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APPENDIX 12A. MANUFACTURER INTERVIEW GUIDE

TABLE OF CONTENTS

12A.1 COMMERCIAL CLOTHES WASHERS .....................................................................1
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APPENDIX 12A. MANUFACTURER INTERVIEW GUIDE

12A.1 COMMERCIAL CLOTHES WASHERS

Commercial Clothes Washer Rulemaking 

Manufacturer Impact Analysis Interview Guide for 

Commercial Clothes Washers

May 1, 2013
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The U.S. Department of Energy (DOE) conducts the manufacturer impact analysis (MIA) as part 

of the rulemaking process for amended energy conservation standards for commercial clothes 

washers (CCWs). In this analysis, DOE uses publicly available information and information 

provided by manufacturers during interviews to assess possible impacts on manufacturers due to 

amended energy conservation standards.

The DOE is currently reviewing a set of efficiency levels for front-loading CCWs. The 

efficiency levels are presented below as they apply to the front-loading CCWs. For top-loading 

CCWs, the DOE is seeking input relative to the range of efficiency levels that have been certified 

in the DOE’s Compliance Certification Database since the previous standard went into effect on 

January 8th, 2013. In responding to this questionnaire, please refer to the modified energy factor 

(MEF) and Water Factor (WF) values described below.

DOE is requesting information on the product classes in the table below.

Table 1.1 Efficiency Levels Under Consideration for Front-Loading Commercial Clothes 

Washer Analysis

Efficiency Level

Efficiency Level 

Source

MEF 

ft3/kwh/cycle

WF 

gal/cycle/ft3

Baseline DOE Standard 2 5.5

1 CEE Tier 2 2.2 4.5

2 CEE Tier 3 2.4 4

3 Maximum Available 2.6 3.7

Table 1.2 Efficiency Levels for Top-Loading Commercial Clothes Washers Listed in DOE 

Compliance Certification Database 

Efficiency Levels Listed in DOE Certification 

Database

MEF 

ft3/kwh/cycle

WF 

gal/cycle/ft3

Baseline 1.6 8.5

1 1.65 8.4

2 1.7 8.4

3 1.75 8.4

4 1.85 6.85

 

1 KEY ISSUES

1.1 In general, what are the key issues for your company regarding amended energy 

conservation standards for commercial clothes washers?
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1.2 Are any of the issues more or less significant for the front-loading versus top-loading 

product classes? 

1.3 Do any of the issues become more significant at higher efficiency levels? 

1.4 Do you have any suggestions for incorporating any of these issues into the DOE’s 

engineering analysis or manufacturing impact model? 

2 COMPANY OVERVIEW AND ORGANIZATIONAL CHARACTERISTICS 

DOE is interested in understanding manufacturer impacts at the plant or profit center level 

directly pertinent to commercial clothes washer production. However, the context within which 

this profit center operates and the details of plant production are not always readily available 

from public sources. Understanding the organizational setting around the commercial clothes 

washer industry profit center will help DOE understand the probable future of the manufacturing 

activity with and without amended energy conservation standards.

2.1 What percentage of your commercial clothes washer manufacturing corresponds to each 

product class, in terms of both revenue and shipments? Please indicate if you do not manufacture 

products in any given product class. Please also indicate whether you purchase your commercial 

clothes washers from other manufacturers, and whether the factory that supplies the products is 

located in the United States.

Table 12.1 Commercial Clothes Washer Revenue and Shipment Volumes by Product Class

Product Class 

Number 

Product 

Type

2012 

Revenue

2012 

Shipments

% 

Made

% 

Bought

% Made in 

U.S.

1

FrontLoading

2

TopLoading

2.2 What is your company’s approximate market share in the commercial clothes washer 

market, for each product class?

3 ENGINEERING AND LIFE-CYCLE COST ANALYSIS

3.1 Please describe the key design features associated with products at the baseline efficiency 

level as well as design features and associated costs that would be necessary to reach the

incremental efficiency levels listed below.
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Front-Loading Commercial Clothes Washer Incremental Costs

MEF

(ft3/kWh/cycle)

WF

(gal/cycle/ft3)

Estimated

Incremental 

Cost 

Description of Design Options

2.0 5.5 --

2.2 4.5

2.4 4

2.6 3.7

Top-Loading Commercial Clothes Washer Incremental Costs (Exploratory Efficiency 

Levels*)

MEF

(ft3/kWh/cycle)

WF

(gal/cycle/ft3)

Estimated 

Incremental 

Cost 

Description of Design Options

1.60 8.5 --

1.65 8.4

1.7 8.4

1.75 8.4

1.85 6.85

*These top-loading efficiency levels are exploratory only. Since the effective date of new standards on January 

8, 2013, top-loading models at these efficiency levels have been certified to DOE and listed in DOE’s 

Compliance Certification Database. Information obtained for each of these efficiency levels will help DOE 

define the specific top-loading efficiency levels to be considered during this rulemaking. 

