Political Commentator Bashes HVAC Private Equity

Walsch focused heavily on the Detroit market, pointing out that familiar local brands are all owned by the same private-equity company. He contends that keeping the original branding gives homeowners the impression they are shopping among competitors when they may be getting quotes from companies under the same ownership. His central argument is that private equity is changing HVAC contractors from locally focused service businesses into sales-driven operations, potentially eroding consumer trust and creating an opportunity for truly independent contractors to differentiate themselves through transparency, repair expertise, and local ownership.

Is this true? It actually does not matter. Why? Because a prominent national commentator with a large consumer audience is telling homeowners that private equity is driving up HVAC prices and changing the quality of service they receive. It does not matter if his conclusions are fair, oversimplified, or absurd.

What does matter is that this narrative is reaching mainstream consumers, and that is something all HVAC contractors will need to deal with in their business. The industry has been debating the positives and negatives of consolidation for years. But now, someone from the outside is saying: Be careful — the local contractor you trust may now be owned by private equity, and that ownership may affect the recommendations you receive.

Let’s tell the truth now. PE-backed contractors are not automatically bad contractors, and independent contractors aren’t automatically good ones. Private equity has brought capital, technology, training, benefits, sophisticated marketing, and succession opportunities into the industry. It has also made a lot of HVAC lifers a lot of money.

But that makes no difference once a narrative has been established in the mainstream media. Here are three things that HVAC contractors can take from this.

1) Consumers are starting to notice consolidation. I must say that they were a bit slow to catch on since we are closing in on a decade of private equity really being interested in the HVAC industry.

No doubt this is partly because private equity is getting involved in a lot of businesses that touch the average American. It goes all the way from Jersey Mike’s to their dentist.

The plan to acquire a well-known local contractor and retain its name makes business sense. This happened in the HVAC industry back in the 1990s too. But if homeowners find out that several businesses they are considering hiring share the same ownership, they will feel misled. It does not matter that nobody technically misrepresented anything — HVAC contractors do not get to decide how the homeowner feels.

This is something HVAC contractors owned by private equity must take into consideration.

2) This is all about money, right? If HVAC prices were not skyrocketing (and there are plenty of reasons for that), this would not be an issue.

Repair versus replacement has become a trust issue. Contractors already fight the perception that techs are salespeople. If consumers begin associating private equity ownership with replacement quotes and sales targets, then everyone who comes into that home becomes a suspect.

I am not saying that the answer is fewer replacements. That would be silly. But it is important for the HVAC company to be able to demonstrate why replacement is the better choice.

3) Who is rereading the article 44 times and laughing out loud? Independent contractors. They have just been handed a great marketing opportunity. If you are genuinely locally owned, scream it from the rafters. If your technicians are not commissioned based on replacement sales, make sure you mention that to the customer. If you will repair a 15-year-old air conditioner when repairing makes sense, make that a part of your value proposition.

On the other side of the coin, if you are a PE-backed contractor (and there is nothing wrong with that), you need to explain the ownership model. Simply explain what that model provides customers rather than pretending ownership doesn’t matter.

Either way, lean into your strengths. Simply tell the truth, if for no other reason than that it is the easiest thing to remember.