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Take Us Home! Opportunities in the Residential/Service Market

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Page 1: Partners in Progress - Vol 7 No 1

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Page 2: Partners in Progress - Vol 7 No 1

CONTENTS

Flounder, Survive or Thrive? . . . 2

The River Runneth . . . . . . . . . . . 3

Bring in the Green . . . . . . . . . . . 6

Dare to Be Different . . . . . . . . . . 8

Power of Many . . . . . . . . . . . . . 10

Got Work? We’re Ready . . . . . 13

Teamwork Turns LeadsInto Sales . . . . . . . . . . . . . . . . . 14

Follow the ‘Green’

Brick Road . . . . . . . . . . . . . . . . 16

Take Me Out to the

Ballgame . . . . . . . . . . . . . . . . . 20

Partners In ProgressVOL.7/NO.1

MICHAEL J. SULLIVAN

JOHN ILTEN

CO-PUBLISHERS

KAARIN ENGELMANN

[email protected]

EDITOR

DEBORAH BARKER

CREATIVE SERVICES

JANET BROXON

COVER ILLUSTRATION

Partners in Progress is a publication of the Sheet Metal Industry Labor-Management Cooperation Fund.

All contents ©2009 by the Sheet Metal Industry Labor-Management Cooperation Fund,

P.O. Box 221211, Chantilly, VA 20153-1211.

For subscriptions and address changes, visit www.pinp.org.

Canada Publications Agreement No. PM40063731

PRINTED IN THE U.S.A.

Flounder, Survive or Thrive?As numerous sheet metal projectsare put on-hold or cancelled, manySMACNA contractors and SMWIALocals are contemplating what theirfuture will bring. Now is no time forhesitation or doubt. Acting quickly anddecisively could be the differencebetween weathering the storm and beingswept away.

That is particularly true when itcomes to the American Recovery andReinvestment Act (ARRA) stimulus lawand additional spending bills enacted dur-ing the 111th Congress. Many projects areshovel-ready and will start in a few weeks.Some funds are available only for a limited time.

This is the organized sheet metal industry’s shot to be the industryleader. Instead of scrambling to learn “green” and “efficient” buildingtechniques, we’ve been using them for years and teaching them to ourapprentices and journeymen. We already possess the expertise that gov-ernment, industry, and even homeowners seek.

Now we need to get the word out that the SMWIA-SMACNA part-nership can get the job done right, offer on-time delivery, supply certifiedinstallers, and provide energy efficiency know-how.

One place to start is the Expertise branding program, using the logoin places where customers and government officials will see it—the web,advertisements, trucks, letterhead, and business cards, and combining itwith an energy efficiency message.

Enacting the Code of Excellence and letting contractors and theircustomers know that union members will abide by it could be key to con-vincing decision makers that signatory sheet metal is the right choice fortheir projects.

We also need to communicate the value of our apprenticeship pro-gram as a workforce development tool. Too many high school graduates,their parents, and gatekeepers fail to realize that a tool already exists totrain and place talented young people in a lucrative career with opportu-nities for advancement.

Most of all, we need to work together—labor and management—with active LMCCs that proactively face issues—from lobbying to nego-tiating residential agreements that make it possible to compete.

This issue illustrates some of the ways that contractors are finding tosurvive and even thrive in this tough economy. Watch for additional infor-mation in future issues of Partners in Progress and Partnership Commu-nicator. We encourage you to use the SheetMetalNetwork.org to shareyour experiences and lessons learned. �

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The River Runneth

Laying the groundwork for

residential market recovery opened

the floodgates of opportunity.

by Skip Maloney

Torrential rains and subsequent flooding ofIowa’s Cedar River last June led to evacuationof 5,000 homes in the area around Cedar

Rapids, Iowa, and destruction of some 800 busi-nesses, including SMACNA members Ilten’s, Inc.and Novak Heating-Air-Duct Cleaning.

These events gave the Local and area SMACNAcontractors cause to reflect on the residential agree-ment they negotiated 15 years ago. “Much of theongoing HVAC reconstruction work has beenaccomplished with union labor,” says SMACNAPresident John Ilten, a contractor based in CedarRapids. “It would never have happened if the areacontractors and Local 263 had not negotiated a con-tract that addressed a rapidly deteriorating residen-tial market.” continued on page 4

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He believes that if SMACNA-SMWIA had lost the resi-dential market, they wouldn’t have been in a position to claimthe flood work.

It took two negotiation cycles—in 1988 and 1992—forcontractors and the Local to agree on a proposal, which led tothe creation and development of separate residential con-tracts, a residential training program and a separate class oflower-paid worker, known as a residential technician, who isonly allowed to work on single-family dwellings.

“It wasn’t a change in circumstances that led to the even-tual agreement in 1992,” Ilten says. “What happened betweenthose two cycles was that nothing changed. Things didn’timprove. They got tougher.”

In an area dominated by non-union labor in the residen-tial market, Ilten and Randy Novak, Cedar Rapids contractorand chairman of SMACNA’s Residential Contractors Coun-cil, found themselves in a situation where increasing theirmarket share of the residential work wasn’t the issue. Rather,the issue was maintaining their existing share.

“We sold it to the union by telling them if we didn’t dosomething, we wouldn’t be able to maintain our existing man-hours,” Novak says. “I think we came together in the endbecause they believed us. It was a first step toward trustingeach other.”

That trust came in handy when the flood arrived. Offi-cials had a hard time determining just how high the river rosebecause the flood gauge was swept away by the water.

It was high enough that the community of 122,000resorted to using 20 hopper cars filled with rocks to weighdown a bridge in hopes of keeping it from floating away.Instead, the bridge collapsed and the rock-filled cars becamepart of the debris. In all, 55 of Iowa’s 99 counties were

declared disaster areas by Governor Chet Culver. Damageestimates quickly climbed over the $2 billion mark.

