Butch Welsch and Company Celebrate 130 Years
St. Louis HVAC contractor constantly changes business to remain competitive.
FAMILY TIES: After 130 years, the Welsch family is still serving the community's HVAC needs.
The year was 1895. Pro football was not a thing, and James Naismith had invented basketball just four years prior. The Wright brothers had yet to take flight, and railroads were the backbone of the U.S. economy.
At that same time, the Welsch Furnace Company was established in St. Louis. Fast forward 130 years, and Welsch Heating and Cooling looks a bit different – but is still flourishing.
How did the company do it? By changing with the times.
In the early days, the company had more of a general store feel than that of a heating and cooling company. Pot-bellied stoves were the most notable heating devices the company sold. If you are unfamiliar with what those are, ask ChatGPT.
When coal furnaces started being built, the company became a supplier, assembler, and installer of that product. Due to their size, they came in pieces and had to be assembled in the home's basement. Consider that the first of many changes.
Also, in the late 1920s and early 1930s, Welsch began to provide specialized sheet metal items such as gutters and downspouts, bay roofs, etc. This is a field in which the company continues to specialize today.
In the late 1940s, furnace manufacturers developed what was called a “gas-designed” furnace. That meant that the furnace was designed to heat with gas and was not a converted coal furnace. So that is what Welsch installed.
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With the beginning popularity of air conditioning in the early 1960s, the company became heavily involved in the custom design, construction, and installation of air conditioning systems on many of the thousands of St. Louis area homes already relying on Welsch to heat their home. By the end of the 1960s, nearly all of the homes that could be air-conditioned were air-conditioned.
From the early ’70s to mid-’80s, the company evolved again. This time, focusing its efforts on the new residential market.
In the late 1980s, several things occurred that changed the future direction of the company. Most importantly, there was a slowdown in the new residential construction market.
As a result, the company became very involved in the service and replacement of residential heating and cooling systems. Since then, the service end of Welsch has grown from 4 service technicians and 0 service contracts to over 5,000 service contracts.
Today, new construction is about 40 percent of their business, while service and replacement are 60%.
“It is a really good mix for us,” fourth-generation owner Butch Welsch said. “They don’t have the same cycles. When home building is down a bit, service can step in and help out.”
That happened this spring when, for multiple reasons, the new construction work slowed down for Welsch.
“It made for a unique spring, but our service and replacement carried us. Profit-wise, we are ahead of last year, so I have no complaints,” Welsch said.
So 130 years in, and the company is still changing with the times.
One of the key aspects of the business is marketing to its own customers. And with 5,000 service agreements, Welsch has a lot of customers.
In fact, 67 percent of their leads come from their own customers.
Another advantage Welsch sees these days is being able to differentiate his company from his competitors, who have taken on private equity investments.
“They have to worry about quarterly profits, and we don't. We can do things for the long run. We can take care of a customer if it costs us some money now, but it's going to help us down the road. We can do that without worrying about it,” Welsch said. “We have a lot of new customers that are coming to us from companies that have been bought by private equity companies.”
The company is still very much a family-run business. Butch’s son-in-law and grandsons are on the payroll.
“We have a good succession plan. We've got four relatively young people in key positions,” Welsch said.
Not that Butch is slowing down any time soon – even at age 84. He is often fond of saying that his retirement is two three-week periods when he steps away from the business to spend time at his timeshare unit in Florida. Three weeks in the spring and three weeks in the fall are his retirement.
He started in the business in 1963 and took control in 1986 after the death of his father.
“When I first took over, I would have never thought I could keep it going this long,” Welsch said. “The one constant has been change.”
Butch has given his life to the HVAC industry, and it means a lot to him.
“One of my biggest goals has always been to improve the image of the HVAC industry. There were times in my career when I didn’t want to say what business I was in because the industry had such a bad name. We are too important of an industry to let us go back to those times,” Welsch said.
