The color of money
January 1, 2008
ORLANDO, Fla. - Were Orlando International Airport officials welcoming HARDI for the group’s annual convention by scheduling HVAC work when many members were walking through the terminals?
Doubtful, but there was plenty of exposed heating and cooling equipment on display Oct. 6-9 when members of the Heating, Airconditioning and Refrigeration Distributors International were arriving for its fifth fall conference.
The airport was in the midst of major renovations and many ceiling panels had been removed, exposing diffusers, ductwork and other parts of the HVAC system. It seemed appropriate, somehow.
HARDI brought its members to the Orlando World Center Marriott, a huge facility with 2,000 rooms and multiple pools, restaurants and bars sitting on 200 acres, less than two miles from Walt Disney World.
At this year’s event, green building was a popular topic. HARDI recently joined the U.S. Green Building Council. Its popular Leadership in Energy and Environmental Design program, which awards points based on structures’ use of renewable resources, among other factors, has already been adopted by many U.S. cities and states.
Tipping pointsAn Oct. 8 meeting of HARDI’s HVAC Systems and Equipment Council dealt with the topic. “Has ‘Building Green’ Reached the Tipping Point?” was the title of the session, led by council chairman Tom Roberts.
He urged HARDI members to consider establishing a green-building council, since Americans are starting to feel they have a duty to conserve energy.
“A lot of this green-building initiative is being driven by conscience,” Roberts said.
Also on hand for the meeting was Ted Leopkey, a spokesman with the U.S. Environmental Protection Agency’s Energy Star program, and Rob Vieira of the Florida Solar Energy Center.
Vieira said the growth of environmental building in just a few years has amazed him.
“I think the green-building movement is huge,” he said, adding that a few years ago, attendees of USGBC conferences could fit in one room. The 2006 Denver show had 13,000.
Leopkey talked about the upcoming LEED-for-homes standard and how Energy Star, the U.S. government’s energy-efficiency label, helped consumers save $14 billion in energy costs in 2006. He also announced that Energy Star would soon have a program for HVAC equipment. Based in part on standards from the Air Conditioning Contractors of America, it will promote quality installations as a way to help reduce greenhouse gases and save energy.
Energy Star and HVAC“We want to make sure consumers are getting what they’re paying for,” Leopkey said, referring to the higher-efficiency standards mandated in recent years.
“Not all contractors are using (the ACCA’s) Manual J,” he said. “They’re basically slapping in what was already there.”
Leopkey expects the Energy Star HVAC program to launch this spring.
Another popular session, also Oct. 8, was “Keeping Up With the Rules of Change in HVACR Distribution.” Michael E. Workman, Ph.D., of Workman Associated Ltd. in Texas, explained that too many people who can’t grasp the industry are hurting profits.
“We’ve got a lot of people who don’t understand the ‘soft’ side of distribution,” he told the audience. “Never, ever let an accountant set your strategy. It’s like trying to drive your business based on a forecast.”
Many experts on sales distribution discuss “value,” Workman said, and it’s not always productive.
“In the last four or five months, you’ve heard an awful lot of talk about value,” he said. But don’t focus on that to the exclusion of price, which is still important.
“I believe anytime a customer tells you that your price is too high, they’re telling you the truth,” Workman said. The accompanying value isn’t there.
And when profit margins are down while employee costs are rising, it’s a recipe for trouble, he added.
Econ 101But such a scenario does present opportunities.
“I think a downturn is where you rebuild your profit,” he said.
Workman gave a list of seven principles that he called “economics 101”:
• Free markets work best
• Incentives matter
• There is no “free lunch”
• Decisions are made at the margins
• Transaction costs hurt trade
• An “invisible hand” of market prices directs buyers and sellers
• Long-term effects of actions are too-often ignored
“Nobody owns the customer,” Workman said.
HARDI also used the convention to install its 2007-2008 president, Randy Boyd of AC Supply Co. Inc. in Fort Worth, Texas. He replaced Progress Supply’s Mark Faessler, who had reached the end of his term.
Next year’s convention will be Oct. 25-28 at the JW Marriott Resort near Phoenix. The association held its 2005 meeting at the same resort.
For reprints of this article, contact Jill DeVries at (248) 244-1726 or e-mail email@example.com.