Signatory HVAC residential contractors and Local 263almost instantly got involved cleaning up the mess, enteringinto a non-stop cycle of work that continued through the hol-idays and into the new year.

While Ilten’s and Novak’s firms benefitted from the res-idential clean-up work, they also had to cope with the effectsof the flooding. The day after the flood Ilten found his officesunder eight feet of water. All of his computer equipment,including estimating and CAD design software, wasdestroyed, as were records of nearly 6,000 residential cus-tomers. Access to his customer database was gone.

“We had nothing,” he remembers. “There was no elec-tricity, no phone service, no water, no records. There wasn’teven a piece of letterhead with our name on it.”

Novak couldn’t even get to work. “We couldn't get with-in three blocks of our building for about a week,” he recalls.“We were not able to reopen that office until October.”

Concerns about gas mains and the danger of explosionsand buildings collapsing led the city—with help from theNational Guard and area police forces—to seal off much ofthe area. Home and business owners were only allowed toreturn after their zone had been declared safe.

“Having to wait for each zone to be released slowedrepair work down,” says Doug Hamilton of Ladco, Inc. “Itkept seious work from happening for about a month.”

To make matters worse, few area residents or businesses,including Ilten and Novak, were covered by any sort of floodinsurance. “We took an enormous loss,” Ilten says. “It’ll take

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a number of years to recover even under the best of condi-tions.”

One of the first phone calls that Novak received that firstday after the flood was from Randy Sconyers, business repre-sentative for Local 263. “We gave Randy the key to our train-ing center,” Sconyers says, “and let him use that facility tofabricate material.”

Novak used the facility for a temporary shop and ware-house. He set up a temporary office in the basement of hishome and installed a computer server he’d removed before theflood hit. With that, he got back to work.

To assist the overwhelmed local labor force, Sconyerscontacted Thomas Blankman, SMWIA’s Region 5 representa-tive, who put out a call for residential technicians from as faraway as Minneapolis and St. Paul, Minn., four hours away.

“It would have been a lot worse if we hadn’t had the sep-arate residential contract in place already,” Sconyers says.“Not only would we have lost the work a long time ago, butalso it wouldn’t have been available when it was needed afterthe flood.”

Novak notes that if residential contracts are not in placewell before an emergency hits, non-union labor will get all

the work. He is convinced that, floodwaters notwithstanding,the contract negotiations completed in 1992 saved his busi-ness.

“If we hadn’t come to an agreement, I’m 100% positiveI would not be a union contractor today,” he says. “I mighteven be out of business or looking at other options.”

Novak and Ilten agree that the road ahead isn’t likely tobe easy, particularly as the world economy hits hard times.They are just reminded of the importance of being aggressiveabout maintaining their share of the residential market. �

Maloney is a freelance writer based in North Carolina.

Map It OutWhether it involves disaster clean-up, air conditioning orfurnace tune-up, or even new installations, homeownersand commercial customers struggle in their search tofind qualified contractors to service their HVAC systems.

The SMACNA and SMWIA team stand ready to do thework, but how can they get the word out? Providing aroadmap toward expertise, the Sheet Metal IndustryLabor-Management Cooperation Fund (LMCF) has devel-oped HVACExpertise.com. This Web site highlights thesuperior expertise of signatory SMACNA contractors andtheir SMWIA workforce.

One way to capitalize on this valuable resource is toinclude the expertise logo and Web site address on allyour promotional materials, including your Web site,newsletters, advertisements, and business cards.

Visitors to the site find a 30-second flash movie with anoverview of howimportant it is tohave a properlyfunctioning heatingand air conditioningsystem and an HVACExpertise contractorto install and main-tain that system.

From both the homeowner and building owner/managersections of the site, potential customers can find links toHVAC contractors in their area and information on how tochoose an HVAC expert, the importance of industry stan-dards, answers to frequently asked questions, and more.

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Boyer Metal Company made Inc. Magazine’s 2008 list ofthe top 5,000 fastest growing private companies inAmerica. Now this Flagstaff, Ariz. company, like so

many other sheet metal and HVAC contractors across thecountry, is facing tremendous challenges from the falteringeconomy and downturn in the construction industry.

Boyer Metal’s solution? Continue to deliver detailed,quality work and push further into the still-emerging “green”residential market, which currently accounts for only about2% of the contractor’s work.

“Our goal is to focus more on the green projects in bothresidential and commercial markets and to increase ourshare of the work,” says Emy Tice, Boyer Metal’s generalmanager. “We have only worked on a few ‘green’ projects onthe residential side. We want to grow that portion of ourbusiness because we are well positioned with skills andequipment.”

Boyer Metal has already built a strong résumé with sev-eral successful green commercial jobs. One highlight wasthe Applied Research and Development building at NorthernArizona University. When Boyer worked on the project, itwas one of only a dozen Platinum “LEED” (Leadership inEnergy and Environmental Design) buildings in the world.

Created by the U.S. Green Building Council, LEED is acertification program for the design, construction, and oper-ation of high performance buildings. It measures perform-ance in five key areas of human and environmental health:sustainable site development, water savings, energy efficien-cy, materials selection, and indoor environmental quality.LEED Version 3 is set to launch in early 2009.

Boyer Metal also completed the HVAC system for theCollege of Engineering and Natural Sciences building atNorthern Arizona University, which was awarded a SilverLEED designation.

Taking this commercial experience into the residentialrealm has meant Boyer got involved in Sustainable Develop-ment Citizens Advisory committee meetings for CoconinoCounty and the City of Flagstaff and has marketed its serv-ices to green builders and designers.

“Boyer Metal is also promoting high efficiency systemsto our customers,” Tice says. “More people are recognizingthe value of ‘green’ and are willing to pay more for energysavings and future cost savings, even with the recent drop inoil prices.”

