PUBLIC VERSION 

Goodman Section 301, List 1, Addendum 

HVAC Printed Circuit Boards for Air Handlers, Heat Pumps, and Package Units 

Goodman is one of the largest air conditioning manufacturers in the United States. 

Goodman's parent company, Daikin Industries, Inc. ("DIL") is one of the world's leading air 

conditioning, heating and air filtration manufacturers. As discussed below in more detail, 

Goodman and DIL have invested heavily in U.S. manufacturing. OIL/Goodman invested 

approximately a half of billion dollars in a new manufacturing facility in Texas. DIL's 

significant investments in the United States includes more than $7 billion in the last twenty-five 

years, which demonstrates its commitment to making the United States a major manufacturing 

center for its HVAC products. 

As shown below in Section V, Goodman is attempting to resource its products from 

suppliers in different countries. In Section V, Goodman provides specific information about its 

resourcing efforts for the specific product for which the exclusion request is being submitted. 

Nevertheless, qualifying components from new suppliers in Goodman's finished products is a 

very time-consuming and complex process because Goodman's products are regulated by several 

federal regulations and agencies, such as the U.S. Department of Energy and the U.S. 

Environmental Protection Agency. As such, Goodman needs additional time to resource the 

components from suppliers in other countries. Given that Goodman is heavily investing in 

manufacturing in the United States, coupled with the significant impact on Goodman's business 

and the fact that it cannot raise prices for all of items subject to tariffs because its foreign 

competitors are not impacted by the tariffs, Goodman respectfully requests that the USTR grant 

exclusions for the inputs being requested by Goodman. Goodman respectfully requests that it 

not be harmed for investing in the United States and in its U.S. workforce. 
PUBLIC VERSION 

I. Information about Goodman 

At a time when many U.S. companies are moving manufacturing offshore, DIL invested 

in U.S. manufacturing. As one article put it, "DIL is jumping into the U.S. with both feet." 1 Its 

corporate policy is to manufacture as many products as possible in the market in which they are 

sold. Therefore, it prioritizes U.S. manufacturing for its finished products sold in the United 

States. 

In May 2017, DIL and Goodman opened a new $500 million factory near Houston, 

Texas. The Daikin Texas Technology Park ("DTTP") is the third largest manufacturing plant2 in 

the United States. To put it in perspective, its roof covers the equivalent of 74 football fields. 

Goodman anticipates having 7,000 skilled American workers at the DTTP plant by 2020. 

Included within the DTTP is the North American Research and Development Center, which has 

already resulted in a 2.5 times increase in the number of engineers and technical professionals 

employed by Goodman since the acquisition by DIL of Goodman in 2012. The new plant 

centralizes logistics, expands research and development capabilities, and serves as an industry 

leading training center for the small business owners and technicians who install, service, and 

maintain Goodman and DIL HVAC products. 

As the largest production facility in the DIL Group, the DTTP will manufacture as many 

DIL and Goodman products as possible in the United States, including both residential and 

commercial-use air conditioning and heating equipment. The DTTP was established to integrate 

the four factories that Goodman previously operated in the United States, as well as logistics / 

central warehousing operations, engineering / research operations, marketing, customer support 

1 http://evergreenhomeheatingandenergy.com/blog/daikin-investing-heavily-in-us-manufacturing 

2 Based on square footage. 

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PUBLIC VERSION 

and other office activities to provide even greater operational efficiencies within the company. 

Here is picture of the DTTP: 

The new factory showcases a state-of-the-art production technology system that utilizes 

modular production lines that respond to fluctuations in production amount and automatically 

controls production progress by taking advantage oflnternet of Things (IoT) technology. 3 It will 

also serve as a model factory for DIL in adopting the latest technology such as IoT and Artificial 

Intelligence (AI). This cutting-edge system in production technology being introduced in the 

United States will be successively adopted at each DIL production base worldwide in an attempt 

to strengthen the company's overall global production capabilities. 

With the United States being the largest air conditioning market and the birthplace of air 

conditioning, DIL identified the U.S. market as one of the most important regions to pursue in its 

strategic management plan. The company intends to continue investment and job creation in the 

3 JoT, or " Internet of Things," refers to machinery, sensors, and other physical devices that communicate via an 

internet connection to facilitate automation and real-time monitoring of manufacturing and other activities. 

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PUBLIC VERSION 

future while contributing to U.S. development as part of its efforts to strengthen its business 

foundation in this region. 

II. Products that Goodman Produced In the United States: 

Goodman currently manufactures many HV AC products at the new DTTP facility and in 

Fayetteville, Tennessee. Goodman sells these products in all 50 states of the union, as well as in 

U.S. territories, under several brand names including Daikin, Goodman and Amana®.

4 These 

products include ducted and non-ducted air conditioners and heat pumps, gas-fired furnaces, 

single package ("weatherized") air conditioners and heat pumps, packaged terminal air 

conditioners ("PT A Cs"), and "heat pumps, packaged terminal air conditioners ("PT A Cs"), and 

VRv5 units for both the residential and light commercial HV AC markets. In addition to their use 

in the residential and light commercial markets, Goodman's products are also installed in many 

military bases, hospitals, and state and local government facilities throughout the United States 

and across the globe. 6 The following are some pictures of Goodman's finished goods products 

that are produced at DTTP. 7 

4 Amana is a registered trademark of Maytag Corporation or its related companies and is under license to Goodman 

Company, L.P. All rights reserved. 

5 "VR V'' is a registered trademark of Daikin. All rights reserved. The trademark "VR V'' derives from what we at 

Daikin call "variable refrigerant volume," a technology that is known in the industry as variable refrigerant flow 

technology. 