3.1.a Are the proposed efficiency levels appropriate?

3.1.b Are the “max tech” efficiency levels appropriate? If not, can you suggest more 

appropriate max-tech levels?

DOE published a revised clothes washer test procedure, “Appendix J2”, which will be required 

for use beginning March 7, 2015. Among other changes, Appendix J2 does the following:

 Incorporates standby power energy into a new metric, Integrated Modified Energy Factor 

(IMEF)

 Incorporates the water consumption of all wash cycle temperatures into a new metric, 

Integrated Water Factor (IWF)

 Amends the capacity measurement for top-loading clothes washers

 Amends the definition of the energy test cycle

DOE has proposed to translate current MEF/WF standards into their equivalent IMEF/IWF 

values based on comparison testing of clothes washer models currently on the market. Any new 

standards as a result of this rulemaking will be defined in terms of IMEF and IWF.
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3.2 Please comment on any issues related to the new DOE clothes washer test procedure as 

applied to commercial clothes washers:

3.2.a Standby Power

Is the standby power measurement procedure in Appendix J2 appropriate for measuring 

the standby power associated with all types of control systems available on commercial 

clothes washers? 

Is there a relationship between standby power energy consumption and the overall 

efficiency level? (i.e. Does standby power energy consumption tend to increase or 

decrease as overall machine efficiency increases?)

Will the inclusion of standby power affect the design options currently used to reach 

higher efficiencies?

3.2.b Capacity Measurement Method

Will the revised capacity measurement method for top-loading clothes washers affect the 

design options you use to reach higher efficiencies?

3.2.C Energy Test Cycle Definition

How will the changes to the energy test cycle definition change how your clothes washers 

are tested? Will this revised definition limit the design options available for reaching 

higher efficiencies?

3.2.d Consumer Use Factors

Are the consumer usage factors within the test procedure consistent with actual consumer 

use of commercial clothes washers? These include the following:

 Temperature use factors

 Load usage factors

 Dryer usage factor

Can you provide any non-proprietary data related to consumer use of different cycles?

4 MARKUPS AND PROFITABILITY

One of the primary objectives of the MIA is to assess the impact of amended energy 

conservation standards on industry profitability. In this section, DOE would like to understand 

the current markup structure of the industry and how amended energy conservation standards 

would impact your company’s markup structure and profitability.

DOE will estimate the manufacturer production costs for the two product classes of commercial 

clothes washers. DOE defines manufacturer production cost as all direct costs associated with 

manufacturing a product: direct labor, direct materials, overhead, and depreciation. The 
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manufacturer markup is a multiplier applied to manufacturer production cost to cover nonproduction costs, such as SG&A and R&D, as well as profit. It does not reflect a “profit 

margin.”

The manufacturer production cost times the manufacturer markup equals the manufacturer 

selling price. Manufacturer selling price is the price manufacturers charge their first customers, 

but does not include additional costs along the distribution channels.

DOE estimated a baseline markup of 1.27 for commercial clothes washers. 

4.1 Is the 1.27 baseline markup representative of an average industry markup?

4.2 Please comment on the baseline markups DOE calculated as compared to your 

company’s baseline markups for the commercial clothes washer product classes.

Table 4.2 Commercial Clothes Washer Baseline Manufacturer Markups by Product Class

Product 

Class Product Type

Estimated 

Baseline 

Markup

Manufacturer Comments or Revised Estimates

1 Top-Loading 1.27

2 Front-Loading 1.27

4.3 How are markups and margins determined in this industry? How would revised 

standards potentially impact this pricing/margin structure? Please indicate if profit levels vary 

between product classes or product line. If yes, please explain why.

4.4 One of the possible scenarios DOE uses to model impacts on industry profitability is the 

impact of commoditization of premium products. Because the market disruption caused by 

standards can alter the pricing of premium products, DOE is interested in understanding if 

efficiency is a feature that earns a premium. Within each product class, do markups vary by 

efficiency level? If yes, please provide estimates for your markups by product class and 

efficiency level in Table 4.2 and Table 4.3. 

