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At REMCO, They Own It!

May 1, 2012
REMCO, Inc. is built for integrity, quality, and customized service. As an employee-owned enterprise, its employees share a mutual interest in absolute customer satisfaction.

When a company team says, “We own it,” they’re saying they accept full responsibility for a service or product. No excuses will do, and the customer is king. A full accountability mandate is the keystone to the success of REMCO, Inc., Allentown and Mechanicsburg, PA. Here, the philosophy of service “ownership” is ingrained into the hearts and minds of every employee — in part because, at REMCO, the employees do indeed own the company. An Employee Stock Ownership Plan (ESOP) was established in 2002, and included 100% of employees in 2008.

The REMCO (Refrigeration, Electrical, Mechanical Contractor) leadership team believes employee ownership has placed the company, its employees, and their families on a firm foundation — today, and over the next generation of ownership.

“The ESOP creates an atmosphere of caring about the well-being of the company,” says REMCO, Inc. President Ed Mattos. “Employees aren’t just working for someone else, they’re working for themselves, for a common goal. It creates a tighter family atmosphere.” Mattos and Vice President Jai Hoover have worked at REMCO for their entire HVACR careers. They both started as technicians, long before the ESOP. They’ve remained with the company through all kinds of business environments, and are totally committed to everything REMCO stands for.

REMCO’s employee ownership plan has fostered a more creative atmosphere, where a broader range of approaches can be considered with every opportunity or challenge. All employees can speak their mind and be heard, and all have a sounding board for proposing changes.

“We’ve tried to develop a culture of empowerment at the mid-manager level,” Mattos explains. “Each manager is empowered to run their department as a profit center. The board doesn’t get involved in their daily decisions regarding running these departments. They have the flexibility, as long as it’s profitable. They often have to make quick decisions that affect their business models.”

Building a Full-Service Company
REMCO, Inc. was founded in 1977 in Mechanicsburg, PA, as specialists in supermarket refrigeration. Although its initial specialty was supermarket refrigeration and commercial electrical services, REMCO gradually added food service, industrial refrigeration, and residential and commercial HVAC and plumbing services to its roster of capabilities. In 1990, an office was built in Allentown, about 100 miles to the east, to improve service to REMCO’s broadening customer base.

“We started with two electricians, two service mechanics, and one refrigeration construction mechanic, when our primary business was refrigeration service and installation, and commercial electric. From there, we expanded into all the other areas,” says Secretary/Treasurer Marlin Yohn, one of REMCO’s original founders. Two other founders — Walt Hagens and Bill Griffith — have retired, Hagens only recently. Yohn recalls those earliest days as lean, but only for a time.

“Once we moved into equipment sales, the rest fell into place. Our supermarket expertise made us feel right about jumping into other areas within stores, such as HVAC, food service, and plumbing, which was one of the last things we added,” Yohn explains.

The most recent change is the establishing of satellite offices in Pittsburgh and Maryland, to improve accessibility to existing commercial customers in those regions. Today, 160 REMCO refrigeration technicians take to the road each day to serve more than 400 commercial refrigeration customers and new projects across Pennsylvania, Maryland, Delaware, New Jersey, and Virginia. REMCO’s service philosophy: “Never disappoint a customer.”

“‘The customer is Number 1’ was, and remains, a philosophy ingrained in me early in my career by Bill Griffith,” Mattos says. He taught the importance of taking care of the customer.

“We’re looking for long-term customer relationships, and we want to give customers the best possible service that anyone can provide. That’s our goal and our core value. If we don’t take care of the customer, somebody else will.”

REMCO currently employs 370 people across all HVACR segments; however, steady increases in demand can raise that number at any time, most notably in commercial refrigeration. REMCO’s commercial refrigeration customers includes Stop-N-Shop, Giant Foods, Weis Markets, BJ Wholesale Clubs, Kinsley’s Shop Rite, Klein’s Markets, Wegmans, and the Wawa chain of convenience stores.

Diverse Strengths Fuel Prosperity
REMCO’s in-house craftsmen aren’t only great at refrigeration. Their skills include carpentry and electrical construction, and just about anything related to building. Their Allentown office is an example of their various skills, from the attractive oak woodwork and stairway in the lobby, to the various build-outs they’ve added over the years. Those skills have also helped REMCO manage increased supermarket remodeling projects, especially among its big-box customers.

“This year has been phenomenal, primarily due to refrigeration construction,” says CFO Paul Schaeffer. “We were getting new builds and a lot of remodels. We’ve also made conscious efforts for improved cost control, and got the right people ‘on the bus.’”

