Carrier Context:
Environmental Leaders

Remarks - John R. Lord
Alliance for Energy Efficiency VI Charlottesville, VA - April 30, 1996

Good morning. It is a pleasure to be here in Virginia at the sixth annual Alliance for Energy Efficiency.

We are here to discuss enhancing productivity through health and comfort technologies. I am sure you had an interesting introduction to this topic yesterday. The speakers following me today will give you a more in-depth look at this developing issue.

It is my intent to lay the groundwork, and to discuss these issues through the eyes of someone who has been working at Carrier through the six years of the Alliance. I should note that my point of view has changed during the past year, because my job has taken on a more global scope. That vantage point makes you think differently about these topics because, while all of us would agree the environment has no geographic bounds, I’m not sure they are getting the same level of attention around the world as we give them here.

I was president of Carrier’s residential division in 1990 when the Alliance was launched. The residential division, working with our electronics company, started this program to find ways to meet new federal regulations that were requiring our industry to achieve mandatory energy efficiency levels. We were looking for ways to increase unit efficiencies, as well as finding new ways to zone total systems that achieve even greater energy savings.

Over the past six years, the Alliance has grown and matured while Carrier has expanded its product lines and grown its businesses worldwide.

In many ways, the Alliance has paralleled Carrier’s growth as the product efficiency and environmental leader of the heating, ventilating and air conditioning industry.

When we began in 1990, the average efficiencies of residential products was about 8 SEER. Today, the minimum rating is 10 SEER and we now have products that reach 17 SEER, doubling previous performances and far outstripping minimum requirements. That is an incredible improvement!

When the Alliance started, Congress was about to pass the Clean Air Act and many HVAC industry leaders — including some from Carrier — were concerned that we would have great difficulty adapting to a world without CFCs. Yet it took only four years for us to eliminate those refrigerants from our new product lines. We are now developing products for a second- and third-generation of non-CFC refrigerants that are both efficient and ozone-safe.

For example, we now offer a highly efficient, chlorine-free, turbine-driven centrifugal chiller that is 40 percent more efficient than the units being replaced. Again, that is remarkable progress, especially when you consider we had to apply technology to new refrigerants.

The efficiencies of Carrier’s rooftop units also have taken large leaps. We also have the ability to provide those products with new, chlorine-free refrigerants. Tomorrow, at Haymount, you will see the latest in our environmentally friendly products, and the new residential product that uses a blend of chlorine-free HFCs or hydrofluorocarbons. This product is yet another industry first for Carrier. It achieves strong efficiency ratings.

The steady stream of products we continue to roll out speaks to our seriousness about environmental issues.

In short, almost all the products we sold when this program began have been re-designed, revamped and improved — and all are better for the environment.

When I stop and think about how far we have come in such a short time, I am proud of our progress.

Beyond our products, there have been other significant changes that have occurred at Carrier during the past six years.

Carrier has moved to clean and lean manufacturing methods. We now significantly reduce potential pollution before it is produced, rather than after the fact.

We have led the industry in its acceptance of responsible service practices. All refrigerants are now recaptured, and recycled or reused. HVAC technicians now face criminal prosecution if these refrigerants are vented into the atmosphere. That is a very different way of doing business than we were used to in the 1980s.

All our new product designs seek to eliminate material use. We are building smaller products and, comparatively speaking, offering them for less cost. Where possible, we are employing recyclable plastics. We are using less material because it is less expensive, and because it is the right thing to do.

In short, as the six years of the Alliance has moved forward, Carrier has changed the way it does business — almost always for the better of the environment.

And what has the Alliance been doing during this period of time? It has explored:

We discussed ways to improve partnerships with groups outside the HVAC industry — like those gathered here today — who believe protecting the environment is absolutely the right thing to do.

At Carrier the Alliance has become a corporate-wide affair. And it has been a good thing. It has kept our company’s eyes on these issues, and that is important.

I have attended several Alliances. I was scheduled to speak to you almost one year ago today. I missed that occasion because it was the week I was changing jobs. Sharon gave my speech and I’m sure she did a great job.

What I have reviewed is the good news that the Alliance has brought to Carrier.

But as everyone in this room knows, we have a long way to go.

While government and other leaders applaud the HVAC industry in its drive to produce more efficient products while using more environmentally friendly refrigerants, customers are not breaking down our doors with orders for these products.

Carrier has won awards from states and the federal governments for our efforts, but we have not been rewarded in large measure by mass markets for these products.

For example, two years ago at this very event Carrier introduced the first-ever chlorine-free residential condensing unit. We did not sell many units, in large part because they were more expensive since the refrigerants cost more, and the product required special compressors and larger coils to ensure appropriate efficiency levels. Customers balked at paying a significant premium to be green.

Slightly more than a year ago we introduced the most efficient chlorine-free rooftop product. It has not been a large seller.

We recently introduced the world’s most efficient chlorine-free centrifugal chiller, to rave reviews. I hope it becomes the industry’s best seller, but at this stage, there are many building owners who remain focused on first-cost for chillers, as opposed to life-time cost analysis. This is an area where we have to continue to educate customers who still buy less efficient products because of price.

And then there is the global story.

