William Vallett Sr. of Lochinvar Corp. pioneered the concept of energy-efficient water heaters during the height of the 1970s energy crisis. His drive to differentiate his company led to the first energy-efficient commercial water heater.
Since then, the water heater and boiler manufacturer has spent considerable resources on research and development to marry energy-efficient technologies with the performance its customers rely on.
In 1992, after 42 years with Lochinvar, Vallett Sr. retired and left the company in the hands of his three sons, Bill Jr., Tom and Jeff. He died on May 4, leaving behind his wife, four children, 20 grandchildren, 18 great-grandchildren and a rich legacy of innovation that is still benefiting our industry.
Before Lochinvar was Lochinvar, it was the Walter Vallett Co. in Detroit. That was back in 1939, when Walter Vallett Sr. started the business to market residential, commercial and industrial water heaters. The company changed its name to Lochinvar Water Heater Corp. in 1957 after acquiring Michigan Tank and Furnace and the Lochinvar brand in 1954.
Walter’s sons, Walter Jr. and William “Bill” (Sr.), were working with him at the time of the name change and helped grow the company. Bill Vallett served in the U.S. Navy during World War II, after which he attended Michigan State University before joining the family business in 1950.
“They were marketing and selling a unique value proposition to the design engineers, consulting engineers and creating a brand,” notes Mike Lahti, vice president of sales, marketing and business development at Lochinvar. “We were creating the pull in the market — creating demand by having these products specified by consulting engineers through differentiation strategy.”
The brothers separated the business in 1979. By then, Lochinvar had relocated to Nashville, TN, and was engaged in pool heating as well as residential and commercial water heaters. Walter Jr. developed a passion for the pool heating side of the business while his brother was much more interested in water heaters.
Bill Sr. built a new manufacturing facility in Nashville — the start of what we know as Lochinvar today.
Energy crisis = energy efficiency
This restructuring was during the time of the second energy crisis of the 1970s. The Middle East oil crisis caused panic and drove up the price of crude oil. People waited in long lines to put gas in their cars. Turmoil made the situation much worse as oil production in the Middle East came close to a standstill. An economic recession hit the U.S. and other countries. It wasn’t until the mid-1980s that oil prices began to subside.
Bill Sr. saw the energy crisis as an opportunity to not only differentiate his company but to be an energy-efficiency leader in the industry, Lahti says. He hired Chief Engineer Jim Smelcer and encouraged him to develop energy-efficient technologies. Taking that direction, Smelcer designed the Lochinvar Power-Fin commercial water heater in 1986.
“At the time, the Power-Fin was a one-of-a-kind product,” Lahti says. “The product redefined efficiency and performance standards, taking efficiency up to 88 percent. It had a small footprint, making it very appealing to get it in and out of tight mechanical rooms. It had diagnostic controls. It had direct-vent sealed combustion. It had things that few others had marketed in the United States before in this kind of technology and Bill brought it to market. It changed the industry, the country and this company. It put us on a growth trajectory that has been incredible — sales increases 37 out of 38 years in a row — all dating back to the start of Bill Vallett’s vision for high-efficiency products.”
Of course, new technology is expensive. Smelcer designed the Power-Fin to take up less space, so consulting engineers, mechanical engineers and contractors liked it because it solved the problems they had. Building owners liked it because it would save on installation costs.
“We had to do a good job of marketing the benefits of energy efficiency and the intrinsic benefits of a better-designed product,” Lahti adds. “Due to the energy savings the Power-Fin offered, it quickly became a highly sought-after product and the subsequent revenue stream enabled Bill to reinvest that money to create a pipeline of new products.”
Product development included adding boilers to the mix. Bill Sr. ensured that Lochinvar continued research and development efforts to push efficiency levels higher for all its products — a priority the manufacturer still has today.
Bill Sr. was a mentor to many people in his company, as well as a fierce competitor in the water heating industry and respected by his peers.
“In our industry, there are a lot of hard-working worthy competitors,” says Dan Sheko, Lochinvar’s national sales manager. “I have heard many compliments over the years about this great company that Bill Vallett was so instrumental in building. I believe those who know our history would say he did a great deal to promote energy efficiency in our industry and that he thought outside the box.”
Tim O’Mara Jr. agrees: “Bill was known by everyone in the industry because he was always coming up with new products, new ideas. There were many out there who looked up to Bill. He was much admired and highly respected.”
Smelcer describes Bill Sr. as “admired and respected as a man of personal integrity, an innovator and relationship builder to his customer base.” Doing what’s right for the customer was an ideal he strived for. The concept is still part of Lochinvar’s corporate philosophy.
As a leader, he put his faith in the people who worked for him, never micro-managing a situation. “Bill always asked questions,” Lahti explains. “He never would come in and say you’re doing something wrong. He had an inquisitive approach. ‘Are there other alternatives we should consider?’ It helped us to look at things a different way.”
He was genuinely interested in his employees and helping them excel in their careers. Bill Sr. saw the potential in them that they may not have realized themselves.
“Back in the old days, when Lochinvar was in Detroit, they decided to move all the department heads to Nashville,” O’Mara recalls. “I was the service/parts manager. I didn’t want to move, so I handed in my resignation. No one said anything to object. On my ‘last’ day, the secretaries had cake and some little gifts. At 4:30, Bill called me into the office and proceeded to say he had listened to me sell Lochinvar to service people all these years. He said, ‘I think you would make a good salesman.’ Larry Keelan, the regional manager, agreed to make me a salesman and here I am, 42 years later, still a salesman.”
Bill Sr. also helped Lahti early in his career. “I’d only been at the company for four years and was at a sales meeting in Nashville,” Lahti notes. “Bill said, ‘Hey Mike. Why don’t you ride with me in the car?’ I rode with him and he asked, ‘How are things going?’ I said they were good. He asked, “Anything you like or dislike?’ ‘No, sir,’ I said. Then he said, ‘Would you like more opportunity?’ And I thought, well, I’m a young 26-year-old kid, so why not? I said, ‘Well, sure.’ Never heard anything else about it until two months later, when my boss promoted me to regional manager.”
Smelcer notes that Bill Sr. was a great innovator and motivator; he had the vision to see beyond what the American water heating industry was doing at the time and set goals to achieve the objectives he set for the company. “I emulated some of his management characteristics later on in my career as a manager,” Smelcer adds. “Bill was complimentary when you did well, a disciplinarian when you messed up. But he never held a grudge as long as you were found to be trying your best.”
Sheko, who has been with the manufacturer for nearly 35 years, was 16 years old when he started a part-time position at Lochinvar. “At the time, Bill Vallett seemed larger than life to me,” he says. “In my part-time position, I was often given the responsibility to drive the company station wagon to Detroit Metro Airport to pick up Bill, as well as others who had flown in. I can still recall many of the conversations, the direction and the feedback that Bill gave me during those airport drives and while interacting at our Detroit facility. I had great respect and gratitude for Bill, so I took every comment to heart and used his advice to do the best job possible.”
For more on Vallett's legacy and Lochinvar's history, click here.