March 17, 2010

Interview with Tom Hansch, VP of G. W. Berkheimer, an HVACR equipment 

distributor

In support of the CACHP and Furnace rule making process, DOE representatives met with Tom 

Hansch of G.W. Berkheimer and Talbot Gee, vice president of the trade group HARDI, on March 17, 2010. 

The DOE meeting representatives were Mohammed Khan and Wes Anderson. Rob Carmichael from 

Navigant Consulting also attended and Dave Winiarski of PNNL called in. 

G.W. Berkheimer is a privately held, 76-year old HVAC and refrigeration distribution business 

with 26 branches across three states. The company primarily sells two equipment lines: Goodman and 

Armstrong (Lennox). The Armstrong product is a restricted line, meaning it can only be sold by 

authorized dealers. It also comes with more dealer support, and thus, a higher price point. Notably, 

GWB does not use central distribution, but does use central purchasing, and transfers inventory among 

its branches as necessary. 

Mr. Hansch provided the group with a brief history of the company, discussed the company’s 

lines of business, and described the company’s geographic reach. Other general items discussed included 

the following:

Mr. Hansch indicated that the party that pays for shipping (between the manufacturer 

and the distributor) usually depends on whether an order can fill a truck. If it does, the 

manufacturer typically pays; if not, the distributor pays. GWB usually fills the truck 

because the trucking company allows for up to three stops. However, distributors 

usually have liability for the equipment once it leaves the plant, meaning they incur any 

loss associated with damage during transit. 

Contractors vary in how much inventory they carry. It can be up to 30-60 days worth, 

but the long-term trend has been reduced inventories maintained at the contractor level.

Mr. Hansch described the difficulty his contractor customers had during the 10 to 13 

SEER switch due to space constraints in some applications, usually with respect to the 

coil and increase in condensing unit sizes.

GWB’s customers do a significant number of hybrid heatpump/furnace installations

which are most cost effective when pairing a high-efficiency heat pump with a midefficiency furnace.

The group also discussed several issues surrounding enforcement of regional standards:

Mr. Hansch and Mr. Gee did not know of a practical way to enforce regional standards, 

especially considering the variability of and commitment to building codes in states 

around the country.
Mr. Hansch and Mr. Gee noted that it would not be possible for distributors to know 

where exactly the units sold were eventually installed. Contractors often do not even 

know where a given unit will be installed when they purchase the unit from the 

distributor. It would be nearly impossible and very burdensome to attempt to track 

down where units were installed after the fact. 

To illustrate the difficulty with enforcement, Mr. Hansch pointed to a situation that 

followed Hurricane Katrina in which they received several large orders following the 

hurricane, apparently from contractors ready to move the product down to New Orleans.

Mr. Hansch said that his company does maintain transaction data including the name of 

the contractor firm, for the purposes of product recalls and warranty data, but G.W. 

Berkheimer receives very little information on the end customer.

Mr. Hansch noted the internet sales are also an issue because they do not require any real 

registration.

Mr. Gee emphasized the importance of having an enforcement infrastructure behind

standards. He noted California’s difficulties with permit compliance, as there is no 

market incentive driving contractors to pull permits. Homeowners will request permits 

not be pulled because of the extra cost and time associated with it.

Depending on how manufacturers deal with the EER issue in the southwest region, Mr. 

Gee noted that could bring additional complexities to compliance with regional 

standards.

Mr. Gee noted that regional standards could reduce economies of scale for 

manufacturers, leading to higher prices.

Mr. Hansch and Mr. Gee reiterated concerns regarding the split system nature of central 

a/c and heat pump systems as it pertains to enforcement since the performance of the 

outside condensing unit has more to do with what coil and fan blower it is paired with 

inside the house than on the stated SEER level of the condensing unit alone.