One of Boyer Metal’s first green residential jobs was a$2 million home with extensive, high-efficiency HVAC sys-tems. Boyer Metal installed 250 feet of hard duct, 850 feet ofsnaplock duct, three Lennox XC 16 condensing units, threeLennox G61 two-stage variable speed furnaces with sevenzones, air cleaners at each furnace, a heat recovery systemand a special mastic to seal all the joints.

All of this was designed to meet Coconino County Sus-tainable Building Program standards, a voluntary public ini-tiative designed to encourage sustainable and energy effi-cient building practices throughout northern Arizona. To get

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Bring in the

GreenArizona-based Boyer Metal

Company finds new opportunities in the “green” commercial and

residential markets.

by Steve Grieco

A portion of the hard duct installed in Boyer’s firstgreen residential job.

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certification under this program, all mechanical systems mustpass static air pressure tests.

“It’s got to perform,” says Jim Graves, president ofGraves-Harshman and Company, the general contractor forthe job. He chose Boyer Metal to do the sheet metal workbecause of the contractor’s good reputation for similar greenwork in commercial buildings.

“This was a difficult job,” Graves says, “and Boyer didit well.” He hopes green technologies will help to lead thecounty out of the current recession.

In addition to the county sustainability program, both theCity of Flagstaff and the state require green design for anynew government owned facility. These requirements reflectgrowing public support for green building practices, whichhomeowners are demanding more often.

“Consumers are getting smart,” says Dan Bernardo,Boyer Metal’s residential manager. “They research productsahead of time. They want to know what they’re getting fortheir energy dollar.”

Coconino County also plans to develop sustainabilityand energy efficiency standards for renovations—a marketsegment that accounts for a significant portion of BoyerMetal’s residential work. “When money is tight,” Bernardosays, “homeowners are more likely to invest in upgrades totheir current home, rather than building new.”

According to construction industry consultant John L.Hughes, Jr., green construction—also know as sustainablebuilding—has reached the tipping point. One of FMI’s recentcontractor surveys estimates that about 12% of project back-log could be considered ‘green.’ This total grows to over 20%in a year and approaches 40% in five years.

“Very few things move this fast in the slow-to-changeconstruction industry. The combination of green plus energyconservation plus consumer preference will yield enormousopportunity for the HVAC industry,” says Hughes, who isvice president of FMI Corporation.

Boyer Metal’s Tice says that having SMWIA-trainedcraftsmen is one reason the contractor has been able torespond to increased green demand. Another is the high stan-dards that SMACNA requires its contractors to keep.“Between SMWIA and SMACNA, we have the knowledgeand experience required to work with hard duct in higher effi-ciency green systems.”

In many ways, going green is business as usual for BoyerMetal. “We have always provided high quality, high efficien-cy systems, and that is what the green market is all about,”Tice says. “It is not a whole lot different than what we havealways done.”

Tice hopes the green market is a trend that will stickaround. “It is important for all of us to conserve energy in anyway we can,” she said. “A high efficiency mechanical systemis just one of those important choices.” �

Grieco is a freelance writer based in Blacksburg, Va.

The Northern Arizona University Applied Research andDevelopment building was awarded the LEED Platinumcertification and at the time was only one of 13 LEEDPlatinum buildings in the world.

Profile: Boyer Metal Company

Boyer Metal Company has seen its ups and downs over57 years in business in Flagstaff, Ariz. The current eco-nomic crisis is just another challenge.

Owners Ron and Brian Boyer bought the companyfrom their father, C.O. Boyer, in the early 1980s. Backthen the two of them were doing all the work, includingbidding, installing and accounting.

They significantly expanded the business over theyears by aggressively looking for larger jobs and hiringexperienced project managers. The result was 130%growth in revenue over a three-year period.

At its peak last year, the company had 65 employ-ees, but the weak economy has forced Boyer to down-size quite a bit. Now a leaner company, it is being evenmore strategic in its operations.

“Our fabrication shop has been busier than thecommercial department so the installers have been ableto help out in the shop,” says Emy Tice, Boyer Metal’sgeneral manager. “Our service and residential depart-ments are especially busy during heating season. Theytend to lean on the commercial department in the springwhen work gets slow.”

She says it has been important to be able to devel-op the flexibility to serve diverse markets. “It hasallowed us to weather sluggish economic times,” Ticesays, “especially in today’s climate when we are seeingincreased competition and downward price pressure.”

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In most parts of North America,Union sheet metal controls littleof the residential and service

market. Toledo, Ohio, stands out asan exception.

How did that happen? Onereason is some Ohio cities requirecontractors to have a license towork. This puts union and non-union workers on common ground.

Another reason is that SMWIALocal 33 has made it a priority toorganize in the area. According toReggie Hohenberger, the Local’s presi-dent and business manager, some of thepaid organizers spend 75% of their time work-ing on residential contractors.

It’s not a hard sell. “One of the greatest benefits of unionpartnership in Ohio is our state-of-the-art training centers,”Hohenberger says. “When non-union contractors tour thesecenters, they discover that the per-hour training costs are min-imal compared to other available training options.”

Fran Lanciaux, president of Commercial Comfort Sys-tems Inc., has seen that benefit for himself. “Working withthe union, we know we’re hiring professionals. If I go to

Local 33 and say, ‘Give me qualifiedmen,’ I know they have the

resources to support my busi-ness.”

A third reason is that Ohiocontractors do a lot of advertis-ing to tell potential customerswhat their companies do andwhy they do it better than thecompetition.

“While the economy isstruggling, customers are focused

on getting the most for their moneyand on spending that money wisely,

and we are looking for ways to shore upour bottom line,” Lanciaux says.By focusing more of their attention on the

residential and service markets, contractors can not only sur-vive the inevitable economic downturns, but also they canthrive.

According to Mark Janowiecki, owner and president ofM & M Heating and Cooling (which became signatory in2000), servicing what they install—in both residential andcommercial buildings—has helped the company maintain astable work force and steady cash flow.

