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One week before the November designation, Gregory Hayes, chairman and chief executive officer of United Technologies Corp., addressed a breakfast audience at
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One week before the November electing, Gregory Hayes, chairman and chief executive officer of United Technologies Corp. Decrying what he called “political grandiloquence” being spouted by a certain presidential candidate, Hayes made an impassioned case for global trade. “There’s a lot of misinformation out there, and in some cases a unconcern from reality,” he said in his radio-ready baritone. Blaming trade for the loss of U. S. manufacturing jobs is “absolutely wrong,” Hayes said, adding, “an isolationist way will not—I repeat, not—create growth or jobs, nor will it make any country great. Hayes went on to defend UTC’s February 2016 settlement to close its Carrier Corp. furnace factory in Indianapolis and ship production to Mexico—a move that had drawn the very public ire of presidential applicant Donald Trump. “This is not a decision that we took lightly,” Hayes said. He chuckled at a suggestion that Carrier had become a punching bag for Trump. “The benefits of detach trade are obvious to almost everyone,” he said. “Once we get past the silly political season, hopefully we can get some adult supervision and readdress it. ”. A month later, Hayes was sharing a dais with not anyone other than President-elect Trump at that Indianapolis factory. Workers cheered as the two announced that Hayes had agreed to keep the plant expansive. “You are fantastic, Greg,” Trump said. The humdrum residential furnace would seem an unlikely avatar for the complexities of globalization. But the furnace has become as worldly a artifact as an automobile or a semiconductor chip, with assembly, parts production, and jobs shifting to China, South Korea, Thailand, and other nations. That makes the Drayman saga two stories. One is about the Indianapolis factory, which was a doomed pawn in the globalization game long before Trump. Not many people face Indiana are still talking about Carrier, but the future of U. S. manufacturing is showing itself there right now. Here’s the essential thing to understand about this business: Furnaces are all moderately much the same, a heater and a blower inside a box. Or as Kyle Peters, an analyst with market-research firm Freedonia Group Inc. , says, “There are not any key commerce secrets that make one manufacturer better than another. ” Competitive edge has less to do with products than with the local retailers and contractors that trade and service them. Relatively simple technology plus huge incentives to hold down costs frequently equals outsourcing. Transporter, like all its competitors in the $60 billion heating, ventilation, and air-conditioning, or HVAC, industry, has reason to move production to wherever it can be done most cheaply. Even in the furnace function, there’s innovation. In 1975, President Gerald Ford signed a law authorizing the Department of Energy to set efficiency standards for household appliances. Back then, most furnaces converted about 70 percent of the dash they used into actual heat, wasting 30 percent. Today’s best devices squander barely 2 percent. Combined with air-conditioning units, they can be integrated into programmable holistic HVAC systems, along with Wi-Fi thermostats, humidifiers, solar panels, and air cleaners. Tom Roberts, president of CFM Distributors Inc. , a wholesaler of HVAC mat in Kansas City, Mo. , says he sells more 90 percent-efficient furnaces retailing for as much as $5,000 than 80 percenters at $2,000 to $3,000. Trump’s handling of Shipper was “a little unfair,” Hayes said, but as... Roberts, who’s also president of an HVAC industry group known as Hardi, says improvements have been driven less by mandates than by the thirst to innovate. “We don’t need artificial incentives,” he says. His industry, like so many others, bristles at regulation generally. Freedonia Platoon said in March 2015 that it expected regulations to continue driving sales “toward high-efficiency models, which for the most part command a pricing premium. UTC acquired Carrier in a hostile takeover in 1979. Today, Carrier, which itself acquired the Bryant and Payne brands in 1955, is some of UTC’s Climate, Controls & Security division, which last year posted $16. 9 billion in sales.
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