Table 4.2 Estimated Markups for Front-Loading Commercial Clothes Washers

Efficiency

Level

MEF 

ft3/kwh/cycle

WF 

gal/cycle/ft3 Estimated Markup Manufacturer Comments

1 2.20 4.50

2 2.40 4.00

3 2.60 3.70
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Table 4.3 Estimated Markups for Top-Loading Commercial Clothes Washers (Exploratory 

Efficiency Levels)

Efficiency

Level

MEF 

ft3/kwh/cycle

WF 

gal/cycle/ft3 Estimated Markup Manufacturer Comments

1 1.65 8.4

2 1.7 8.4

3 1.75 8.4

4 1.85 6.85

4.5 What factors or product attributes besides efficiency affect the profitability of 

commercial clothes washers within a product class?

4.6 Would you expect changes in your estimated profitability following an amended energy 

conservation standard? If so, please explain why. 

4.7 What is the structure of your distribution channels and how does that influence your 

markup? Does that change between product classes or across the industry?

5 FINANCIAL PARAMETERS

DOE’s contractor has developed a draft model of the commercial clothes washer industry 

financial performance called the Government Regulatory Impact Model (GRIM), using publicly 

available data. However, this public information might not be reflective of manufacturing at the 

commercial clothes washer profit center. This section attempts to understand the financial 

parameters for commercial clothes washer manufacturing and how your company’s financial 

situation could differ from the industry aggregate picture.

5.1 In order to accurately collect information about commercial clothes washer 

manufacturing, please compare your financial parameters to the GRIM parameters tabulated 

below.
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Table 5.3 Financial Parameters for Commercial Clothes Washer Manufacturing

GRIM Input Definition

Industry 

Estimated

Value (%)

Your Actual (If 

Different from 

DOE’s 

Estimate)

Income Tax 

Rate

Corporate effective income tax paid (percentage of 

earnings before taxes, EBT) 29.2%

Discount Rate

Weighted average cost of capital (inflationadjusted weighted average of corporate cost of 

debt and return on equity)

8.0%

Working 

Capital

Current assets less current liabilities (percentage of 

revenues) 9.5%

Net PPE Net plant property and equipment (percentage of 

revenues) 16.0%

SG&A Selling, general, and administrative expenses 

(percentage of revenues) 11.7%

R&D Research and development expenses (percentage 

of revenues) 2.5%

Depreciation Amortization of fixed assets (percentage of 

revenues) 3.7%

Capital 

Expenditures

Outlay of cash to acquire or improve capital assets 

(percentage of revenues, not including acquisition 

or sale of business units)

2.1%

Cost of Goods 

Sold

Includes material, labor, overhead, and 

depreciation (percentage of revenues) 79.5%

5.2 Do any of the financial parameters in Table 5.3 change based on product class? Please 

describe any differences. 

5.3 Do any of the financial parameters in Table 5.3 change for a particular subgroup of 

manufacturers? Please describe any differences. 

5.4 DOE accounts for one time product and capital conversion costs including research and 

development, as well as capital expenditures for facility changes and the depreciation of these 

fixed assets. Beyond these short term changes in cost structure, how would you expect an 

amended energy conservation standard to impact any of the financial parameters for the industry

over time?
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6 CONVERSION COSTS

Amended energy conservation standards may cause your company to incur capital and product 

conversion costs to redesign existing products and make changes to existing production lines to 

be compliant with the amended energy conservation standard. Depending on their magnitude, the 

conversion costs can have a substantial impact on the outputs used by DOE to evaluate the 

industry impacts. Understanding the nature and magnitude of the conversion costs is critical 

portion of the MIA. The MIA considers two types of conversion costs:

 Capital conversion costs are one-time investments in plant, property, and equipment 

(PPE) necessitated by an amended energy conservation standard. These may be 

incremental changes to existing PPE or the replacement of existing PPE. Included are 

expenditures on buildings, equipment, and tooling.

 Product conversion costs are costs related research, product development, testing, 

marketing and other costs for redesigning products necessitated by an amended energy 

conservation standard.

DOE asks a number of questions to understand the nature and magnitude of your expected 

capital and product conversion costs.

Table 6.1 through Table 6.4 show the MEF and WF for the different efficiency levels analyzed in 

the Engineering Analysis for the product categories covered by this rulemaking. 