Signatory contractorsin Toledo, Ohio, find

success performingresidential and service work.

by Cairine Caughill

Dareto be Different

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“Service contracts ensure that contractors see theircustomers every year, even when times are tough,” saysLocal 33’s Hohenberger. In his experience, evenwhen new residential and commercial builds aredown, service remains constant and can even grow.“Equipment that breaks down doesn’t know arecession. And equipment thatbreaks down needs to be fixed. Inthese tough times, customers areless likely to replace their systems.They rely on service contractors tocoax another year or two out oftheir current equipment, hoping tohave the money to replace it later.”

That’s good news for Local33’s service techs, as none of themhave faced layoffs despite a rougheconomy. In fact, Hohenbergersays he could use 20 more techs.

Another advantage of servicework is that it is consistent year-round, says Lanciaux of Commer-cial Comfort Systems. “We havework even when it is not very hotor very cold.”

Skills for SuccessSkills required for residential and service work are a bit dif-ferent than those needed for commercial work. “You have tobe attentive to electrical, plumbing and gas and other associ-ated items beyond sheet metal itself,” says Lanciaux.

Residential work also requires more of a personal touch.“Commercial customers may be focused on dozens of thingswhile their sheet metal work is underway, but a residentialcustomer only cares that the heat or air conditioning isn’tworking properly,” Hohenberger says.

Janowiecki agrees with the need for people skills whendealing with residential customers. “When your furnace goesdown or your water tank is out or your air condi-

tioning is down, people some-times aren’t very understanding.”

Fry Heating and Air Conditioning hasbeen focused on the residential market sinceits beginning almost 80 years ago. “Thingsare automatically more personal when acontractor is working in someone’s homerather than at their place of business,” saysTom Fry, CEO and owner.

“If you get a commercial project, you might have 5, 10,15, 20 different units up on the rooftop. If you work on 10 or15 residential units, you will have to talk to 10 or 15 differenthomeowners.”

Fry has found that homeowners have different personal-ities and different needs. “Some want a little bit of handhold-ing and to be kept apprised of each step of the process. Oth-ers simply want the job done quickly.”

He calls it just plain good customer service. “We treatpeople—and their property—the way we would want to betreated.” His philosophy is to get the work done the first time,and the referrals will come.

It seems to be a philosophy that works, because many ofhis current customers are the children, grandchildren, andgreat-grandchildren of his grandfather’s customers.

Thinking at M & M Heating and Cooling is similar.The contractor uses a live receptionist and computer-

ized dispatch boards to handle approximately12,000 annual service calls.

Another practice the company uses isscheduling two-hour windows for serviceinstead of the five-hour windows that somecompanies use. “Instead of having all of ourservicemen work in all areas, we assign oneor two men to each zip code, so they don’twaste time driving across town,” saysJanowiecki. �

Caughill is a freelance writer based in Ontario,Canada.

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In October 1999, during SMACNA’s annualconvention—held that year in Waikoloa,Hawaii— a group of residential contractors gatheredto discuss the formation of a peer group.

Residential peer groups had been tried before, but because partici-pating contractors had always been primarily commercial contractors, thegroups had failed to adequately address issues and concerns confronting resi-dential contractors.

A new peer group formed that year on Hawaii’s Big Island, and it has met annually since then,visiting the facilities of each of the members. In May 2009, they will have completed visiting eachmember when they go to Burlington, Iowa, the home of Frank Millard Company and its president MacCoffin.

We caught up with Coffin, Butch Welsch of Welsch Heating and Cooling of St. Louis, Randy Novak of NovakHeating & Air Conditioning of Cedar Rapids, Iowa, and Russ Kimball of Evergreen State Heating & AC ofEverett, Wash., to discuss the group and its accomplishments and plans.

Power of ManyResidential contractors worktogether to address issues and concerns confronting their market.

by Skip Maloney

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PIP: How would you describe the impetus for starting thisparticular peer group?

NOVAK: It started with the question of how we become bet-ter contractors and how we service our customers better andimprove the market share.

WELSCH: Mac (Coffin) and I were members of a peergroup in another organization. Our companies were largerthan any of the other contractors, and we didn’t have a lot incommon with them in terms of size and nature of the con-tractual arrangements.

COFFIN: Butch (Welsch) and I went through quite a fewyears working with those other peer groups, but there werenone that really focused on the residential market. Butch hadalways wanted to get a group together.

PIP: How does the group actually work?

NOVAK: We get together once a year at the site of one of thecompanies in the group. We purposely chose contractors thatdon’t compete with each other. We go to one of the compa-nies, where we’ll do things like meet with the employees,make job site visits, look at the company’s financials andmake suggestions on how to improve.

WELSCH: The basic format is very similar to the peergroups that we were involved with before. Normally, we’ll goin on a Thursday evening, have dinner and talk about whatwe’re going to do. That part of it is very informal. On Friday,we’ll meet for the first half of the day, dividing up aspects ofthe business and choosing areas we’re going to look into.

Typically, either the company we’re visiting is looking forspecific input, or one of us in the group will have moreexpertise in a certain area and can help there. Sometimes thecontractor will ask us to look specifically at the financials orsales and then we’ll walk around and meet with the peopleand the managers.

COFFIN: Many times when we go, companies will havethree or four things that they ask people to concentrate on. Weonly spend a day out of the two doing this. The other day (Sat-urday), we spend on whatever (broader or national) issueseverybody wants to discuss.

WELSCH: On Friday afternoon, we’ll have a “salt andsugar” session.

PIP: Salt and sugar?

WELSCH: We’ll bring in the management people and talkabout the good things we’ve seen. That’s the sugar part.

COFFIN: Part of the process is to hear about all the goodthings and then, all of the other things. What you want to hearis the other things, because that’s where your weak spots are.The group will talk to office staff (for example) and often getinformation that the owner is not normally going to hear.

