HVAC Observations I’ve Learned From the Road

• U.S. fund managers are betting on the HVAC industry, and that is a good thing. Companies like Johnson Controls International, Ingersoll-Rand, and United Technologies Corp. have all seen more than 25 percent gains since the start of the year. That is impressive even in a good overall market. Analysts believe this is directly related to climate change.

Now, I don’t want to wade into the waters of global warming/climate change and debate the science. I am certainly not smart enough to do that. But it is obvious that fund managers believe the increase in average temperatures will make air conditioning an absolute necessity for buildings and homes. There is already a push that not having air conditioning in prisons is cruel and unusual punishment. That is for the courts to decide, but I can easily see air conditioning in prisons becoming mandatory. At this point, states like Texas, Florida, and Arizona do not have laws on the books requiring it.

Just like it is foolish to go against the sharps in Vegas, it is also not smart to go against the sharps in the market. This is certainly good news for HVAC contractors.

• If you are at a conference and have the opportunity to sit in on a Weldon Long presentation, make sure you do. His story about going from prison to a New York Times bestselling author is truly inspiring. And he knows the HVAC world, as he showcased at the EGIA Epic meeting.

He also made a great point about how business owners are perceived. You might not be able to tell it from listening to the Democratic Party debates, but earning money and building a business should not be demonized.

“For every $1 of everything, the company gets to keep 20 cents. That does not seem like an absurd profitability to me. And that’s the best companies. We know that the averages are in the 3 to 5 percent net income,” Long said. “But we get this belief in our head that all those companies are crooked. It’s interesting because I have worked in a lot of industries, and this is the only one where you look at the least successful company in the industry and try to emulate their prices.”

The takeaway: HVAC contractors deliver a great service and value and should not feel bad about charging properly for it. And if you work hard and earn enough to have a second home, a boat, etc., that should not be looked down upon. It should be looked up to.

• I had the pleasure of awarding Jim Batson, owner and CEO of H.C. Blake Co. in Huntsville, Alabama, The ACHR NEWS Ron Smith Leadership Award at Service World Expo.

He’s the sixth generation who’s worked at this family company. When Batson purchased the company, its work was 90 percent commercial construction and 10 percent residential service. It was also the year the market collapsed. Batson knew he’d have to adapt. Now, the company does 50 percent commercial construction and 50 percent retail service. They employ 150 people and have about 60 fleet vehicles. Due to recent growth, the company — which had been in the same building for the past 50 years — relocated to a larger, 30,000-square-foot facility. They have a separate facility for training new employees, complete with a computer lab, a training room, and a model house for them to practice working on.

This is one of the sharpest young contractors in the country, running one of the nation’s oldest contracting companies. He’s incredibly innovative, thinking way outside the box.

Congrats, Jim!

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