Jones led off the meeting by stating, "Two years ago we made a lot of promises. This morning we are talking about promises kept." Jones was referring to a speech he made as the newly appointed division president with a new executive team.

At that time, he promised a solid foundation of products with "best-in-class features" and then delivered over 24 major new product introductions in 18 months. These new products included a line of furnaces that won three national awards, including an Innovation Award at the 2004 Air-Conditioning, Heating, Refrigerating Exposition (AHR Expo).

Jones also highlighted the successful introduction of "top tier" product lines with the Rheem Prestige Series and Ruud Ultra Series products. He also pointed to the addition of the value lines of Rheem Corsaire and Ruud Zephr as a success story with sales increases of over 40 percent.

He gave much of the credit for the success in these product segments to input given to the management team from several of the loyal distributor partners and hundreds of contractors throughout the United States.

Regaining market share was another long-term strategic goal that Jones highlighted in a similar meeting in 2003. He proudly displayed graphics that showed an upward trend in the last year.

Looking to the future, Jones said, "The emphasis is on total cost management." Significant increases in the costs of raw materials, such as steel, copper, and aluminum, and continued increases in freight costs plague the industry.

He pointed to the soon to be operational plant in Nuevo Laredo, Mexico, as a prime example of how Rheem and Ruud will allow distributors to compete in the "value line" market.

New Marketing And Promotional Programs

Jack Sinkler told the group, "There is more to the competitive equation than price and product." He then outlined several new marketing and promotional tools for distributors including a new "e-learning" initative at www.trainingnetwork.com. He also indicated there will be new partnerships with best-in-class business trainers, a new and improved extended warranty program, and a top contractor program that will roll out nationally in 2006.

In the area of brand development, Sinkler said, "Our mission is to have Rheem/Ruud be the preferred brand of the dealer."

Sinkler stated, "There is beginning to be a buzz in the industry about our brand." He outlined aggressive plans to communicate in trade magazines and emphasized a major advertising program on The Golf Channel that was to kick off on the weekend of The Rheem Classic (May 13, 14, and 15). The Golf Channel televised a total of eight hours of the tournament, which was held at Hardscrabble Country Club in Fort Smith.

Plans For New Products

Alan Kessler, vice president of research and development for the company, outlined plans to accelerate product development with 44 new products in the next 18 months.

In addition to the new 13-SEER products to be introduced in the fall of 2005, Kessler announced a completely new line of air handlers were being readied for introduction and a new line of 16-SEER heat pumps would be introduced in 2006.

Other products nearing introduction were integrated electronic controls and the two-stage "Super Quiet 80" furnace with ECM motor technology. "We are on schedule, and we are going to make it happen," Kessler asserted.

Distributors learned more about the Mexico plant from Chuck Holt, vice president of operations. He claimed the plant will be capable of manufacturing up to 200,000 condensing units. Bill Lux, vice president international and parts, outlined the significant growth in replacement parts through the Prostock® stores that have opened throughout the United States. He also announced the 100th store to open in June at Palmer Donavin Distributors in Columbus, Ohio.

Publication date: 06/20/2005