Contractor Does It Right for 75 Years
Lanhardt’s claim that his family’s business is doing it the right way is borne out by the numbers. Revenues for 2010 were around $30 million, and 2011 marks McCrea’s 75th year in business.
Today, Lanhardt along with his brother, Gregg, and sons, Shane and Seth, continues to lead the family of McCrea companies to-
ward success. Although the business once focused mainly on the new construction industry, it has diversified and successfully transitioned to the service and replacement market.
The company originated in Washington, D.C., in 1936 as the McCrea Equipment Co., a heating and air conditioning wholesaler. When the original owner, C.L. “Mack” McCrea died in 1965, three McCrea employees bought the stock of the company from the McCrea estate. One of those employees was George E. Lanhardt, Wayne’s father. George bought the other partners out in the early ’80s and formed a new team.
“What my father did was sell stock to myself, Jimmy Birch, and Bob Everett,” Wayne explained. “We were much younger than my father, and we were more go-getters.” Birch and Everett were salesmen, and according to Wayne, the three of them “became a major player” in the new construction market in the metro D.C. area. “We were a very cohesive team,” Wayne said, adding that Birch remained with the company for 50 years until his recent retirement.
George acted as president from 1965 until 1987, when Wayne was named president. “I was very close to my father and worked very close with him for 25 years,” Wayne said. “I was very blessed to have him as my mentor, to lead me forward.”
One of the ways George mentored Wayne was by making him start as an installer. “He gave me a job at the very bottom of the box, and I loved it,” Wayne said. He noted that he had to work his way up from installer to service technician to service manager to general manager. “I know all aspects of the trade because I’ve done them,” he said, adding, “My big thing has always been integrity. We’re not here to gouge people and make all our money off one customer.”
When it came time for Wayne to lead the company, he said his philosophy was to exceed builders’ expectations. “If he said he wanted me in there Tuesday, I’d be in Monday. If he wanted it done Wednesday, it’d be done Tuesday,” he said. “The new construction business is a very, very difficult business to be in, but we always exceeded builders’ expectations.”
Up until 2006, McCrea Equipment Co. was mainly a new construction contractor. At the height of its operation, there were approximately 400 employees, and McCrea installed roughly 10,000 new HVAC systems per year. “We’ve dominated the [new construction] market,” Wayne said. “We are still a major player of what’s left of the new construction industry.”
Now, Wayne explained, McCrea has stayed in new construction to build its customer base for service and replacement. “We still do around 3,000 units per year,” he said. “If we do the job right the first time the customers will stay loyal to McCrea.”
Service and Replacement
According to Wayne’s older son, Shane Lanhardt, the leadership at McCrea foresaw the housing crash. “There was a tremendous amount of building in this market in the late ’90s and early 2000s,” Shane said. “We knew there had to be a ceiling, so we made adjustments.”
Recently, McCrea diversified into five separate companies. McCrea Equipment Co., with the corporate office based in Temple Hills, Md., and with offices in Virginia and Pennsylvania, still does new construction work with approximately 75 employees. Metro Equipment and Sheetmetal Products, based in Greencastle, Pa., manufactures sheetmetal products for individuals, other HVAC contractors, and several distributors with an estimated 25 people on staff. The other three companies are service, replacement, and custom home installation companies with offices located in Maryland, Virginia, and Pennsylvania. All told, McCrea employs 200 people and operates in five states with locations in three.
“We’re one of the few new construction contractors that has made the change to service and replacement,” Wayne said, noting that the three service/replacement companies were split so each company could review its own financial statements and determine where profits are made and lost.
Wayne’s brother, Gregg, owns and operates the Maryland service company. Shane, 34, owns and operates the Virginia company, and Seth, 32, owns and operates the Pennsylvania service company as well as Metro Equipment and Sheetmetal Products. Wayne noted that Metro’s state-of-the-art manufacturing facility separates McCrea from other contractors. “We knew that the key to Metro’s future success would be making large investments in machinery for manufacturing,” he said.
The transition to service and replacement work has kept McCrea busy during the recession. “Even this year, as dead as things are, we’re steady,” Wayne said.
