Rheem

Monumental concerns in the industry—from supply chain issues and inflation concerns to electrification and decarbonization—challenge contractors and manufacturers alike to be ready to rise above the fray.

On September 28, Hurricane Ian, a Category 4 storm, hit the Florida coast, leaving a trail of destruction, loss of life, and people without power, and a place to live. The following week, after the residual rains moved through the South Atlantic states, PHCC CONNECT attendees, exhibitors and staff were fortunate to convene in Charlotte, N.C. for the annual show.

One of the many bright spots during CONNECT was the annual Industry Perspective panel—back by popular demand—which featured some of the industry’s finest: Elisabeth Sutton, Director—Marketing, Professional Channel, Kitchen and Bath Americas, Kohler; Bruce Carnevale, President and CEO, Bradford White Corporation; Randy Roberts, Vice President of Sales and Marketing, Rheem; Scott Teson, Senior Vice President of Skilled Trades, Milwaukee Tool; Jeff Fetters, Chairman, Federated Insurance Companies.

As I prepared for the panel, I would have been remiss if I didn’t mention those people still struggling in the Sunshine State. And the more I thought about what was happening in Florida, the more I could draw some symmetry of what has been plaguing our nation the past few years.

Things like supply chain. Are the right people getting what they need in Florida? Labor shortage. Do we have the manpower to provide assistance? Or, do we have the proper infrastructure in place? What about electrification? I mean, I had just seen a meme that said something like, “2.8 million people without power, time to fire up the Teslas.” Now that could be perceived as a bit naïve, but when you look at California, for instance—declaring no new gas cars sold in the state by 2035—concerns about adequate infrastructure are real.

It’s a good thing we had the right people on the panel to address such concerns. I learned that Federated Insurance sent “catastrophic teams” to Florida to help. “We needed to have boots on the ground as quickly as we could,” said Fetters. “Businesses need to have high expectations for employees to remain safe. Disasters can strike at any time. A risk management culture has to perpetuate through every single employee,” said Fetters.

As a side note, how can contractors prepare for such an event? “Make sure you sit down with an agent to see what it would cost to replace your business, and any personal property in the event of any potential catastrophe,” said Fetters.

Supply Chain Woes

Nonetheless, supply chain issues dominate conversation almost daily among working contractors. “We are still challenged by supply chain issues, and it has forced us as a company to better manage our supply chain. We do things differently now,” said Carnevale.

As a manufacturer, you’re never getting what you need from plastic resins overseas, nickel component slowing lines down to component issue challenges,” said Roberts. “This makes us be creative on managing supply chain.”

According to Sutton, “We see that luxury side of remodeling is still high. The thing impacting supply chain is that distributors are receiving more products, managing inventory for distributors.”

Investments in People/Training

Milwaukee Tool has made an $400 million investment in domestic manufacturing. “We want to control our own destiny,” said Teson. Yet, Teson pointed out that with more commercial construction projects on the books, how do we find the right people to support those jobs? “We need skilled tradesmen and women to support those efforts,” said Teson.

Sutton suggests that technology in products is a viable avenue to attract the younger generation. C’mon, who doesn’t like the way an impact driver or press tool feels in their hands?

“We also need to attract people to the industry to show them how wonderful it is, and that should not be specific to one type of person,” said Sutton. “We need more diversity, not just one profile,” continued Sutton.

“This is a fantastic industry, and once people are a part of it, they stay,” said Roberts.

Yet, once in the building, how do we get people to stay? Training. “It has always been a critical part of what we do. We have been very flexible with our training—we will take it to customers and also bring them into our facility,” said Carnevale.

How do employees continue to get better year after year? The panel agreed that it’s about establishing a culture of training in your office. This gives employers a competitive advantage in keeping people and attracting people because they will be seen as investing in them.

Electrification is the Buzzword

According to Carnevale, topics surrounding electrification loom large. For example, will the infrastructure be in place to support the new products? How will the infrastructure build out in a very short time? This puts the consumer in a bad position and puts our national security at risk—i.e., supply chain issues and the country’s fragile relationship with China.

“Electrification and decarbonization, whether we like it or not, we need to be prepared. We have the products available,” said Roberts.

