PHC News Executive's Club - Nick Speaks

Phc News continues its monthly "Executive's Club" feature with Nicholas J. Giuffre, president and chief operating officer, Bradford White Corporation.

What is the mission statement for Bradford White?
Giuffre: Our mission is to be the supplier of choice to all levels of customers in the wholesale channel. We build a premium product and provide it at the best possible price. We offer solutions for every water heating application our customers might encounter, and believe that loyalty is a two-way street regardless of the economic conditions. "Loyalty" on our part means that we must never separate from our path. To accomplish that, we listen. When customers offer recommendations, challenges or complaints, we also listen, we owe that to them. And then we respond through product innovation and excellence. It may sound old fashioned—but all of this must happen before our name goes on the product.

What are/have been your key initiatives for the company?
Giuffre: Our major initiatives have involved product quality, breadth of product line and the development of a concept that's become just as important as any manufacturing process. An important commitment to customers is the ease with which they can do business with us. We also believe in a consistent reinvestment of earnings in R&D, manufacturing technology and processes, and personnel development and as well as in strategic acquisitions.

As a whole-line manufacturer of water heating products, what are some of the things that define you uniquely?
Giuffre: What defines Bradford White most uniquely is our wholesale only philosophy and steadfast commitment to our professional partners in the industry. I believe we have earned the reputation of having the highest quality products in the industry. It's very gratifying to hear anecdotal stories about our quality from customers. Couple what we hear fromour customers with the recognition from J.D. Powers and Associates in 2006, and various other industry surveys on quality, and we know our quality initiatives are working. Without question, our customers recognize this — and they're the ones that count most of all!

It's apparent that Bradford White is moving rapidly into the "greenbuild" industry. Can you describe the company's efforts on this front? Can you describe what that means to the company?
Giuffre: The "greening" of America is in large part driven by energy costs, the desire for energy independence and environmental stewardship. While this market was a small niche just a few years ago, it quickly gained critical mass, working its way into the mainstream. In many cases, consumer decisions to purchase "green" appliances now go beyond the simple calculation of a payback period to include a "feel good" factor that comes from knowing they are helping the environment and/or saving energy. Our efforts on this front are allencompassing. From leadership roles in AHRI, we can help ensure sensible government partnership in supporting energy efficiency in our industry. Involvement in various "green" associations and inclusion of our customers' needs in the product development process ensure that the "green" products we develop meet the requirements of the market. The "green" market is important because it represents an opportunity for growth in new products segments, and the opportunity to differentiate ourselves from our competitors. And at the customer level, our green initiatives have produced many new products and technologies to meet those needs. We're very proud of products like our ultra high efficiency eF commercial water heater; our new Ultra low NOx Eco-Defender residential gas series; a new lineup of solar water heaters; our TTW (though-the-wall) models; tankless systems and high efficiency electrics; and the indirectmodels, too. Many of these water heaters were developed largely through customer feedback and have become some of our greenest offerings.

To what do you attribute Bradford White's continued success, innovation and growth?
Giuffre: We always have our sights set on market expansion and new business opportunities. In the summer of 2002, Bradford White completed the acquisitions of Niles Steel Tank in Niles, Mich., a producer of specialty large and custom storage vessels, and Aero Environmental of Mississauga, Ont. (now known as Bradford White Canada) which manufactured oil-fired heating products for domestic and commercial applications. In 2005 we acquired Laars Heating Systems. That acquisition created a strong entry into the hydronics market. The high-efficiency, high-performance and condensing boiler lines, and commercial water heater systems, are recognized industry-wide as leading technology. Today, Bradford White has four subsidiary companies under our corporate umbrella: Bradford White Water Heaters, Bradford White Canada, Niles Steel Tank and Laars Heating Systems. Bradford White was built and positioned to thrive in challengingmarkets through the breath of our product lines, the various target markets we pursue, and the diversity provided by our subsidiary companies. Combine this with our outstanding R&D team, and we've brought a steady stream of new and exciting products to market, and we have many more in the works.

You are staunchly devoted to sales through professional wholesalers. Please explain that.
Giuffre: It's pretty simple, actually. We believe water heaters should be installed by qualified professionals because it is the safest way. This is more true now than ever before because the standard product is more complicated and there is a much more complex product offering that requires the knowledge and talent of the professional installer.

Can you explain the significance of "American-made"? Explain what that means to you and what you think that means to your customers?
Giuffre: American-made defines who we are, what we do and what we believe. We think that American- made still means something in this country. We hear it from our customers time and time again at our kick-off dinners, trade shows and industry functions. We also believe that it's one of the reasons that a recent study by Clear Seas Research named Bradford White the brand most purchased by Contractors (yes, we spell that word with a capital C).

What is Bradford White's commitment to its employees?
Giuffre: One thing we hear from customers who visit us is that there is a "family" atmosphere in the way we run our business. We take pride in that, and it makes us feel good, but it is a challenge tomaintain that "family" feel as we grow. We've accomplished it by treating our employees as customers and soliciting their feedback. With our UAW employees, we strive for open communication and hold monthly two-way dialog meetings to present and listen to updates on things such as market conditions, competition, safety, quality initiatives and improvement opportuni- 2 Phc News — SEPTEMBER 2008 ties, and employee issues (both personal and work-related). Also important: customer feedback; rewards for success in attendance; quality; safety; and healthcare management. We have been successful in maintaining labor stability and have signed successive long-term labor agreements. During our most recent contract negotiations, which take us through August of 2014, we applied Interest Based Bargaining (IBB). As reported in the industry press, "A significant part of the agreement is that Bradford White and its employees have developed a unified common goal to be the supplier of choice to customers in the wholesale market." The principles of IBB continue in our everyday operations. We take pride in developing our employees and promoting from within the organization. This creates opportunities to reward the hard work and dedication of our employees, and builds a strong and knowledgeable management team.

What is the company's commitment to its surrounding community?
Giuffre: Being a good corporate citizen is important to Bradford White. We are active at both the local and state levels. Our Middleville, Michigan facility is the largest employer in the county. As such, we have been able to help with local infrastructure improvements and provide the vehicle for the community to have a voice with the state legislature. By working at both the state and local level, we have helped bring local suppliers to the area, creating direct and indirect jobs in the community. As Barry County Michigan's largest employer we have pledged 100 water heaters to Habitat for Humanity. Over the past 20 years, Habitat for Humanity of neighboring Kent County has built 158 homes for families in need. Both our Michigan facility and our Laars Heating Systems facility in New Hampshire were visited by their respective governors recently.

Are you involved with buying groups? Explain.
Giuffre: We are involved in buying groups. It makes sense for Bradford White, a company that only sells to the wholesale channel, to be involved with wholesaler buying groups. The biggest benefits are the efficiency of communication with our customers and prospective customers (I'm amazed at how much can be accomplished in a 15- minute meeting), the networking opportunities, and the marketing vehicles the buying groups offer.

What would you like your legacy to be at Bradford White?
Giuffre: The legacy of Bradford White will be a company that is known as a good friend to the industry, with an unfailing focus on the interests of our customers. We will continue to create opportunities for our employees to grow and prosper. The company is in very good hands.

Where do you see Bradford White in 10 years?
Giuffre: In 10 years, I see a Bradford White growing to about twice its current size. This will be accomplished through continued growth in the wholesale channel, the addition of new products and technologies and strategic acquisitions, which complement our wholesale-only philosophy.