Dr. Lowell Catlett had the crowd's attention with not only what he said, but how he said it. He pointed to America's aging population to stress the importance of service and convenience.

One could argue that Halsey Cook, president, North America-Residential, Carrier Corp., may have been the bravest soul present, as he had to face some tough questions regarding his company’s relationship with Sears at both an open forum and a closed-door session with ACCA members. (See sidebar below.)

Yet, there’s no doubt that the man who stole the ACCA show was keynote speaker and economist Dr. Lowell Catlett, who outlined for contractors the changing demographics that will impact their businesses. The futurist had the 1,200-plus HVACR professionals laughing from start to finish — due mainly to his one-of-a-kind, animated presentation, complete with, as one person put it, “facial expressions like Red Skelton.”

“Just about everybody asked the staff for a videotape of Lowell Catlett’s opening presentation,” admitted Kevin Holland, vice president, communications and membership services, ACCA.

Holland and ACCA organizers were certainly all smiles with the convention’s overall turnout. The 2003 version broke records as more contractors registered to attend than have come to the convention in at least a decade.

“ACCA is a different organization than it used to be, and our conference is a lot different than it used to be, too,” said Paul T. Stalknecht, ACCA president and CEO.

At this convention, the number of educational workshops offered to contractors nearly doubled. And most took advantage of the nearly 50 workshops in four specific educational tracks: commercial contracting; residential contracting; marketing/management; and mold and moisture.

Jack Sinkler, vice president of marketing for Rheem Air Conditioning Division (left) chats with Ray Isaac, of Isaac Heating and Air Conditioning, Rochester, N.Y.

Crowd Pleaser

“I don’t know about you, but I think that’s a lot of money,” he said, to a roar of laughter. “There is affluence here.”

Catlett said Americans today make, on average, 40 percent more than their parents’ made. He also noted that Americans pay nearly 10 percent less to eat than their parents. This means Americans today have, as he termed it, “some disposable income.”

“This is an affluent culture,” he said. “I don’t believe having two TVs in one household is living in poverty.”

That’s not to say Americans today appreciate their economic status, he was quick to point out.

“It’s like what my mama told me, ‘People bitch the loudest when their belly’s full,’” said Catlett. “When you get affluent, you start bitching.”

In addition to being affluent, Catlett said Americans are aging. He said people are living to be 78, on average. “We are living longer,” he said. “Most men our age take up jogging just to hear heavy breathing again.”

He noted that with an aging society, “health sells.” For instance, after a study pointed out that red wine helped the cardiovascular system, Catlett said the sale of red wine has gone up 9 percent each year since 1991.

“We are looking for ways to live longer,” he said.

Another explosion on the horizon, he said, is the future labor force. He noted that more immigrants are coming to this country each year and more women are graduating with college degrees than men. He said in three years, half of American businesses will be owned by women and one out of every five executives will be a woman.

“That’s going to be our labor force,” he said, “so, get used to it.”

Because Americans are aging and are affluent, Catlett noted that every business that provides services and convenience in the future will be ahead of the game. He said right now Americans are spending more on entertainment and pets than ever before. “Each year we have raised the level for the next generation,” he said.

Because of the Internet, he said, knowledge is increasing, too. However, he said the Internet is also providing “information overload.” As a result, he said Americans today are making business decisions based on brand name recognition and reputation.

“Trademarks are worth platinum,” he said, using McDonald’s as his example. “You go there because you know what you are going to get. Brand name recognition is huge.”

Closing out his talk, he said future businesses will stress convenience and will rely on the digital world to make it happen.

“Folks, know the power of convenience,” he said. “Convenience drives everything. If you make it difficult for me to do business with you, I won’t be there. If you make it convenient, I’m there.”

Newly elected ACCA chairman John Saucier urged contractors to accept that many manufacturers are in the service business to stay.

In All Seriousness

“Over the past three years, ACCA’s chairmen have been focused on retooling our association’s engine, refurbishing our interior, and getting us ready for the road,” said Saucier, founder and president of Temperature Inc., Memphis, Tenn. “Now, I get to drive. And, I love to drive.”

Saucier urged independent contractors to stop talking about “unfair advantages” of their competitors and recognize that they have advantages of their own.

“Sure, some of our competitors are ‘big,’” he said. “Big means they have some advantages, but they also have disadvantages. When they make a mistake, it’s a big mistake.”

He added, “Independent contractors can outperform ‘big’ competitors in many ways. We know our customers, we know our communities, we know our employees … and unlike big companies, we can change very quickly, if we are willing to change.”

Saucier told attendees that contractors need to change the way they’re recruiting and hiring employees. “To those who complain that labor costs are too high, and then complain that they can’t find good employees, I say, ‘Wake up.’ Industries that offer high pay, good benefits, and solid training seem to be able to find employees. Let’s make HVAC one of those industries.”

He closed by mentioning what he called “the elephant in the parlor”: strained contractor-manufacturer relations.