Government Regulations

Carnevale noted that he receives email relating to a regulatory issue almost daily. “The DoE is extremely active, and there’s a requirement that is in the foundational law that once the DOE sets a new minimum efficiency standard, it cannot go backward.”

According to Rheem’s Roberts, there is an “Install Date Standard for Air Conditioning Systems” looming and, “Contractors will be breaking the law if they install an AC system not rated to the new standard come January, 1 2023.” Efficiency standards dictate that sell through of existing systems will be allowed in the northern states if the product was manufactured prior to January 1, 2023. This is not the case in the South and Southwest. AC systems must comply with the 2023 federal minimums to be installed after January 1, 2023. Current Heat Pump systems can continue to be installed in all regions as long as they were manufactured before January 1.

And who is enforcing this, you may ask? “Contractors and distributors will be self-policing installations to make sure they meet the new standard. In addition, manufacturers cannot ship products that don’t meet the new standards or allow them to be registered for warranties if installed after January 1. A standard based on install date will ultimately create inventory challenges for everyone in the industry,” said Roberts.

That Dreaded ‘R’ Word

There are whispers of the “R” word and I don’t think it means that “relief” is on the way anytime soon. From inflation to fuel prices, contractors have faced economic hardships that may continue to linger into 2023, and beyond. “We’ve been bearish on the economy longer than the financial press has been,” says Carnevale. “It is pretty clear that we are in a recession. There have been some positive signs, the fed is getting aggressive, and we will see significant drop in housing market.”

Carnevale continued that he is concerned about the macro economy, even though there are some good signs. “Labor shortages continue to be a vexing problem, and we need to focus on the labor participation rate compared to pre-pandemic, meaning there are a lot of people who are choosing not to work,” said Carnevale.

Teson said that interest rates are the real threat. “We’re watching it very closely and trying to make decisions that will make us come out stronger than our competitors.”

Carnevale added that there is a very distinct demand for discretionary vs. non-discretionary products. In the end, “As the demand starts to soften, we are subject to the laws of supply and demand. It is not going got back to where it is pre-pandemic, but will see some softening on pricing.”

Roberts says that overall, we should see a correction. “How do you position yourself to come out stronger than you go into it?” That’s the question.

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Company Recognized for Industry Leadership and Product Development

Rheem®, a leading global manufacturer of water heating and HVACR products, is being recognized for innovation and product design by the IoT Breakthrough Awards and the Good Design Awards.

Rheem received “Overall Company of the Year” designation from the IoT Breakthrough Awards, which provides market intelligence and recognition programs in technology such as Artificial Intelligence, CyberSecurity, Digital Health and FinTech, as well as IoT.

“The IoT awards programs spotlight the ‘breakthrough’ leaders in the world’s most competitive  categories of technology,” said Christopher Freeman, Senior Manager of Smart Products at Rheem. “This is an area that receives a high volume of nominations, which makes the honor particularly significant and rewarding for our team at Rheem.”

Rheem’s Global Air Division earned two Good Design Awards. Rheem Classic Plus® Series System won in the Building Materials category while Rheem Renaissance™ 3-6 Ton Commercial HVAC units received recognition in the Industrial category. The Rheem Classic Plus Series System units offer solutions for homeowner challenges such as small spaces, excess noise, and outdated energy use, ensuring access to high-quality air. Rheem Renaissance 3-6 Ton Commercial HVAC units offer heating and cooling solutions that suit customer’s business needs, design and application requirements.

“We are honored that the Good Design Awards included Rheem in its selection of best products,” said Chris Day, Vice President Product Strategy and Engineering, Rheem Air Division. “It is important recognition for our team members who work diligently to innovate and ensure that our products are leaders in the world marketplace.”

Additionally, Rheem’s Water Heating Division’s ProTerra® Hybrid Electric Heat Pump Water Heater earned a Good Design Award in the Building Materials category. ProTerra combines unparalleled efficiency, first-of-its-kind innovations for the category, and easy serviceability features packed into an aesthetically pleasing design.