6.1 Please provide estimates for your capital conversion costs by product class and efficiency 

level in Table 6.1 and Table 6.2. In the description column, DOE is interested in understanding 

the kinds of changes that would need to be implemented to production lines and production 

facilities at each efficiency level. Where applicable, please quantify the number and cost of new 

production equipment, etc. that would be required to implement the specified design changes. 
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Table 6.4 Expected Capital Conversion Costs for Front-Loading Commercial Clothes 

Washers

Efficiency

Level

MEF 

ft3/kwh/cycle

WF 

gal/cycle/ft3

Total Capital 

Conversion Costs Description

1 2.20 4.50

2 2.40 4.00

3 2.60 3.70

Table 6.5 Expected Capital Conversion Costs for Top-Loading Commercial Clothes 

Washers (Exploratory Efficiency Levels)

Efficiency

Level

MEF 

ft3/kwh/cycle

WF 

gal/cycle/ft3

Total Capital 

Conversion Costs Description

1 1.65 8.4

2 1.7 8.4

3 1.75 8.4

4 1.85 6.85

6.2 Would the changes in question 6.1 be similar across all of your production lines and 

factories for each product class?

6.3 Are there certain efficiency levels that would require relatively minor changes to existing 

products? Are there certain efficiency levels where the capital or product conversion costs 

significantly increase over the previous efficiency levels? Would your answer change for 

different product classes? Please describe these changes qualitatively. 

6.4 For each of the product categories shown in Table 6.1 and Table 6.2, which efficiency 

level changes could be made within existing platform designs and which would result in major 

product redesigns?

6.5 For the efficiency levels put forth, which design options would require only minor 

changes to production lines, major changes to production lines, substantial modifications to 

existing facilities, or the development of entirely new manufacturing facilities? 

6.6 What level of product conversion costs would you expect to incur at each of these 

efficiency levels for each product class? Please provide your estimates in Table 6.3 and Table 6.4 

considering such expenses as product development expenses, prototyping, testing, certification, 

and marketing. In the description column, please describe the assumptions behind the estimates 

provided. 
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Table 6.3 Expected Product Conversion Costs for Front-Loading Commercial Clothes 

Washers

Efficiency

Level

MEF 

ft3/kwh/cycle

WF 

gal/cycle/ft3

Total Product 

Conversion Costs Description

1 2.20 4.50

2 2.40 4.00

3 2.60 3.70

Table 6.4 Expected Product Conversion Costs for Top-Loading Commercial Clothes 

Washers (Exploratory Efficiency Levels)

Efficiency

Level

MEF 

ft3/kwh/cycle

WF 

gal/cycle/ft3

Total Product 

Conversion Costs Description

1 1.65 8.4

2 1.7 8.4

3 1.75 8.4

4 1.85 6.85

6.7 Please provide additional qualitative information to help DOE understand the types and 

nature of your investments, including the plant and tooling changes and the product development 

effort required at different efficiency levels.

7 CUMULATIVE REGULATORY BURDEN

In assessing the impact to industry, DOE seeks to understand the cumulative regulatory burden 

facing manufacturers. Cumulative regulatory burden refers to the financial burden that stems

from overlapping effects of new or revised DOE standards and/or other regulatory actions 

affecting the same product or industry. In this regard, DOE will consider other regulations 

(beyond energy efficiency) such as materials regulations and building codes that will adversely 

impact the cost to either the manufacturer or consumer. 

7.1 In assessing cumulative regulatory burden, DOE considers the impacts of other 

regulations for which the effective starting date falls within a six year timeframe extending from 

three years before to three years after the proposed commercial clothes washer standards become 

effective. Below is a list of other relevant regulations that could affect manufacturers of 

commercial clothes washers. Please provide any comments on the listed regulations and provide 

an estimate for your expected compliance cost.
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Table 7.6 Other Regulations Identified by DOE

Regulation Estimated or Actual 

Effective Date(s) Comments Expected Expense for Compliance (Millions $)

Residential central air conditioners 

and heat pumps energy 

conservation standards

2013 & 2015 211.6

Residential clothes washer energy 

conservation standards 2015 & 2018 418.5

Residential clothes dryer energy 

conservation standards 2015 95.4

Wine chiller and misc. 

refrigeration energy conservation 

standards

2018

Residential furnace fans energy 

conservation standards 2018

Dehumidifier energy conservation 

standards 2019

7.2 Are there any other recent or impending regulations that commercial clothes washer 

manufacturers face (from DOE or otherwise)? If so, please identify the regulation, the 

corresponding effective dates, and your expected compliance cost. 

