Since the recession began four years ago, finding a way to keep the doors open and even increase business has been top of mind for business owners in the construction industry. Contractors have taken to creative thinking and risk taking over shutting their doors.
Even before the economic downturn, Sheet Metal Workers Local 36 in St. Louis partnered with the Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA) to create the Service Rebate Program, which provided rebates to customers for air conditioning and furnace service as well as work hours for the union men and women who needed them.
In 1999, $25 rebates were given to customers for clean and check inspections of their air conditioning or furnace units, and more than 6,000 were given that year. By 2003, 17,000 rebates were given to customers. Since the program’s inception in 1998, more than $6 million has been rebated back to the people of St. Louis.
“There’s not a negative to be found. It’s a win-win for the contractor. It’s a win-win for the local. It’s a win-win for the public,” says Steve Kraemer, business agent for Local 36. “It creates man hours pretty much from the start. Some contractors have 6,000 of these in their system they do twice a year. It’s not only good for the homeowners; it generates sales for parts and new equipment.”
Due to the success in St. Louis, Local 265 in Carol Stream, IL initiated the Service Rebate Program two years ago. Because service is typically an annual tradition for many homeowners, contractors see the same customers every year, which creates a steady flow of business. With new construction and renovations still low, service brings money through the door.
“The rebate program has been successful in the sense that it allows our contractors to be more competitive; therefore, it helps increase market share,” says Jerry Porter, business agent at Local 265. “The direct result is more jobs for our contractors and increased hours for our members.”
Pat Hudgens, president of Elgin Sheet Metal in South Elgin, Ill. is a second-generation owner and did what it took to make sure he kept business flowing even when the tide was low.
“The rebate program helps sustain our business; there’s no doubt about it. We had to remodel our business to stay in business. Some of it is coming back, but we had to sustain ourselves some way,” Hudgens says. “A week doesn’t go by where we don’t get a job because of this program. I got one just this morning.” When the program helps the contractors, it helps the workers. When the workers are working and paying their dues, funding of the program continues. The cycle feeds all the pieces of the network. Local 265 made participating in the program easier for its contractors as it put all the paperwork online in March 2011.
“One of the huge things is keeping our local union from being underemployed,” Hudgens added. “This has helped us maintain them to a reasonable amount of hours for the year. It has certainly helped them become fully employed instead of underemployed.”
The customers benefit, too, as the service rebates are commonly supplemented by manufacturer’s rebates as well.
“Customers just realize it’s a 5-to-10 percent savings for them,” Hudgens says. “These aren’t jobs where people are looking to change their equipment because it’s old. They need to change it because it’s broken. This is a huge item in our arsenal.”
For more information about the Service Rebate Program, contact the International Training Institute, the education arm of the unionized sheet metal and air conditioning industry in the United States and Canada, at sheetmetal-iti.org or 703-739-7200.