WELSCH: The important thing you’re looking for from thewalk-through is the “salt,” the areas that need improvement.

PIP: Do these salt and sugar sessions ever get heated?

WELSCH: One of the ground rules of the process is that thepeople from the company cannot argue or be defensive. Theycan ask questions, of course.

PIP: Did you encounter any resistance to this from theemployees?

NOVAK: The only resistance is convincing employees toshare anything and everything. People get a little guardedsometimes. Part of the success of those first couple of meet-ings was that people got comfortable with each other, know-ing that we weren’t discussing things like payment of officestaff or owner salaries or anything like that, rather about howwe can improve productivity, from issues like safety to salesto field operations. It’s pretty comprehensive.

KIMBALL: There have been some challenges involved.Some of the feedback is intense, particularly from employees.There’s a certain level of fear, but after they get over the ini-tial shock of it, they typically buy into it.

PIP: Have there been any overriding lessons you’ve learnedfrom being a member of this group?

WELSCH: It’s not a single thing. It’s a whole lot of thingsthat were pointed out. Among the contractors who areinvolved with this group, most will tell you that the thingsthey learned were things they already knew, but it’s especial-ly good to have people come in and tell your employees. Itmay be something that the bosses talked about but just nevergot done. Employees will buy into a change more when it’snot just the boss talking about it.

COFFIN:You pick up little points that a company’s doing thatyou might be doing; everything from business to fabrication toshop atmosphere. You can pick something up from everyonethat you can apply to your business and make things better.

KIMBALL: First of all, for me, when I bought the company10 years ago, I had never set foot in an HVAC company. TheBig Island convention was my first, so it was employees edu-cating me about being an owner, leader and manager. The

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Peer Group Members

Russ KimballEvergreen State Heating & A/C2120 Pacific Ave.Everett, WA 98201425-252-3114

Rick SpinelliBryant Air Conditioning420 B. Wyandanch Ave.West Babylon, NY 11704631-491-0061

John HarmonBuilders Heating4633 W. 138th St.Crestwood, IL 60455708-385-7774

Jim KlopfensteinDay Heating225 Divison St., NESalem, OR 97301 503-363-4822

Mac CoffinFrank Millard CompanyPO Box 278 Burlington, IA 52601319-752-4571

Randy NovakNovak Heating & A/C56-16th Ave., SWCedar Rapids, IA 52404319-364-4626

Bob TuckAtlas Heating & A/CPO Box 8467Oakland, CA 94662510-893-1343

Jeff LaskiS & M Heating Sales Co.23262 Telegraph Rd.Southfield, MI 48033248-352-4656

Brian FluetschSunset Air, Inc.5210 Lacey Blvd.Lacey, WA 98503360-456-4956

Butch WelschWelsch Heating & Cooling2175 Welsch Ind. Ct.St. Louis, MO 63146314-872-8070

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group has visited me twice, and the second visit was prettyoverwhelming.

Feedback I got was as tough as anybody’s, and it was muchmore about me, personally. It was hundreds of little things—flat rates, GPS tracking devices, making things more effi-cient in sales and marketing, selling maintenance trackingleads, more efficient site work. The biggest thing, I’d say, hasbeen in the service and marketing, where, on the residentialside, we’ve had the most input.

COFFIN: Maybe you’ll see a tool or a sales approach anda light will go off. You’ll think, “Wow, I never thought ofdoing things that way before.”

PIP: Has anything about what you’ve learned from being amember of this peer group surprised you?

KIMBALL: I’ve been surprised that it’s held together aslong as it has. For us, the process has been more evolution-ary than revolutionary.

COFFIN: What surprised me is that the new group is veryfocused on what they want to do, and they’re really in tuneto the process. It’s not stale. There’s a lot of dedication to get-ting together. Everybody goes. We’ve got companies fromthe East and West Coast, so there’s a lot of travel involved. Ifyou’re coming to Washington State, for example, from NewYork, that’s a big commitment.

PIP: What do you see as the future of this particular group?

COFFIN: It’s a very strong group right now. As long as themembers want it to happen, it will continue. I don’t seeincreasing the size of the group. It’s about as big as it can beand still be efficient in meetings. There will be turnover,though. When we were in that other group, we saw the valueof adding new blood instead of letting things get stale—say-ing the same things over and over.

KIMBALL: Since we’ve started, we’ve had one memberleave and three others join.

COFFIN: If it doesn’t continue to evolve—to get new peo-ple for the interjection of new ideas—it’s going to die. Yousee that in any organization.

PIP: What might you say to a group of contractors that wasconsidering the formation of a similar group?

NOVAK: It’s one of the single best decisions I ever madesince I got into the business in 1984. �

Maloney is a freelance writer based in North Carolina.

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Got Work?We’re Ready

ITI’s residential and service work training supports contractors’ market expansion efforts.

by Cari B. Clark

Skills required for technicianswho perform residential andservice work are not exactly the

same as for those who do industrial orcommercial projects, says Cary Norberg,HVAC specialist for SMACNA andSMWIA’s International Training Institute(ITI).

“Residential HVAC workers need tobe able to work alone—unlike most com-mercial and industrial technicians, as wellas part of a team,” Norberg says.

Other skills he thinks residential sheetmetal workers should have include inde-pendent decision making, collaboration,punctuality, and dependability. “Develop-ing these abilities is important becausecontractors put a lot of trust in and give alot of responsibility to their service work-ers,” Norberg adds.

Such concerns are why ITI developed aresidential curriculum to augment its corecurriculum. “It’s as real life as possible andbuilt with the mindset of gaining marketshare,” says SMACNA contractor Jeff Laski,who served on the ITI Residential Curricu-lum Task Force.

“Our JATCs wanted a true residentialprogram, and this four-part, 300-hour course fills the bill. Itteaches the techniques swiftly, covers all of the disciplines,and is a win-win for everyone.”

