Trane's Gary Michel: Innovation Makes HVAC Industry an Exciting Place

Oct. 31, 2013
A recent discussion with Gary Michel of Ingersoll Rand/Trane covered many topics: from contractors’ influence on the final design of Trane's new TruComfort line, to HVAC industry growth, to how contractors must work to approach and serve customers who are vastly more aware of the HVAC industry in the era of the Internet.

In September 2013 — the year of its 100th Anniversary — Trane released a new line of 18 and 20 SEER speed air conditioners and heat pumps with Trane TruComfort Technology. Trane showcased the TruComfort line during 2013 Comfortech in Philadelphia, and there it won a Product Showcase Award in the Forced Air Cooling category.

On the last day of Comfortech, Executive Editor Terry McIver spoke with Gary Michel, Ingersoll Rand senior vice president and president, Residential Solutions. The interview covered many topics: from contractors’ influence on the final design of the TruComfort line, to HVAC industry growth, to how contractors must work to approach and serve customers who are vastly more aware of the HVAC industry in the era of the Internet.

Q: To what extent did Trane involve contractors when designing TruComfort?
Gary Michel:
“Contractors were been involved in the process of designing the product, but also in pinpointing the need: what would be successful in the marketplace based on what consumers want?

Gary Michel: "The focus on energy efficiency is strengthening. If anything has come out of the last four- or five-year period, it's the focus on what things cost to run."

"We included our contractors in that process, including unit field trials. Trane contractors, field service representatives, and select employees of our contractors have tested them in their homes, so they get to feel the product in its various stages of development.

“Several contractors at Comfortech have been able to give testimonials about how it operates in their homes. We also have dealer advisory groups that in general help us with the business cases of our products: what would be useful in their markets, what are consumers looking for? Then, when we’re developing a new product, we actually bring in our contractor partners, and create a team that’s involved in every aspect of the launch. They sign non-disclosure agreements, but as members of our team, they’re deeply involved. That’s been the key to this product launch. It’s been a valuable experience for contractors, and for Trane.”

Q: How has TruComfort been received at Comfortech?
GM: “There’s an excitement around it. It gives the consumer a great solution for energy efficiency in their homes. This unit provides an average 38% reduction in electricity costs. That’s something contractors can sell. And, the expected price point puts it at a place that’s affordable. It’s really going to change the mid-efficiency/high efficiency market quit a bit.  It combines the comfort of the home for the homeowner along with an electric bill reduction that is unmatched. So the contractors have been real excited.”

Q: Do you see growth in the near future as being more technology-based, or growth that’s based on an overall resurgence of industry sectors?
GM: “The year 2013 has been a good year for the HVAC industry, and for Trane. Our sector has primarily been driven by residential new construction. I don’t think that’s news to anybody. We’ve seen residential new construction and ductless products taking off as well. We expect to see a little more of the same with residential new construction tapering off a little bit in growth rate, but certainly not declining.

“A mid-September report brought good data on the replacement markets, and people wanting to do more. Home values are firming up, and people are feeling better about their investments in their homes. When they do that they feel better about making an investment and that’s only going to be good for the industry.”

The Trane XV20 with TruComfort technology.

Q: It seems as if ‘energy efficiency’ as a consumer demand remains high.
GM: “The focus on energy efficiency is strengthening. If anything has come out of the last four- or five-year period, it’s the focus on what things cost to run. That’s where this TruComfort variable speed product comes in. But it’s also the entire combination of things we put into the system. It’s not just the outdoor unit; it’s the combination furnace and air handler, which we’ve spent time on. It’s also looking at the quality of air in the home. There’s a lot more talk about that as well. Products such as Trane’s CleanEffects; people are starting to take more interest in it. We innovated in that area awhile ago, but people continue to ask for it.”

 Q: Controls are also making homes ‘smarter,’ which provides another avenue for innovation.
GM: “Commercial HVAC has always been about controls, but people are starting to look at their homes that way. I can control my home comfort system from my smartphone, many people can. That’s what people are looking for in residential new construction. I call it the granite of this building boom. People want controls. With Trane’s ComfortLink Control with the Nexia Home Intelligence system (released in 2012), people will have more information and diagnostic capabilities. They’re starting to understand the effect it can have on their quality of life, the operation of their homes and the home’s energy efficiency.”