In my new job, I am fortunate to see our industry from a global vantage point. I have been to China several times in the past 18 months to view our seven joint ventures there. I have traveled to Japan, Korea, Malaysia, Japan and Singapore. I have had trips to see our companies in France, Spain, Italy and the Middle East. I have viewed new start-up ventures in Russia, Kazakstan and Belarus. I have been to Brazil, Colombia and Equador.

Development in so-called under-developed countries is moving at a rapid pace. China is exploding. The vice mayor of Shanghai last year told me there were 6,000 construction projects under way in that city alone. Travel along the coastal cities and you will see similar growth. Inland, there is also significant economic growth, although not as fast-paced. Most of Asia is also experiencing major construction booms, if not at quite the same pace as China.

The issues we discuss here each year have yet to move to many of these markets to any great extent. There are some small markets in the U.S. and some European countries where the first choice is for green products. But on the whole, I contend the mass markets have yet to accept these products or green operating principles.

I ask you, how do we take these issues and impress them upon the worlds markets? How important is it to do this? Whose responsibility is it to drive those messages?

Carrier has certainly attempted to drive these themes, I believe more aggressively than anyone in our industry. We sponsor the Alliance. We chair and help fund the Alliance for Responsible Atmospheric Policy. We chair and fund the U.S. Green Buildings Council. We refuse to sell our old CFC technologies in developing countries, even though we could . . . And even though it means we lose some contracts where cost is the only driver.

Other companies in expanding markets still use CFCs, because they are allowed to. A growing cause of concern in all the developing countries is what we call the "backyarders." Those are small, home-grown businesses that provide some cooling — even if it is inefficient. Their products are cheap, and sometimes, for some customers, that is the deciding factor.

I would also point out that in some countries illegal CFC imports are common. In the U.S. we are cracking down on these illegal imports, but I have not heard of any other country attempting tough enforcement measures.

The debate about global warming continues to heat up, and I’m not sure where it will take us in the end. Last fall I spoke at the International CFC and Halon Conference in Washington D.C. My message then was that government and business have to ensure that we work together on this complicated and confusing issue. Country-by-country legislation in this arena will be very counter-productive to global companies like Carrier.

How do we fix this?

We fix it by educating consumers. That is what the Alliance for Energy Efficiency is all about.

We have our industry’s editors and reporters at the Alliance every year to discuss these issues, and hopefully inform our industry through this process. I think it is incumbent upon all of you to really learn these issues and report on what they mean, and what is happening in both the US. and beyond our borders. I would challenge you to do more — as we try to.

This audience also includes governmental leaders and business leaders. I know that we have our hands full here in the U.S. and things are not perfect. But I would tell you that I believe we are farther along on these issues than most. I travel to some countries where the spoken word is tougher and greener, but where the enforcement seems to be lacking. Can we take the lessons learned here and apply them on an international basis? How do we translate the best practices abroad?

At Carrier, we have attempted to take this message global. We have had some outstanding successes, in areas like Europe and the Middle East. But taking this message global — to new markets that are just taking off — is much easier said than done.

As a leader of a global company, I can tell you our geographic divisions are significantly different. In fact, their products are sometimes significantly different. We have found very few so-called global solutions as we have attempted to drive best practices through our company.

In the meantime, the Alliance continues to push the envelope, and do what it can in its own way, to better inform the public about the options available.

Today, we are talking about the issue of productivity, and its relationship to comfort and indoor air quality. The relationship is clear. Selling productivity makes sense.

In fact, discussions today will mirror those brought forward by our industrys founders — including Dr. Willis Carrier. As he hawked his new products in the early 1900s, he sold cooling to theaters and restaurants on the premise that their seasons would be extended and their profits would be increased if their customers were cooled.

Our industry’s pioneers traveled around the world selling comfort as a means to increase productivity in warmer climates. It was successfully argued that comfort cooling would promote development and commerce in areas previously thought to be too hot for either. We are now projecting that in the year 2000 19 of the world’s 22 mega-cities, that is cities with populations greater than 10 million people, will be located in latitude bands of 35 degrees north and 35 degrees south — close to the equator.

Dr. Carrier founded a business and an industry by selling a product based on the fact that people can do more when they are cool and comfortable. His products helped medicine improve. His products allowed food to be transported, and standards of living to be raised throughout the world.

Now, as we enter the next century, Carrier is poised in a similar leadership position. This conference and issues now being launched — like the productivity connection — seek to inform the public that productivity will come through better and cleaner comfort.

The issues have matured from simply supplying heating and cooling to providing the cleanest air, the most efficient products, and individually tailored and integrated solutions that combine with other building elements to create more productive environments.

There are similarities between what Carrier is doing today at this conference, and what Dr. Carrier did to launch an industry. However, the difference is that we all have learned so much more since then. We understand, in retrospect and with the benefit of science, that some of the products used previously were not the best available for the overall environment. We have adapted and changed.

What we have to ensure — by meeting and keeping these issues in front of us — is that we are always doing what is right — that we are pushing the envelope to find better solutions. Then we have to figure out how to convince the consuming public that those solutions are the right ones. And finally, we have to make that message global.

It is an ambitious effort — but someone has to do it. I would suggest that someone is in this room. I am proud we continue working together on these issues. Thanks for working with us.

( top of page | back )