Part one of the program is the New Construction Installersegment. It covers actual placement of a new system in ahome, from rough-in work to construction ductwork installa-tion, and how to properly set HVAC equipment.

In part two, students learn to become aFinish Installer. They gain knowledge of howto perform furnace and air conditioninginstallations, including how to hook anHVAC system to various electrical and othersystems; how to charge, start up, and test asystem to ensure that it is working properly;and how to install accessories such as aircleaners, humidifiers, and special thermo-stats.

Part three trains students to becomeRetrofit Technicians, which means theylearn about dealing directly with cus-tomers and how to work with existing con-ditions in homes. Technicians who com-plete the program must have communica-tion and people skills and be able toinstall replacement equipment, add airreturn vents, and know how to deal withdifferent surface finishes, such as hard-wood flooring and tile.

In phase four of the program, stu-dents achieve Service Technician status.In addition to those things learned dur-ing phase 3, technicians must have diag-nostic skills and be able to do somewiring and sales. “An ITI-trained Serv-

ice Technician is self-confident and professional,capable of dealing independently with customers as a repre-sentative of the contractor,” says James Shoulders, ITI admin-istrator.

“We tell them exactly what they need to know and do ina way that makes learning easier and more effective,” Shoul-ders adds. “There’s not a lot of fluff.”

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Teamwork TurnsLeads into Sales

When residential and servicedepartments build bridges,even economic woes can’t

hold them back.

by Cairine Caughill

Effects of the economic slowdown arerippling across the continent (and theworld), and the sheet metal industry

is not exempt. However, while new con-struction and new installations haveslowed, the retrofit market is booming.

“Rather than building or buying newhomes, people are investing in their cur-rent residences,” says Brian Fluetch, presi-dent of Lacy, Wash.-based Sunset Air. “Infact, many homeowners are upgrading toenergy-efficient systems in response to ris-ing prices for electricity, propane, and nat-ural gas.”

Observing this trend—and building astrong relationship between its residentialand service departments—has allowedSunset Air, a family-owned signatory con-tractor, to thrive during both the fat andlean times of the past 33 years.

“We have worked diligently to helpeveryone understand the value they bringto each other’s departments,” Fluetch says.“Service techs—the ones dealing with cus-tomers on a day-to-day-basis—bring inleads, and the residential department trans-lates those leads into sales.”

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Lance Deyette, business representative of Local 66,praises the concerted effort Sunset Air has put into creatingbridges between its service and residential departments.

Thus far, Sunset Air’s strategy has been effective.According to Erik Barrett, Sunset Air’s residential sales man-ager, the average close rate for a lead generated by an ad in anewspaper or on radio is 35% to 40%, but leads brought in bySunset Air’s service department have a close rate of between60% and 75%.

Fluetch says that when a service tech condemns a pieceof equipment, he or she passes the customer details to the res-idential department, along with an explanation of the situa-tion (e.g., no heat). A salesperson takes the lead and contactsthe customer.

If the customer makes an appointment, the referringservice tech receives a SPIFF, or sales commission. If the cus-tomer actually buys some equipment, the service techreceives an additional SPIFF.

“Service techs are already focused on doing what is bestfor the customer, and the SPIFF provides an additional incen-tive for them to shift into sales mode,” Fluetch says.

He thinks that one of the reasons this referral systemworks so well is that service techs are the face of the compa-ny for customers—the only people from the company theysee. “When customers have confidence in the service tech,they’ll likely to trust the salesperson,” he says.

Referrals don’t go one way. Whenever the residentialdepartment installs a piece of equipment, the technician setsup an automatic one-year service agreement. “We hope cus-tomers’ experience during that first year will help them rec-

ognize the importance ofservicing their equipmentannually to ensure reliabil-ity and cost-effectiveness,”Barrett says.

When service techsperform scheduled mainte-nance at the end of the firstyear, they try to sell amaintenance agreementfor the following year. “We

are servicing the equipment that we are selling and installingtoday, so it’s kind of a circle of life,” Barrett adds. “Even with-out a service agreement, when it comes time for replacementsor repairs, there’s a Sunset Air sticker on the equipment,which means there’s a better chance the customer will call usrather than just picking someone randomly from the phonebook.”

Making this system work means creating a mindset ofteamwork, says Sunset Air’s Director of Service DeborahCrosby. She stresses the importance of open communicationbetween the two departments.

“When the service department holds technical trainingclasses, the residential techs are invited. They’re also invitedto service department meetings from time to time. Techs fromdifferent departments are encouraged to call each other foradvice or suggestions when they feel the need,” she says.

Crosby believes this teamwork is also at the heart of therelationship between the union and its contractors. “We tradeinformation, we trade service techs, we even share customerswhen they spanlarge geographicalareas that are outof our normaltravel range. Non-union companiesare separate enti-ties and would notconsider helpingthe competition.”

This team-work is especiallyimportant in theresidential market,where competitionis fierce. “Contractors need every advantage they can get,”says Local 66’s Deyette. “There are many layers to the con-tractor/union partnership, all with the union focusing on howit can help its contractors to survive—and thrive—in the res-idential market.”

In 2004, the Local drastically revamped the residentialcontract, changing the pay structure for the apprentices andjourneymen to help give its contractors an edge over non-union shops. Since making that change, they’ve seen signifi-cant growth in their market share.

Local 66 is also working hard to recruit additional resi-dential and service craftsmen. “We are consciously lookingfor people with experience in the retrofit market and pullingthem into the union ranks,” Deyette says.

After all, both Fluetch at Sunset Air and Deyette atLocal 66 both acknowledge that teamwork—betweendepartments or between labor and mangagement—is thebest way to thrive during the good times and survive duringthe lean days. �

Caughill is a freelance writer based in Ontario, Canada.

“The average close rate for a leadgenerated by an ad in a newspaper

or on radio is 35% to 40%, butleads brought in by Sunset Air’sservice department have a closerate of between 60% and 75%.”