“The past few years have been unique,” Mattos says, in further describing REMCO’s recent good fortune. “When the economy went south in the beginning of 2010, it was pretty lean, but it seemed that, although consumers weren’t buying new cars or taking fancy vacations, they still were eating well. Our independent grocery stores and chain stores reported that 2010 was a banner year. Box store managers said people were looking for shopping alternatives, which prompted a lot of construction work. So for us, the end of 2010 was a very busy time in refrigeration construction. On the other hand, refrigeration service has been a bit lean, as maintenance departments tightened their purse strings.”

“At the end of 2008, and into 2009, you started to see the housing market decline, and layoffs begin to rise, but a lot of the chains had already established their programs,” explains Vice President Jai Hoover. “Therefore, we weren’t affected. However, at the start of 2010, service work was lean. But since we don’t lay off our workers, we shifted manpower to cover the busiest departments. Since June 2010, we’ve been busy on the construction side.”

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REMCO is operating in a vastly more competitive, cost-conscious arena, and increased customer needs are accompanied by the challenges of a tough economy.

“Customers are educated in the process of negotiating and investigating systems technology. In addition, the supermarket industry itself is competitive, operating on small margins,” Hoover says. “The need to save in various areas of overhead trickles down to contractors.”

Knowing that there are other equally competitive, quality contractors also at work in the “neighborhood,” this company remains alert and ready to respond.

“Continued education and training will help us keep our edge in this market,” Hoover says.

Three time-tested principles that most often separate REMCO from its competitors are:

Integrity: they’ll always do the right thing for the customer, regardless of whether or not it benefits REMCO. Effective service starts with integrity, which is synonymous with “the REMCO way.”

“It’s all about being up front, taking care of customer, doing the follow up work, being certain that everything’s A-OK,” says Rich Hoak, refrigeration service manager.

“Integrity and honesty are the mainstays of the REMCO philosophy,” says 26-year employee Clint Hoffman, a sales representative for supermarket equipment. “Those do more for the relationships we develop than anything. Equipment is equipment, but the contracting company that stands behind what they sell and install separates good contractors from standard contractors. The level of integrity here is unmatched by any other I’ve been around.”

Quality craftsmanship: establish service and installation departments that have no equal. This is brought about by training and a commitment to surpassing customer expectations.

Customized services: this often requires investing in staff, specialized training and unique work schedules. The motto here is, “whatever, wherever, and whenever.”

Technology Experts
Big-box stores and larger chains are driving a move into ‘greener’ technology, which positions REMCO on the front lines of new technology, thanks to its 35 years of experience with commercial refrigeration in many applications. REMCO is an authorized Hussmann dealer, which provides it with access to customized green solutions.

“With a diverse customer base, we get to see what many of the larger chains are doing, and we’ve actually installed much of that equipment. Then, we can take that knowledge to the independent stores who aren’t buying direct from the manufacturers, and educate them as to what we feel is best at that time,” Hoover says.

“For example, we’re working with a large independent store — Kinsley’s Shop Rite— that’s going to use CO2/glycol refrigeration, LED lighting, and many other energy efficient systems, to reach ‘green store’ status,” Hoover says. The Kinsley store is due to be completed in July. Under the leadership of Installation Foreman Barry Recipko, medium and low temperature coolers and freezers are in place, and the majority of the store’s CO2/glycol piping has been installed.

When negotiating new projects, REMCO’s counselor experience helps it address customers’ concerns over first cost, and reach mutually beneficial solutions. “Many customers have true budget restrictions and can’t always do everything they’d like to do. We hope we can provide what they need, so they can be successful with the program,” Mattos says.

“The end-user is always looking for efficiencies from contractors,” he adds. “They’re interested in value engineering from qualified refrigeration contractors as a way to reduce their costs. Technology is changing constantly.”

“With an independent store, you’re looking at an average equipment life of at least 15 years. So, we need to make sure they’re not cutting things out that will cost them more on the maintenance side, which could ultimately exceed the up front cost,” Hoover explains. “If they’re going to cut out critical things that will hurt them down the road, we’ll try to steer them in another direction,” Mattos adds.

The Value of People
“Our people make REMCO what it is,” says Randy Beam, vice president of electrical construction. Beam is a long-time REMCO employee now in a leadership position, who hasn’t forgotten the importance of listening to what the field personnel have to say.