7.3 Under what circumstances would you be able to coordinate any expenditure related to 

these other regulations with an amended energy conservation standard?

8 DIRECT EMPLOYMENT IMPACT ASSESSMENT

The impact of amended energy conservation standards on employment is an important 

consideration in the rulemaking process. This section of the interview guide seeks to explore 

current trends in commercial clothes washer manufacturer employment and solicit manufacturer 

views on how domestic employment patterns might be affected by amended energy conservation

standards.

8.1 Where are your commercial clothes washer manufacturing facilities that produce 

products for the United States located? What types of products are manufactured at each 

location? Please provide annual shipment figures for your company’s commercial clothes washer 

manufacturing at each location by product class. Please also provide employment levels at each 

of these facilities.
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Table 8.7 Commercial Clothes Washer Revenue and Shipment Volumes by Product Class

Facility Location Product Types Manufactured Employees Annual 

Shipments

Example Sheboygan, WI Commercial Clothes Washers 200 100,000

1

2

3

4

5

8.2 Would your domestic employment levels be expected to change significantly under 

amended energy conservation standards? If so, please explain how they would change if higher 

efficiency levels are required.

8.3 Would the workforce skills necessary under amended energy conservation standards 

require extensive retraining or replacement of employees at your manufacturing facilities?

8.4 Would amended energy conservation standards require extensive retraining of your 

service/field technicians? If so, could you expand on how your service infrastructure would be 

impacted in general as a result of amended energy conservation standards?

9 MANUFACTURING CAPACITY AND NON-US SALES

9.1 How would amended energy conservation standards impact your company’s 

manufacturing capacity?

9.2 For any design changes that would require new production equipment, please describe 

how much downtime would be required. What impact would downtime have on your business? 

Are there any design changes that could not be implemented before the compliance date of the 

final rule for certain product classes?

9.3 What percentage of your company’s commercial clothes washer sales is made within the 

United States?

9.4 What percentage of your U.S. production of commercial clothes washers is exported? 

9.5 Are there any foreign companies with North American production facilities?

9.6 Would amended energy conservation standards impact your domestic vs. foreign 

manufacturing or sourcing decisions? Is there an efficiency level that would cause you to move 

domestic production facilities outside the U.S.?
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10 IMPACT ON COMPETITION

Amended energy conservation standards can alter the competitive dynamics of the market. This 

can include prompting companies to enter or exit the market, or to merge. DOE and the 

Department of Justice are both interested in any potential reduction in competition that would 

result from an amended energy conservation standard.

10.1 How would amended energy conservation standards affect your ability to compete in the 

marketplace? Would the effects on your company be different than others in the industry?

10.2 Would you expect your market share to change if amended energy conservation standards 

become effective?

10.3 Do any firms hold intellectual property that gives them a competitive advantage 

following amended energy conservation standards? 

10.4 How would industry competition change as a result of amended energy conservation 

standards?

11 IMPACTS ON SMALL BUSINESS

11.1 The Small Business Administration (SBA) denotes a small business in the commercial 

clothes washer manufacturing industry as having less than 1,000 total employees, including the 

parent company and all subsidiaries.a By this definition, is your company considered a small 

business?

11.2 Are there any reasons that a small business manufacturer might be at a disadvantage 

relative to a larger business under amended energy conservation standards? Please consider such 

factors as technical expertise, access to capital, bulk purchasing power for materials/components, 

engineering resources, and any other relevant issues.

11.3 To your knowledge, are there any small businesses for which the adoption of amended 

energy conservation standards would have a particularly severe impact? If so, why?

11.4 To your knowledge, are there any niche manufacturers or component manufacturers for 

which the adoption of amended energy conservation standards would have a particularly severe 

impact? If so, why?

 

a DOE uses the small business size standards published on January 1, 2012, as amended, by the SBA to determine 

whether a company is a small business. To be categorized as a small business, a manufacturer of “other commercial 

and service industry machinery manufacturing” (NAICS #333318, which includes commercial clothes washer

manufacturers) and its affiliates may employ a maximum of 1,000 employees. The 1,000 employee threshold 

includes all employees in a business’s parent company and any other subsidiaries.