“That’s the beauty of the new Nexia: you can do as much or little as you want. You can control a light, the thermostat, a lock, and we’ve got all kinds of switches and sensors…it allows you to start thinking about your home, interacting with it, and determining how you want it to be.

The HVAC piece is about energy efficiency and comfort, lighting is for security, and convenience. You can put switches in to monitor those critical systems that otherwise go unmonitored. People are starting to understand that. So it’s twofold: it’s for new construction and retail spaces.

Q: 2013 was the year of Trane’s 100th Anniversary. What have been some highlights of this special year?
GM: “It’s been a great year, a lot of fun. The celebrations have involved our customers, our employees and their families. The 2013 AHR Expo was huge for us. We rang the bell to close the New York Stock Exchange in April for Rueben Trane’s birthday. We celebrated the anniversary not only of Trane’s 100th year but also Thermo King’s 75th anniversary. We’ve had picnics, road shows, and contests. I don’t think I’ve seen employee engagement as strong as it’s been around Trane’s 100th Anniversary. We’ve been celebrating what started with an innovation by Reuben and James Trane. That history of innovation from Trane has continued through the past 100 years. What better way to put a capstone on our 100th year celebration, than to launch an innovative product that consumers want.” 

Q: What do you think is the potential for using alternative refrigerants in homes?
GM: "We’re not a refrigerant manufacturer, but it’s something we stay involved in. At the end of the day, it matters what our contractors need to be involved in that decision. Legislation drives it more than anything else. We need to be prepared, understand the pros and cons, and have products that can operate using different refrigerants. We’re going to weigh in on safety, efficiency, and sustainability. These are the types of things that are important to Trane, American Standard, and Ingersoll Rand. We will continue to be on the forefront of ‘weighing in’. Ultimately, though, we’re always testing, so that ours is an informed opinion.

“But as far as preferring any refrigerant over another right now, there are so many different variables out there. We’re continually testing, trying to understand which are the best in terms of reliability, sustainability, serviceability, safety, and energy efficiency. “

Q: Is it frustrating that legislators don’t seem to seek enough input from manufacturers before they insist there will be a change in regulations?
“We have a voice, and when we don’t have a voice, we have a responsibility as citizens and partners to different government agencies. It’s our responsibility to chime in, and we use the data we have, the things we know. Ultimately, it’s about ‘what is best for the consumer?’ What is going to continue to drive that solution? That’s where we’re focused.

“Second to that is our contractors’ ability to service and supply products. We believe there are two key components: the reliability of the system and the efficiency and sustainability of the system. Those are the things we’re going to weigh in on and continue to weigh in on.

“We participate actively in industry organizations. We’re involved in AHRI, ACCA, and HARDI. We have participants at every level of the organization: the technical groups, government groups and executive committees of these groups. AHRI has a manufacturer focus group. ACCA and HARDI more so on the contractors’ side. We’re trying to be engaged, and when we are, we have people who are called upon as thought leaders, from a technology standpoint. This is true of our residential and commercial brands. We’re very involved.

“We do have a view, and we try to make sure that view is heard. But that’s an informed view, based on what we know technically, from the experts we employ, and based on desires of our contracting partners and consumers.

“As a manufacturer or supplier of these products, we’re in a unique position to provide that input, and to help the government agencies that want to legislate or regulate, to help them understand how they can be informed as well: what’s possible, what makes the most sense, and how will it play out in the marketplace.”

Q: How would you wrap things up, looking at the immediate future?
“It’s an exciting time for Trane. The industry is rebounding. There are real opportunities, in residential new construction, where we’re making some pretty cool inroads in terms of home connectivity space, and in the HVAC space as well. People are looking at their new home purchases a little differently, looking for the things they want and need.

“The other thing that’s exciting is this focus on energy efficiency form the consumer standpoint. But let’s not lose sight of comfort.  A consumer wants the most comfortable environment in the home, along with the best operating costs. And operating cost is a combination of the energy bill I pay, and the maintainability and serviceability of the product. Will it be reliable and run for me?

“These are the problems engineers live to solve. Trane has been solving those problems for 100 years, and we continue to solve problems year in, year out, day in, day out. That’s exciting.”