HVAC Manufacturer Discusses Tariffs | ACHR News

Solo: Absolutely. Tower Tech was founded 30 years ago with a sole focus to eliminate all the existing problems that existed with cooling towers at the time by designing a new type of cooling tower. 

We literally turned the cooling tower industry upside down. We designed a cooling tower that has all the fans and mechanical equipment on the bottom of the product instead of on top of a cooling tower. 

That led to many significant additional benefits through that design process — everything from eliminating maintenance issues, to better water distribution, to creating a safer cooling tower to maintain because everything was at ground level and had easy access. 

In the end, we have a product that provides savings instead of costing money to operate. We didn’t realize that at the time, but we were a sustainable company before that was ever a message in the industry. 

ACHR NEWS: What are your plans for the tariffs, or how do you see that affecting your business? 

Solo: One thing that’s in our favor is that we’re 100% manufactured in the U.S. We’ve always been focused on being a U.S.-based company since the beginning. We’re proud to meet all the requirements for the made-in-the-USA designation. 

Some of our raw materials and base materials do come from overseas. We sell our product internationally around the world. We are following the geopolitical climate and the conversations going on closely. 

But we do feel that we’re well-positioned. This is a similar situation to COVID with the supply chain disruptions, and where we saw the industry with extremely long lead times. 

We’ve really focused on being a modular product. It’s very efficient, not only in operations, but in manufacturing. We do have the fastest lead times in the industry. We feel we’re positioned with what’s going on right now with potential tariff talks that will continue to maintain those strongest lead times. 

ACHR NEWS: Are you guys raising prices based on what’s going to happen with raw materials, or are you kind of seeing how it plays out? 

Solo: To date, we have not changed our pricing due to potential tariffs or any tariffs at all. We have had close conversations with our supply chain partners to make sure they’re not being impacted. 

Right now, we feel strongly that we’re in a good position. Could that change? Obviously, with the shifting environment, it could change. 

But as of today, we have not made any decisions to increase pricing. 

ACHR NEWS: Are you more concerned from the other end of it? Meaning products that you’re shipping overseas will be dinged by tariffs from other countries?  

Solo: Obviously, being international, we do have to watch how it impacts our partners internationally and communicate with them on what that potentially is shifting. It’s just something we continue to have conversations on. 

We have some meetings lined up next week for that very topic. I’m just trying to see if there are ways to better support them during this uncertainty. 

ACHR NEWS: How do you see the tariffs affecting the HVAC market in general?

Solo: I think we already saw companies having conversations during COVID because of the supply chain disruptions. Whether they’ve made decisions back then or are continuing those conversations today, it certainly starts. 

We feel it is more important not to just talk about price, but also to look at the quality of products made here in the USA. 

I think you often hear the question, why don’t products and parts last as long as they used to? And we all know companies are price-competitive. They’re focused on increasing profitability. That’s the nature of business. Unfortunately, that often leads to sacrificing quality to get there. 

If the uncertainty that we’re seeing today shifts the conversation back to focusing on the quality of the products that last longer and are better for the customer, that’s a good thing. 

If the result is some price increases, you have to balance that out in the conversation. 

ACHR NEWS:  Do you believe that this will lead to more manufacturing in the United States? 

Solo: That’s a good question, because so many companies are so entrenched internationally and dependent on overseas manufacturing and supply chains from overseas. 

It’s not as easy as “let’s just bring it to the U.S.” However, you will see some onshoring, whether it’s 100% or just certain critical components. 

I think it’s almost inevitable if the geopolitical climate continues down the current path. 

ACHR NEWS: What could the supply chain issues be?  

Solo: You could see a lot of different scenarios play into this, from retaliatory decisions made by other countries to some companies just holding off on producing components or parts because of tariffs and their impact of tariffs. It is something that companies have to be aware of and make sure they have contingency plans under any scenario. 

ACHR NEWS: What is this uncertainty doing to your business? 

Solo: I don’t want to say it’s been business as usual. We’re not flippant about the fact of what’s going on. 

But, like I’ve said, fortunately, we are in a position where we feel strongly prepared for the current situation with our partners. With most of our partners, we’ve been doing business with them for close to 30 years. Those strong relationships are critical during uncertainty. 

Communication is the key. 

ACHR NEWS: What advice would you give HVAC contractors who are living downstream with this issue? 

Solo: I’m going to go back to communication. It is communication with your suppliers and with your customers.  

I could see some delays of critical components. You could see some delays replacing equipment as a whole due to longer lead times. 

There will be a bigger demand for preventative maintenance. Contractors should be thinking about what they can do to make sure this equipment lasts longer.