meridian plant will ramp up slowly but with the $24 million investment in equipment it can expand capacity as demand grows.
The return to Meridian will help CertainTeed meet increased demand for its products, especially in the healthcare and educational markets, according to Thayer.