Shane added, “Our business was 90 percent residential new construction, but now 60 percent of our work comes from service and replacement.” During the last five years, Shane has grown the Virginia service company from $1 million to $8 million in sales.
“The future looks real great on that [service] side of the business,” Seth said. He noted that the Pennsylvania division didn’t start out with as strong a customer base as Virginia and Maryland, but still did $3.5 million last year. “Within five years, that’s pretty successful,” he said, adding that he has a young, hungry team helping him to propel the company forward.
McCrea has also branched in other ways. “We were the first contractor in the Washington area certified for Energy Star 3.0, and the first certified by ACCA for the new QA program,” Wayne said. He explained, “Builders now are trying to separate themselves from foreclosed homes. What separates them? Energy Star. That’s why McCrea has concentrated more on the Energy Star builders.”
Brian Hamilton, general manager of McCrea Equipment Co., noted that McCrea Services of Maryland has four full-time raters on staff, including individuals certified by BPI and LEED. “Moving forward, we’ve implemented knowledge from the energy side into how we design houses. It’s part of how we can help builders. No other company is going to do that because they’re going to lose money.”
Meanwhile, down in Virginia, Shane is also focused on providing energy-efficient options for homeowners. He has established a relationship with Piedmont Realty & Construction of Charlottesville, Va., a start-up builder that is differentiating its homes from others in the market by their energy-efficient design. Through McCrea’s contract with Piedmont, the builder is now offering Trane hybrid or dual-fuel setups as standard in its new homes, as well as offering upgrades to 20 SEER units.
David Wilson, an account manager at the Virginia service company, is excited about the Piedmont deal because he knows from experience how hard it is to get tract builders to pay attention to energy-efficient HVAC equipment. Wilson has been in the industry for 32 years, and has spent the last 16 at McCrea. “For years while I was selling new construction HVAC, I tried to no avail to get the builder to offer the customer something more than the bottom-dollar brand and base efficiency for their heating and air conditioning system,” he said. “I give all the credit to Shane in convincing Piedmont to upgrade and do this.”
Wilson added, “The direction this company is going is only in the right direction.”
The Next Generation
Looking back, Wayne said he has tried to run the business in a way that his father, who was well-respected in the industry, would approve of. “I try to say, if my daddy was looking at me now, what would he think? And, truthfully, my sons have done the same thing.”
Wayne continued, “The boys came into the business many years ago, and they have absolutely excelled. They came from the ground up themselves.”
Shane and Seth both confirmed this. According to Seth, “The old man tried to humble us.”
Shane added, “Nothing was really ever handed to my brother and me. I started at the bottom, sweeping the floor of the warehouse. We didn’t come in and get handed the keys.”
“They are both boys of very high integrity and have gained the respect of all who work here. And I think they’ll be fine going into the next generation,” Wayne said.
These days, Wayne takes care of the financials but leaves the day-to-day running of the business to his sons, who are both happy to be continuing the family legacy. Both Shane and Seth became stockholders of McCrea this year, Wayne said, adding, “And the next generation goes forward.”
Sidebar: Celebrating 75 Years
On Sept. 17, McCrea hosted a party to celebrate its 75th anniversary. As part of the celebration, Wayne gave out plaques to 20 employees who have been with the company for over 15 years. “The people who work for you are the people who really make this company,” he said.
Wayne himself has been at McCrea for 41 years. “I’ve been at the 50th, 60th, 70th, and now at the 75th,” he said. “This party was about making it through a hard recession and moving on to the next goal.”
Shane gives his father the credit for the company’s longevity and current stability. “Dad took it from an $8 million to a $60 million company at our peak in 2003 before the economy fell,” Shane said. “He’s done a lot with the company and taken us in the direction we’re in.”
Seth explained that his father is “entirely based on integrity in relationships.” In other words, he said, Wayne will “never shortchange a customer, and he will always do the right thing even it if costs us money on the job.”
Summing it up, Wayne said, “I’m blessed that it’s been 75 years and has another whole future ahead of it.”
Publication date: 10/10/2011