6 For example, Goodman products are installed at [ 

] Goodman has been actively involved in the general upgrade to the U.S. military's housing and comfort 

pursuant to the Military Housing Privatization Initiative of March 2001. Exhibit 1 contains a list of projects for 

which Goodman equipment has been used by the military and various government entities. 

7 Please visit the home pages for our products at https://www.goodmanmfg.com/, https://www.amana-hac.com/ and 

https://daikincomfort.com/. 

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PUBLIC VERSION 

III. Competitive Disadvantage Caused by the Section 301 Tariffs 

As stated above, DIL and Goodman have invested close to a half-billion dollars in the 

DTTP in the Houston area. Unlike many of its competitors, Goodman did not move 

manufacturing offshore. Rather, Goodman invested in U.S. manufacturing and DIL is 

transferring its technology to the DTTP, here in the United States. DIL and Goodman are 

creating a new research and development (R&D) function in DTTP in which local product 

development will be further enhanced. DIL anticipates having 7,000 skilled American workers 

at the DTTP plant by 2020. Already, the investment in R&D, has resulted in a 2.5 times increase 

in the number of engineers and technical professionals employed by Goodman since the 

acquisition by DIL of Goodman in 2012. Moreover, the goal of DIL and Goodman is to 

manufacture as many DIL and Goodman products for the North American market as possible at 

the DTTP. Goodman believes that it is a poster child for what President Trump and this 

administration is trying to accomplish: making U.S. manufacturing great again. 

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PUBLIC VERSION 

At the same time that the tariffs will harm Goodman, its competitors that manufacture 

finished products in facilities outside of the United States will not be impacted by the tariffs. 

Because several other companies that sell HV AC products in the United States have production 

facilities outside of the United States, especially in Mexico, the finished HV AC goods they 

import will not bear the same material costs as incurred by Goodman. Goodman's competitors 

outside the U.S. could continue to source the HVAC components at issue from China, and their 

finished products would not face additional tariffs when sold in the United States. Because of 

the disparity in production costs, Goodman will lose competitiveness against such foreign 

compames. 

IV. Goodman Needs Additional Time to Resource Components Subject to Section 301 

Tariffs. 

As shown below in Section V, Goodman is attempting to resource its products from 

suppliers in different countries. Nevertheless, qualifying components from new suppliers in 

Goodman's finished products is a very time-consuming and complex process because 

Goodman's products are regulated by several federal regulations and agencies, such as the U.S. 

Department of Energy and the U.S. Environmental Protection Agency. As an example of the 

time it takes to identify and qualify a new supplier, Goodman notes the steps necessary to 

recertify a heat pump when the source of the motor is switched to a new supplier: 

• Supplier Initial Qualification: [ 

] 

• Motor performance: [ 

] 

• Individual motor qualification once the design is set: [ 

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[ 

• 

PUBLIC VERSION 

Motor qualification in the heat pump system: In order to sell a heat pump, it must 

be certified by National Recognized Testing Laboratory ("NRTL"),8 a recognized 

safety standard body such as UL or Intertek. [ 

] 

• System Performance: [ 

• Internal Quality & Reliability: [ 

] 

] Nevertheless, as shown in Section V, Goodman is working 

diligently to resource the components for which it is submitting exclusion requests. Section V 

contains the specific information showing the progress that Goodman is making, along with the 

timetable for completing the resourcing. 

Goodman needs time, however, to resource the components from suppliers in other 

countries. Given that Goodman is heavily investing in manufacturing in the United States, it 

respectfully requests that USTR provide it with an exclusion while going through the supplier 

resourcmg process. 

8 NRTLs must be approved per OSHA regulations, reference https://www.osha.gov/dts/otpca/nrtl/nrtllist.html 

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PUBLIC VERSION 

V. Specific Information about Goodman's Efforts to Resource the Component in 

Question. 

Goodman is attempting to resource printed circuit boards for air handlers, heat pumps, 

and package units to a manufacturer in [ ]. However, Goodman needs additional time to 

execute a resourcing plan. Specifically, Goodman estimates that it will take [ 

quotes, [ ] to perform a site audit, [ ] for functional testing, [ 

reliability testing, and [ ] to ramp up production, for a total of [ 

] to obtain 

] for 

] estimated time 

for Goodman to resource printed circuit boards for air handlers, heat pumps, and package units 

from China to [ ]. Goodman is doing everything it can to comply with the USTR's 

underlying policy goals in this Section 301 proceeding. But Goodman respectfully requests a 

one-year exemption from the Section 301 tariffs so that it can accomplish the resourcing away 

from China and still remain competitive. 

VI. Inputs in Question are Not Impacted by China's Made in China 2025 Policies. 

Printed circuit boards have been used for decades in HV AC products, with no major 

changes to technology in the past three decades. Printed circuit boards are very mature 

technology and therefore are not being promoted by China's Made in China 2025 policies. 

VII. Draft CBP Instructions. 

The following is the proposed exclusionary language for CBP: 

Excluded from the section 301 duties are HV AC printed circuit boards ranging from 3.5 

inches to 7.75 inches in length, 2 inches to 5.75 inches in width, and 1.1 inches to 2.5 

inches in height. 

VIII. Confidentiality Statement. 

Consistent with USTR's Section 301 notice, Goodman requests confidential treatment for 

the information designated as business confidential in this submission. Such information consists 

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PUBLIC VERSION 

of information that would not customarily be released to the public, including business or trade 

secrets regarding production costs and processes, data on sales, product characteristics, 

customers, destinations, and other product, sales, and cost-related business secrets. Business 

confidential information has been indicated herein by enclosing it in single brackets("[]"). A 

public version of these comments is also being filed with all confidential information removed. 

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