Hiller Plumbing, Heating, Cooling & Electrical (Hiller), the region’s premier provider of residential and commercial plumbing, HVAC, and Electrical service and repair, was included among Ruud’s “Top Market Maker” winners and honored as the #1 Top Ruud ProPartner for 2021. This award follows Hiller’s six first-place recognitions among Ruud’s list of Most Reliable Contractors.

The Ruud Market Makers award recognizes exceptional U.S.-based contracting businesses for sales, customer support, and overall service excellence. Through their strong vendor relationships with Ferguson Enterprises (Nashville) and Coburn Supply (Memphis), Hiller was ranked among the Top 10 “Market Makers” for 2021.

Above this honor, Hiller was named Ruud’s “Most Valuable Player”, recognizing their “overall stellar performance” as the #1 Top Ruud ProPartner of 2021. The company was honored via email announcement in February, then via live announcement at the 2022 International ProPartner Conference at the MGM Grand Hotel in Las Vegas, Nevada, on March 7 and 8, 2022. Chief Executive Officer, Jimmy Hiller and Chief Operating Officer, Jimmy Hiller, Jr. accepted the award in person at the event.

“We couldn’t be more grateful to receive the MVP recognition from Ruud this year”, remarked Jimmy Hiller, founder and CEO of Hiller Plumbing, Heating, Cooling & Electrical. “In partnership with our wonderful distributors, we are able to provide Ruud’s exceptional equipment to so many families across the southeast. Ruud’s commitment to installation and maintenance excellence,” he continued, “parallels our own high quality and service standards, so we are exceptionally thankful for this award, that acknowledges this commitment.”

Launched in 1990 with a single employee and just $500, Hiller was founded on the tenets of professionalism, exceptional levels of customer satisfaction, and a dedication to high quality work. As a result, Hiller has grown exponentially, operating across 15 locations in 7 states with a fleet of over 500 trucks.

Ruud, part of the Rheem family of brands, provides Ruud-branded heating, cooling, and water heating products for residential and light commercial use to professional installers across the United States and Canada. Named for water heating pioneer, Edwin Ruud, the brand was acquired by Rheem in 1960. To learn more, visit www.ruud.com. Founded in 1925, Rheem is the only manufacturer in the world that produces heating, cooling, water heating, pool/spa heating and commercial refrigeration products. Rheem, headquartered in Atlanta, has an international presence in 14 countries. To learn more, visit www.rheem.com

 Hiller Plumbing, Heating, Cooling & Electrical provides residential and commercial service and repair throughout Tennessee, Southern Kentucky, Northern Alabama, Northern Georgia, Southeastern Arkansas, Northeastern Mississippi, and Northwest Florida. As the homeowner’s premier provider of choice with a 100% satisfaction guarantee, Hiller is Tennessee’s largest residential and commercial plumbing, heating, air conditioning, and electrical services provider. Hiller, a 12-time honoree to the Inc. 5000 List, employs more than 700 associates, boasts a fleet of 500 “Happy Face” trucks across 15 locations, and has responded to over 1.5 million service calls. Hiller is a proud sponsor of the Nashville Predators, the Tennessee Volunteers, and the Vanderbilt Commodores.

Acquisition will expand residential and commercial single-room AC solutions

Rheem has announced its intent to acquire Friedrich Air Conditioning, a 138-year-old manufacturer of premium air conditioning products, from Monomoy Capital Partners.

Friedrich is a manufacturer of room air conditioning, dehumidification and air purification products for residential and commercial applications. It is a recognized industry leader in high-end air conditioning solutions designed for single-room use in hotels and multi-family buildings.

Founded in 1883, the company is based in San Antonio with manufacturing in Monterrey, Mexico and distribution centers in Texas and New Jersey.

“Friedrich has steadily innovated its residential and commercial offerings and grown its market share,” said Mike Branson, President, Global Air at Rheem. “They will bring a unique air conditioning product portfolio along with specialized products to the Rheem family of brands. Friedrich’s product offerings, company history and industry expertise make this acquisition a perfect fit for Rheem. Together, we will harness the power of our talented workforce and enhance our ability to deliver reliable and energy-efficient products that our customers and contracting partners expect.”

Upon the close of the acquisition—which is subject to additional regulatory approval—Friedrich will be a standalone business unit within the Rheem Global Air business.