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Best Practices for Residential and Small Commercial Building HVAC

Diagnostic tools and state-of-the-art techniques can’t improve performance insmall commercial and residential HVAC systems unless the technicians whoinstall those systems have proper training.

It’s a big issue in California, which has adopted Title 24—strict energy efficiencystandards to respond to California’s energy crisis, reduce energy bills, increase energydelivery system reliability, and help improve economic conditions in the state.

“We want California contractors to understand that their business is driven by Title24,” says Davor Novosel, Chief Technology Officer for the National Center for EnergyManagement and Building Technologies (NCEMBT).

Since materials and equipment required to train for Title 24 work have not beenreadily available, the California Energy Commission’s Public Interest Energy Research(PIER) program and NCEMBT stepped in to fill the void.

NCEMBT is supported by SMACNA and SMWIA, several private companies, andgrants from the Environmental Protection Agency and the U.S. Department of Energy.It funds research on energy efficiency, indoor air quality, and building security.

Follow the ‘Green’Brick RoadTake a step in theright direction withnew training materialson creating energyefficient installations.

By Cari B. Clark

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At Santa Clara County’s Sheet Metal JATC,humans aren’t the only ones doing the

instructing. The JAC has set up a residentialtraining facility called the House that Teaches.

This 980 square-foot house, built inside Local104’s 52,000 square-foot training facility in SanJose, Calif., has two residential air handlingunits connected to flexible duct air distributionsystems. One system exceeds the require-ments of California’s Title 24, the most far-reaching code for energy efficiency in the Unit-ed States. A second features common installa-tion faults, with higher leakage rates and pres-sure losses.

“Our goal is to demonstrate to technicians, con-tractors, building officials and inspectors vari-ous energy-wasting faults in air conditioningequipment design, selection and installation,”explains Chris Valverde, the JATC’s trainingcoordinator. He lets the house do the teaching.

Apprentices learn from the start that it makessense to properly seal ductwork, use the mostefficient system—which doesn’t necessarilymean the largest or most powerful, and installproducts that cut energy usage, money spent,and greenhouse gas emissions.

These concepts are so ingrained in apprenticesthat they had a hard time installing the house’stwo systems, Valverde says. “The apprenticeswere doing everything a proper installationrequires. I had to remind them that we wantedto demonstrate both ‘good’ and ‘bad’ work.”

Valverde is glad that the concept of installing apoor system is contrary to the way his appren-tices do business, and he’s made sure that allof his instructors have gone through the Housethat Teaches.

“We’re the leaders in our industry,” concludesValverde. “We want to ensure that our work-force is the best-trained out there.”

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“We introduced California Energy Commission staff tothe JATCs in California,” Novosel says. “They wereimpressed by the existing training programs and quicklyagreed to get on-board with the research project.”

Together PIER, the NCEMBT, and Local 104 developedtraining material based on best known practices. First, theyreviewed existing literature and created guidelines and pilottraining programs.

“SMACNA and SMWIA already use good techniques,but I think it’s still possible to improve building energy effi-ciency by another 20%,” Novosel says.

Chris Valverde, training coordinator for Local 104’sSanta Clara County JATC, agrees. “We’re the leaders in ourindustry, and we want to continue to have the best-trainedworkforce out there. The new curriculum opens new skill setsand creates a higher quality of understanding.”

NCEMBT’s Best Practices Guideline for ResidentialHVAC has become the reference piece of a two-part refer-ence/training compendium. It is used in coordination with the“House that Teaches,” a state-of-the-art residential laboratorydesigned to train apprentices in the best practices of HVACsizing, duct system design installation and sealing.

“Once trained in this two-part system, HVAC appren-tices and journeymen can address knowledge gaps in the res-idential market and push the market toward better design,operations and maintenance practices,” Valverde says.

The reference provides an overview of the topics thatshould be included in a JATC or community college curricu-lum. Further, the program provides best practices guidelinesfor commercial building HVAC systems to assist with train-ing on how to properly size, select, install operate and main-tain unitary HVAC systems up to 30 tons.

Using prototype classroom curriculum and the residen-tial training facility, the JATC in San Jose, Calif., offered twopilot training sessions to about 70 apprentices, journeymen,contractors and building officials.

One session focused on best practices for residentialHVAC systems, including performance of air distributionsystems and how they influence energy consumption. Theother concentrated on commissioning of economizers.

“It was a great experience for all of us involved. Wereceived a lot of positive feedback,” Novosel says. “We wereable to demonstrate how all of our jobs fit together in this bigpuzzle—a holistic approach.”

Providing the big picture can help both contractors andlabor understand how to integrate existing practices and newtechnologies in the marketplace. “Both contractors and laborneed to understand that sustainable design and green build-ings are here to stay,” Novosel says. “Energy efficiency andhealthy and productive indoor environments are not mutuallyexclusive.” �

Clark is a freelance writer based in Northern Virginia. For moreinformation on NCEMBT or to download a copy of the report,visit the organization's Web site at ncembt.org.

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California’s Title 24—TheGold Standard in EnergyEfficiencyCalifornia developed its Title 24 energy efficiency stan-dards in response to several energy crises in the early1970s. The government there determined that the state’selectric distribution network was fragile and systemoverloads caused by excessive demand from buildingscould create unstable conditions.

On the other hand, becoming more energy efficient couldreduce energy costs, increase reliability and availabilityof electricity, improve building occupant comfort, andreduce impacts to the environment.

Title 24, implemented in 1978, is updated every threeyears. The latest version takes effect Aug. 1, 2009. Thestandards include:

• Time Dependent Valuation (TDV). TDV energy valuesenergy savings greater during periods of peak demand,such as hot summer weekday afternoons, and valuesenergy savings less during off peak periods. TDV givesmore credit to measures such as high Energy EfficiencyRatio (EER) air conditioning units that are more effectiveduring peak periods.