“I’m pleased to see the support we’re receiving this year from manufacturers,” he said. “But, the current system is broken. We must work together to fix the communication problems that lead to finger-pointing and blame-laying on both sides.”

He called on manufacturers to let their local branches and independent contractors compete fairly, so that end users receive “the professional service they deserve, no matter who they choose for service.” Saucier urged manufacturers to give independent contractors access to parts and information from a central source rather than local branches that may be competing for customers.

And, he told contractors to accept that many manufacturers are in the service business to stay, and to accept them as competitors — but to treat them just like they would any other competitor.

“Competition makes America’s free enterprise system what it is,” Saucier concluded. “Let’s admit we need each other and embrace the fair competition that makes our entire industry stronger.”

South Carolina head football coach Lou Holtz preached the importance of leadership at the convention's closing general session.

Closing Inspirations

“I never understood how some people born with so little achieve so much. And why some people born with so much achieve so little,” said the South Carolina football coach. “I don’t know why people complicate success. The first thing we have to be are leaders. The most important thing in your organization and my organization is leadership. The amount of talent you have determines the potential of your organization. That’s why we have to recruit. That’s why we have to have good people. If you don’t have good people in your organization, you are going to be limited as to how far you can take that group.”

Holtz said the relationship you have with your people determines company morale, “so it’s important to have the right attitude.”

“As the leader of your organization, you have to be a self-starter,” he said. “I have to get myself ready for those Monday morning meetings. I know that my attitude affects the entire organization.”

Attitude is a choice, he said. At one time, Holtz was coach of the New York Jets, but he lasted only eight months. “Here I had the greatest job in the world, but I didn’t have the right attitude,” he said.

Holtz encouraged the crowd to give each employee an opportunity. He said each individual wants to succeed.

“You can succeed when nobody believes in you,” he said. “You can’t succeed if you do not believe in yourself. Self-confidence is critical.”

After the event, John Sedine of Engineered Heating & Cooling, Walker, Mich., said, “If I were asked what was the one most important thing I brought back from the convention it would be without question ‘renewed inspiration.’ I can think of nothing that moves a business forward that is more important than a burning passion for it.”

Halsey Cook, president, North American Residential HVAC, Carrier Corp., answers questions at the manufacturers' forum.

Sidebar: Cook Responds To Carrier-Sears Relationship

For the first half of the session, the industry leaders discussed the importance of backing the North American Technician Excellence (NATE) certification program, the importance of addressing the source of water when it comes to eliminating mold growth, the strong belief in training people, the rise in both commercial and residential building automation, and the reasons for manufacturers’ extended warranties.

Then came the question from Conrad, which Cook was asked to reply to first: “The traditional channels of distribution are being challenged by recent sales arrangements with retailers like Sears and Home Depot. How do you respond to loyal contractors who feel abandoned by this marketing strategy?”

At least Cook had his wits about him with this quick quip: “So this is where the ‘Out of the Comfort Zone’ …”

Before Cook could finish his sentence, the crowd responded with laughter and a round of applause.

“Did I throw that curve?” Conrad asked.

Cook quickly replied, “It was more like a harpoon.”

After another round of laughter from the crowd, Cook responded to the question.

The Answer
“We welcome the question. Obviously, I have been privy to a lot of e-mail notes and a lot of chat rooms and a lot of conversations here. I think they are all good conversations,” said Cook. “At the end of the day, you step back from it and say, ‘Isn’t it wonderful to have an industry that is this passionate about their business and have so much energy about it?’ In that spirit, let me make a few comments.

“In the current business in retail, we can’t see it as an ‘or’ type of situation with the contractor community. It is very much an ‘and.’ The retail business within HVAC has been around for a long, long time. We track it very closely. At the end of the day, the amount of ducted, split, and furnace equipment that was sold through retail five years ago is about what was sold for 2002 as well. So we are not seeing this kind of ‘Pac-Man’-type of activity out of retailers, just gobbling up everything else.

“As we look at it, it represents about 3 percent of what goes to market. It has represented about that amount for quite some time. We don’t see it as something that threatens or in any way undermines our commitment to what is our predominate and traditional channel to market, which is through the contractor community.”

Concerning Carrier’s decision to partner with Sears, Cook said, “It was not something we treated lightly.”

He noted that Carrier subsidiary ICP and predecessor Heil/Quaker have been manufacturing Kenmore products for Sears since 1962. “We have found that the Sears customers are going to be Sears customers,” he said. “They buy from Sears because they like that company. They like that store. And we really see it as an alternative channel to, and one that runs in parallel to, what is the more than 97 percent of the business.

“And I would add to that — I mean, you can read my lips — I would say over 99 percent of our marketing dollars, our sales force — everything about the way we go to market — is done in support of the contractor community. Events like this, all of the national advertising, training programs, co-op — it is virtually all done in support for a group like this.”

Before signing off, Cook faced the crowd to add, “I would just like to reinforce that this [contractors] is the core of our business. We thank you for your business. And please don’t view this move as being a conflict with that.”

— Mark Skaer

Publication date: 04/14/2003