AHRI Announces Major Restructuring at 2018 Leadership Forum
The HVACR manufacturing organization aims to reduce its 39 product sections to four sectors and replace its existing executive committee with a 15-member board of directors.
TUCSON, Ariz. — Air-Conditioning, Heating & Refrigeration Institute (AHRI) is reinventing itself.
That was the major announcement to surface from the organization’s inaugural Leadership Forum, Nov. 11-13 in Tucson, Arizona.
Over the next several months, AHRI will aim to reduce its 39 product sections to four sectors.
The entire industry will be represented by four product sectors — Applied, Heating, Refrigeration, and Unitary. Each of the four sectors will be represented by individual leadership councils, which will include as many as 25 members nominated by the membership and approved by the nominating committee. Tasks previously handled by individual product sections will be undertaken by task forces or working groups, which will be formed for a specific purpose and disband once the task is complete.
Initial staff sector leaders include Stephen Yurek, president and CEO, who will lead the Applied sector; John Lanier, COO, will lead the Heating sector; Caroline Davidson-Hood, general counsel, will lead the Refrigeration sector; and Jim Walters, vice president, international affairs, will head the Unitary sector.
The organization also announced it will replace its current executive committee with a 15-member board of directors, which will be comprised of a mix of AHRI members. Large members that pay more than 5 percent of the total AHRI dues and certification fees will have a permanent seat on the board. The remaining seats, which will be selected via a vote of the nominating committee, will be balanced between small, medium, large, and component manufacturers representing the organization’s entire membership base.
Why was change needed?
Approximately 10 years ago, Air-conditioning Refrigeration Institute (ARI) and Gas Appliance Manufacturers Association (GAMA) merged to form AHRI. The board of directors ballooned to nearly 80 people and the product sections ultimately represented 39 different product areas.
Prior to the 2018 Leadership Forum, AHRI staff distributed a survey seeking comments on the state of the organization.
“We asked members a number of questions and got some really interesting responses,” Chris Peel, 2018 AHRI board chairman and president and CEO of Rheem, told the membership at the forum. “We asked, ‘Is AHRI’s current governing structure significant enough to meet industry needs for the next five years?’ Ninety-two percent of you said No. We asked, ‘Should efforts be done to reduce the number of meetings participating members attend?’ About two-thirds of you said yes. Many of you identified that AHRI is too reactive and not active enough on certain industry issues, and the smaller and medium-size members felt they didn’t have enough of a voice in the direction of the organization.”
AHRI leadership created a task force and challenged its members to ensure AHRI is well-positioned to represent the industry now and for the next five to 10 years by increasing its value to members, meeting the dynamic needs of the industry, making it easier and more effective for members to engage in the association, and making the most effective use of members’ time.
John Galyen, president, North America, Danfoss, and vice chairman of AHRI, served as chairman of the task force.
“The big question and concern is will this impact membership and membership’s ability to contribute to the organization,” Galyen asked. “The answer is no. We need to make sure the troops are working on standards and statistics. We’ll be engaging in a similar way. Membership in this organization will still require your engagement. By having very engaged senior leadership on these leadership councils, we can bring a strategic focus and can look at things more broadly. We’re excited to participate in these new product sectors and be engaged in the forthcoming discussions.”
AHRI did not offer a definitive timeline for the changes to occur, stating the association would rather not force the issue to meet a specific date and acknowledged that this project is very fluid in nature.
“We feel this change will better position this organization for the future so that we can better address the needs of this ever-changing industry and world,” Yurek said.
Incoming and outgoing chairmen
Outgoing chairman Peel acknowledged that AHRI pursued a fairly aggressive agenda in 2018.
“One of our first priorities was to leverage the unique window we have with the existing administration to drive regulatory reform and common-sense legislation,” he said. “Our goals were simple — increase process transparency and alignment, promote industry growth, and ultimately drive regulatory predictability as we work toward our shared objectives in environmental sustainability. We had an early win with tax reform, which we all know resulted in a dramatically lower corporate tax rate and, after more than a decade of effort, we succeeded in getting the bonus depreciation provision on commercial equipment included in the bill. That was a proud moment.”
AHRI continues to support the ratification of the Kigali amendment to the Montreal Protocol.
“We believe this would bring about an orderly global phasedown of HFC refrigerants,” Peel said. “This has become more urgent since several states have moved on their own to regulate HFCs.”
Peel also referenced AHRI’s structural changes, calling it an excellent opportunity for business leaders to actively engage in the organization.
“These changes will allow members to become involved in the strategic direction of this industry, more effectively network with their peers, and ensure there is proper linkage between the actions of the association and the needs of the markets you serve,” he said. “For the engineers, I know there’s been a lot of angst about these changes, even from my own team. It’s important that you understand that while the nature of your participation may change, the importance of the work you do for the industry will not. The objective is to make more effective use of your time, not diminish your contributions.”
Peel is confident the changes set forth will help create a stronger and more sustainable industry association that will more effectively support its membership for many years to come.
“As my tenure as chair comes to an end, I appreciate the trust you placed in me over the past year,” he said. “I’m very grateful for the opportunity to have served and thank you for your support.”
Replacing Peel as AHRI chairman in 2019 will be Bill Steel, president and CEO, Bard Mfg. Co.
“AHRI represents 1.3 million employees in our industry every day,” Steel said to conference attendees. “They expect us to bring our A-games. Each of those individuals have families. Do the math — you’re up to 4 million people a day who expect us to bring our A-games. We’re the leaders of this industry. The number of people who rely upon us for their livelihoods, jobs, comfort, safety, and health is unbelievable.”
Under the tutelage of AHRI, Steel said Bard became very familiar with the elected officials representing his community.
“Eighty-five percent of AHRI member companies are classified as small or medium-sized companies,” he said. “That means the vast majority of us will never have a marketing budget to run a Super Bowl TV ad, probably can’t afford a full-time corporate government affairs representative, and wouldn’t know a California state senator if he walked through our front door. But that is where AHRI comes in. While they probably can’t help us finance a Super Bowl ad, they are the perfect outlet to help you and your company become active in federal and state regulatory and legislative affairs. My U.S. congressmen from Northwest Ohio is Bob Latta, who plays an important role in the House Energy and Commerce Committee. At AHRI’s National Advocacy conference, we set up my first visit to Congressman Latta’s office. He’s since visited our Ohio facility twice in the past three months. Those visits and that access to the Energy and Commerce Committee would have never developed without AHRI guiding the process.”
If you ask 100 random people if they’d be willing to give up their hot water, air conditioner, furnace, and refrigerator or their cellphone, 99 of them would choose to keep their hot water, air conditioner, furnace, and refrigerator, Steel said.
“That one dissenting vote would be my 23-year-old daughter who couldn’t imagine life without social media,” he joked. “We can make products that are as energy efficient as possible, but they’ll still use energy. Minimizing our impact is what we’re all about. We must tell that story every chance we get. We make life better is our tagline, and it’s so much more than a tagline; it’s the reality of what we do for people all over the globe every day. You all play a critical role in that. On behalf of all global citizens, thank you for all you do.”