• Third-party field verification. The standards requirethird-party field testing and verification for installations.

• Fenestration area limit. The fenestration area (disposi-tion of windows and exterior openings) is limited to20% of the conditioned floor area in all climate zonesfor new construction and existing homes subject tocertain alterations; for new construction, limits thewest facing glass to 5% of the conditioned floor area incooling climate zones.

• Duct sealing. Sealing is required when an air condi-tioner/furnace or ducts are replaced.

• Diagnostic testing. Split system air conditioners orheat pumps must be diagnostically tested to verify thatthey have the correct refrigerant charge and that airdistribution ducts have leakage of less than 6%.

For additional information on the Title 24 energy efficien-cy standards, visit the California Energy Commissionwebsite at energy.ca.gov/title24/.

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Aldo Zambetti, training coordinator for Local 19 inPhiladelphia, agrees about the value of the curriculum.Before this curriculum came out, he had to refer to a lot ofdifferent materials in order to turn out residential and serviceinstallers.

“Now, all the resources are in one place, it has a logicalorder and it’s consistent among all the JATCs. When appren-tices say they have completed the HVAC curriculum, I knowexactly what they’ve learned.”

Zambetti also appreciates that students can use the cur-riculum to study even after class. “We have some journey-persons who are coming back and using it to brush up on theirknowledge.”

Tim Donovan, instructor for Local 265 in Carol Stream,Ill., is also positively impressed by the curriculum. “The cur-riculum covers system design, electrical theory, and codes,but also things we used to take for granted, such as customerrelations and personal appearance. This is important in a mar-ket like ours.”

Pat Manning, sales manager for Air-Rite Heating andCooling in North Aurora, Ill., also appreciates the curricu-lum’s emphasis on customer service training. “Since my tech-nicians are essentially my sales staff, I look for excellent tech-nicians who also possess superior customer relations skills.”

He says he has noticed a great improvement in his newapprentices’ ability to communicate. “Homeowners have

expectations when technicians come into their homes. Whena tech is able to inspire confidence and answer a homeown-er’s questions, that customer is happy with the job we do, andhe or she will refer others to us.”

ITI offers an annual Residential Instructor Training class.It is available for JATCs that want to add additional instruc-tors or a residential program to their existing line-up. �

Clark is a freelance writer based in Springfield, Va. Visit the ITIwebsite at sheetmetal-iti.org/careers/res_hvac.shtml for moreinformation about the residential curriculum or the InstructorTraining class.

ITI Adds Self-Paced FormatITI is releasing a Residential HVACSelf-Paced Learning Program thatworks in conjunction with its existingResidential Curriculum. “The pro-gram’s self-paced format allows stu-dents access to the residential train-ing materials outside of the class-room, and at their own pace,” saysITI’s lead residential instructor PhilNewman.

To reinforce the knowledge andskills received by students usingthe self-paced program, there is astudent disc with interactivequizzes covering each unit. Ques-tions were developed from theknowledge checks found in theinstructor-led program.

“The self paced curriculum does a good job of address-ing the needs of smaller JATC’s that have classes withapprentices at different levels. The program also makesit possible for an apprentice to follow a residential careerpath in an area that doesn’t normally offer such training,”Newman says.

As a bonus, this new format allows students who havebeen absent from class to make-up work, advanced stu-dents to complete their studies at an accelerated pace,and slower students to work outside the class to keep upinside the classroom.

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Using an innovative market recovery plan, SMWIA Local 2aims to increase its share of residential retrofit/service workby 50-fold before the end of 2010, says Local 2 businessagent Greg Chastain.

While this plan has been in the works for several years—with costs covered, in part, by the Local 2 Market RecoveryFund—the International Training Institute (ITI) recently gaveit a boost by offering assistance with strategic planning. “ITIselected Kansas City because of its residential potential, pastefforts to regain the residential market, and existing goodlabor/management relationship,” says George Donovan of ITI.

If successful, Kansas City’s plan could provide a blue-print for similar recovery initiatives elsewhere.

One of the first items on the agenda in Kansas City isdevelopment of a Union Contractor Home Services NetworkWeb site that Local 2 hopes will replace the Yellow Pages in theminds of Kansas City union families. “We are targeting fami-lies who have every reason to be union-friendly but who havenot necessarily been calling union contractors,” Chastain says.

Another agenda item has been to secure financing forunion households undertaking HVAC retrofit projects. TheUnited Labor Credit Union—which currently represents about5,000 union households—has agreed to offer its membersloans of up to $10,000 for HVAC retrofit by Local 2 contrac-tors. Further, contractors have agreed to donate the $50 mini-

mum deposit fee for customers who are not currently creditunion members. “It’s an attractive financing option in thesetroubled economic times,” Chastain says.

Local 2 will get buy-in from signatory contractors toensure they can meet the demand for more residential projects.

To meet contractors’ needs for residential service work tech-nicians, Local 2 will offer additional training to its members.

According to Chastain, the long-term effectiveness ofthis pilot program will be determined by (1) the increase inthe number of signatory contractors doing residential servicework, (2) the total number of maintenance contacts that aresold by the contractors, and (3) the number of Local 2 mem-bers performing residential service work.

In the interim, however, Chastain will rely less on statis-tical data to determine success. “It will be a work inprogress,” he says. “I would like contractors to get some jobsfrom this and for union homeowners to take advantage of thefinancing. We aren’t looking for any specific numbers. We’rejust hoping for positive word of mouth.” �

Pierzynski is a Florida-based writer with previ-

ous experience onSMACNA’s staff.

Nonprofit Org.U.S. Postage

PAIDPermit #354

Long Prairie, MNthe sheet metal industry labor- management cooperation fundP.O. Box 221211Chantilly, VA 20153-1211

Take Me Out to the BallgameKansas City’s sheet metal team takes the field to recover residential market share.

by Jim Pierzynski

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