Chiller Group Shares Information, Resources

July 8, 2004
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SCOTTSDALE, Ariz. - The Chiller Systems Group (CSG) is a network of independent contractors who service and repair large-tonnage chillers. The group was formed in 1994 and has met semi-annually since that time. Their latest and best-attended meeting was held here this past March, hosted by Metro Mechanical Inc., Phoenix. Members spent their time discussing weighty issues in the industry, as well as sharing information with one another.

Many companies, such as Benshaw Inc., Turbocor Inc., RPC Co., Kordyne International, and Enecon, presented the group with their latest technologies. One manufacturer discussed a program that would give CSG special training courses and a direct technical support line for all the company's air conditioning and retrofit products. In return, CSG would make a commitment to support their products and specify their equipment whenever possible. A separate session was held to cover the complicated area of controls.

This is definitely a technical group of people that thrives on the details. It is also a concerned group that is worried about their livelihoods, due to the increasing amount of competition in the industry.

Some Background

CSG was initially formed to help contractors compete in the burgeoning chiller retrofit market of the mid-1990s. Basically, contractors found that end users were often being charged high prices to convert their existing chillers to the new refrigerants. Contractors had difficulty obtaining the retrofit kits, and they soon learned how to obtain the conversion materials and do their own engineering.

"Several contractors shared conversion information and discussed techniques used to make the necessary conversions," said Pat Rucker, president of Entech Sales and Service, Dallas, and one of the founding members of CSG. "These discussions led to a group of contractors meeting in Minneapolis to form the Chiller Systems Group."

Today, CSG is more focused on technical training, as well as working with manufacturers to ensure that the independent contractor is being treated fairly. The group meets twice a year so that members get to know each other better. "Most of the work gets done on a daily basis through an e-mail user group," said Rucker.

"One member sends an e-mail to the group describing a problem he has, and other members respond. All members accept the responsibility to respond quickly to each request."

Not all requests involve service problems. Some are made in order to obtain information of a general nature. Just as important to the group are those who deal with management problems. The group is neither a strictly technical organization nor a strictly management organization. A healthy mixture of technical expertise and management expertise in each member company is what makes this organization successful.

Current Issues

At the March meeting, much of the time was devoted to member contractors talking about the difficulties they are having in competing with equipment manufacturers for the service business.

"I think contractors deserve to play on a level playing field," said John Saucier, Temperature Inc., Memphis, and a former chairman of ACCA. "Sometimes contractors see strong evidence that maybe that's not the desire of some of the manufacturers. When we see issues that stand in the way of independent contractors delivering the best possible service to their customers, we're going to step up and say it's not right."

That's one of the reasons ACCA started the "Co-Stars" program last year. Through Co-Stars, ACCA brings issues to manufacturers that are important to contractors. ACCA obviously can't force manufacturers to do things they don't want to do, but the group talks to them about particular problems contractors are having.

"CSG identifies a lot of these manufacturer issues, particularly the ones concerning commercial contractors, and makes ACCA aware of them. Then ACCA is able to get further input from the contractor community and bring these issues to the table with the manufacturers," said Saucier.

Bruce Long, vice president, Entech Sales and Service, Fort Worth, Texas says CSG is working to make the manufacturer-contractor relationship a win-win situation. "If the manufacturers get better representation in the field, their product is going to be represented better," he said.

"People in the field are going to see that it's good operating equipment and want to buy more of it, so that's a plus for them," he continued. "For the end user, it's a bonus to have more than one place to go, because then they're not locked into having to pay whatever someone wants to charge."

In order to represent the equipment better, Long says there's a critical need for training and technical support. "A positive relationship with the manufacturer will include providing us with the training we need to work on their equipment, which is going to get us to recommend the equipment to the end user, and, in turn, sell equipment for the manufacturer. That's the ultimate goal: To get everyone to play in the sandbox and not think they have to do it all themselves."

As Rucker noted, "A level playing field makes it possible for us to provide quality service to the end user at reasonable rates. It's not just about getting our share of the market, it's about contributing to the society and market."