“We listen to everyone’s concerns,” Beam says. “Suggestions are discussed in monthly board meetings. We try to provide an answer, and change some things when new, good ideas come along. Even though many of us have worked up through the ranks, there are some things we might not have seen as necessary to change, not being in the field for awhile.”

“We try to pass that value on as people move up in the ranks. Our goal is to continue the people-based culture,” he says. “We care about their families and their various financial situations. While out in the field, our service excellence mandate includes attention to small details, such as the appearance of our trucks and uniforms, and larger details, such as communication and record keeping.”

Employees reap financial benefits too, through ownership dividends, and a generous bonus program for quality service performance.

“At our March annual meeting, we probably presented $250,000 to employees in awards, bonuses, and prizes,” Mattos says. Five-year employees receive $500 at the yearly event; this year’s total: $13,000. Other gifts for employees included TVs, tools, ipads, and gift certificates.

Training to Stay Sharp
Service training is conducted weekly, and specialized training is offered as available. This could include a visit to a manufacturer, such as Novar, Danfoss, CPC, and others, or seminars through distributors United Refrigeration and Meier Supply, to make sure they have the proper training and certifications.

Rich Hoak, refrigeration service manager out of the Mechanicsburg office, started at REMCO as an 18-year-old apprentice. He then moved up to technician, zone supervisor, and service manager. His responsibilities in managing service technicians and zone supervisors help him remain aware of what new technicians must be able to learn, and what qualities will serve them best in a fast-paced and demanding service environment. He often shares his field observations with local vocational school administrators and students looking to land in a good apprenticeship program.

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“We work with vocational school instructors to ensure their students are learning the most appropriate skills,” Hoak explains. “They come to us with some training in electrical, refrigeration system troubleshooting, and basic system design. It’s a rounded approach to the industry, a good place to start. In addition, I ask schools to make sure the technicians are EPA-certified. We want them to have that certification level before we bring them on board. Once they’re hired, we get them started with apprentice training, which includes supervision by zone supervisors or lead technicians in each region in which they’re working. We don’t release them into their own calls until we’re sure they’re qualified. We also work with them on customer skill levels.”

Constant communication is the mark of a well-functioning team. Nothing is left to chance, nothing is assumed. To that end, weekly service meetings are held in each department to discuss customer-specific requirement. It also serves as a good time to promote customer skills, safety, and talk about changes in customer contracts.

Construction Operations Manager Mark Meckes joined REMCO 17 years ago, in response to an ad for a carpenter. Later, he learned refrigeration, and he now manages installations and remodeling projects. In March, Meckes and his busy team handled about a dozen projects. He and his team are adept at the give-and-take of working with and around customers’ needs related to store operations, which can’t be negatively affected by technician activity. His makes it all come together on-site through technician expertise correctly applied, and cooperation.

“It definitely makes everyone’s job easier, as they learn their roles and become experts at their specialties. And, as far as cooperation, when you show a customer you’re willing to work with them 100%, they’ll go an extra mile too, and perhaps have a broken case emptied before you arrive, little things like that. We work together, and in return, we both benefit,” he says.

Ed Mattos and Jai Hoover never take REMCO’s success for granted. Both come from simple backgrounds, and both learned early in life about the importance of hard work and initiative.

“From Day 1, I found that if you worked hard, you’d have opportunity at REMCO,” Hoover says. “The company has proven that over the years, for myself, and for a majority of our employees.”

“I consider myself lucky to be part of this business called REMCO,” Mattos adds. “It was a great opportunity to be given a chance to add value to the company, and I hope our employees see REMCO as an opportunity for them as well.”

“We’re ‘refrigeration guys’ — that’s what we do,” Hoover says. “Our growth has been fast, but controlled. Every day goes by quickly, but it’s fun. You’ve got to enjoy what you do.”

Company Growth In Step With Regional Expansion
Allentown took some hits in the late 1990s, following the departure of the region’s steel industry. Those days are long gone. Today, business is thriving everywhere you look, from mall stores to numerous small businesses and enterprise parks.

And many of those Allentown and Mechanicsburg business owners — and others throughout Pennsylvania, Delaware, New Jersey, Maryland, and Virginia — are fortunate to have REMCO, Inc. handling their commercial refrigeration needs, as their growth continues. This is a company that’s on the move, in an industry that needs service each and every day. Efficient and dependable state-of-the-industry refrigeration service is a must-have, and REMCO is a must-have commercial refrigeration service provider.

Congratulations to REMCO, Inc., the Contracting 2012 Commercial Refrigeration Contractor of the Year.