Controls Training

One of the breakout sessions at the March meeting involved control systems. Long says he was particularly interested in this very complicated area.

"At the meeting, we went through some of the idiosyncrasies of the control systems. Basically, we learned the different options of a control system and how each contractor can help other contractors out with technical support, because controls are probably even more proprietary than air conditioning."

Long added that they're striving for control systems that aren't so proprietary. Even in this era of so-called open protocols like BACnet and LonWorks, Long said that manufacturers frequently offer control products that require special training to install or service, and that training may not be offered to the contractor.

"Manufacturers are coming up with ways to make their systems not quite as open as everyone thinks. In other words, they'll tell you it's an open protocol, but that open protocol only allows you to do certain things. If you want to do the whole thing, then you have to buy the $10,000 box, but they still won't give you training for the box."

Long noted that much of the controls conversation centered around manufacturers that lower the initial price on proprietary control systems, so they can have exclusive access to all future service. "We're not looking for anything unfair. We're just trying to stay in the market and get the training. If we can't get the training, we can't service it, and we'll end up just doing pipefitting rather than being full-service contractors."

This would effectively eliminate competition in the marketplace and certainly be a great disservice to the end user, noted Saucier. "The end user loses out when manufacturers are restrictive with information and/or access to the parts and pieces of their systems. Some manufacturers will not sell components for installation or service unless a contractor ‘qualifies,' which may include selling only a certain brand or else selling a high dollar amount of equipment annually."

This trend is very disheartening, indicated Saucier. "Sadly, I am not terribly optimistic it's going to get better," he said. "I think the crescendo has yet to be reached."

The next Chiller Systems Group will be hosted by Mallory and Evans this fall in Atlanta. For more information about CSG, visit www.chillergroup.com.

Sidebar: Two Manufacturers Respond To Contractor Concerns

The concerns brought up by contractors at the recent CSG meeting prompted The News to ask chiller manufacturers about their views of the independent service contractor. Responding to the questions were John Conover, vice president - Americas Sales, Trane Commercial Systems; and Bob Russell, vice president - Marketing, from York. The questions and their answers appear below:

Trane

Question:
How long has your company provided chiller service to end users?

Conover: We've been providing building owners with HVAC products and systems for more than 70 years, and we have provided service for over 40 years. We offer these products and systems and services all over the world.

Question:
Does your company plan to expand its ability to service chillers or do you still see the need for independent contractors to provide most of the service work?

Conover: Contractors are the primary purchasers of Trane products, systems, and services. However, there are times when we need to meet the expectations and needs of building owners. Because of the complexity of our products and systems and the trusting relationships we've established, building owners often expect that they can call us directly for services and comprehensive facility solutions. We will continue to support the contractor as well as building owners and others when requested.

Question:
How does your company work with independent contractors to ensure they are installing and servicing your equipment properly?

Conover: Trane provides contractors with systems, support and training, and opportunities to participate in Trane product and vertical market development. We also continue to educate building owners and HVAC contractors on the value of Trane products, systems, and services, and the value we bring to their buildings and business.

York

Question:
How long has your company provided chiller service to end users?

Russell: York International has been a provider of service to end users since the introduction of its first chiller products.

Question:
Does your company plan to expand its ability to service chillers or do you still see the need for independent contractors to provide most of the service work?

Russell: We are a company that tries to be responsive to customer needs. In as much as our customers desire the type and scope of service provided by our own operations, we will continue to grow those operations accordingly. Where customers choose to build relationships with quality independent contractors, we will continue to support that growth as well. The service market is very large and fragmented and by its nature affords solid growth opportunities for any quality operation.

Question:
How does your company work with independent contractors to ensure they are installing and servicing your equipment properly?

Russell: York supports independent contractors with a comprehensive and highly accessible library of technical literature ... hard copy and electronic. We provide a wide range of training courses on servicing and installing our products. We also offer very strong support with service parts through our national parts hub and our area service offices.

Publication date: 07/12/2004

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