Bloomberg Audio Studios, podcasts, radio news.

Bloomberg Audio Studios, podcasts, radio news.

I'm pleased to say joining us now is David Gitlin. He is chairman and CEO of Carrier, which is a world leader in heating, air conditioning and refrigeration solutions. Great to see you here.

I'm pleased to say joining us now is David Gitlin. He is chairman and CEO of Carrier, which is a world leader in heating, air conditioning and refrigeration solutions. Great to see you here.

Great to see you, Scarlette Romaine.

Great to see you, Scarlette Romaine.

Thank you for having me so talk us through what's new when you're investor?

Thank you for having me so talk us through what's new when you're investor?

Daid this year.

Daid this year.

You had an investor day in twenty twenty two, and it looks like a lot of the goals are similar. What's different this time around in twenty twenty five, Well, what.

You had an investor day in twenty twenty two, and it looks like a lot of the goals are similar. What's different this time around in twenty twenty five, Well, what.

We said is that we did everything we said we were going to do. Back in twenty twenty two. We said we'd grow fifty BIPs a year of margin expansion. We grew one hundred. We said we'd grow EPs about ten percent a year. We've grown our EPs fifteen percent a year. We did what we said on our effective tax rate. We said what we would do on free cash full equal to net income. But we did say that we would grow sales six to eight percent a year.

We said is that we did everything we said we were going to do. Back in twenty twenty two. We said we'd grow fifty BIPs a year of margin expansion. We grew one hundred. We said we'd grow EPs about ten percent a year. We've grown our EPs fifteen percent a year. We did what we said on our effective tax rate. We said what we would do on free cash full equal to net income. But we did say that we would grow sales six to eight percent a year.

The last few years we've grown four.

The last few years we've grown four.

So the whole investor day we had four hours this morning at the NYSE was how do we get consistently six to eight percent gross. So we introduce a growth algorithm the market. We said call it low single digits, be conservative, and then we had a three prong growth to a three prong strategy to growth. One is outgrowth the market through products so share gains.

So the whole investor day we had four hours this morning at the NYSE was how do we get consistently six to eight percent gross. So we introduce a growth algorithm the market. We said call it low single digits, be conservative, and then we had a three prong growth to a three prong strategy to growth. One is outgrowth the market through products so share gains.

The second was aftermarket.

The second was aftermarket.

Where we've said aftermarket will grow double digits forever for us. And the third is kind of a new frontier is systems offerings. That combination gets us the sixty percent a year.

Where we've said aftermarket will grow double digits forever for us. And the third is kind of a new frontier is systems offerings. That combination gets us the sixty percent a year.

So it sounds like there's some tailwinds in your industry. Walk us through which of it is structural, which of it is cyclical.

So it sounds like there's some tailwinds in your industry. Walk us through which of it is structural, which of it is cyclical.

There's a couple of unique tailwinds, for example, right now around data centers. If you think about a typical commercial office building, it may have three chillers.

There's a couple of unique tailwinds, for example, right now around data centers. If you think about a typical commercial office building, it may have three chillers.

A data center may have one hundred and fifty.

A data center may have one hundred and fifty.

So the massive investments we're seeing in data centers place right to our strengths. And we've just introduced a brand new, very unique offering that we call quantum Leap, which is a combination of traditional cooling with a chiller at air handlers, but also a new liquid cooling which is a direct to chip cooling. And our combination is very unique because we're the only ones in the industry integrating traditional cooling, liquid cooling, an entire building management system, server management all into one offering.

So the massive investments we're seeing in data centers place right to our strengths. And we've just introduced a brand new, very unique offering that we call quantum Leap, which is a combination of traditional cooling with a chiller at air handlers, but also a new liquid cooling which is a direct to chip cooling. And our combination is very unique because we're the only ones in the industry integrating traditional cooling, liquid cooling, an entire building management system, server management all into one offering.

What's been the demand for that, because I know we've talked a lot on this program about the build out of data centers and such, but there's also been a lot of sort of promises to build things and I know the building hasn't actually started for some of that. So what's been the uptake here and do you expect it to increase?

What's been the demand for that, because I know we've talked a lot on this program about the build out of data centers and such, but there's also been a lot of sort of promises to build things and I know the building hasn't actually started for some of that. So what's been the uptake here and do you expect it to increase?

We do.

We do.

Last year we were about five hundred million in sales for data centers.

Last year we were about five hundred million in sales for data centers.

This year will be a billion, so two x.

This year will be a billion, so two x.

We're now taking orders for twenty six, twenty seven, even into twenty eight. So the hyperscalers are growing at different paces right now, but very very strong demand. And what we're seeing is increased demand for colos, the co locators, especially in Europe and China.

We're now taking orders for twenty six, twenty seven, even into twenty eight. So the hyperscalers are growing at different paces right now, but very very strong demand. And what we're seeing is increased demand for colos, the co locators, especially in Europe and China.

Really is there Are you involved at all in some of the administrations push to help build data center projects in the Middle East and elsewhere outside of the US one.

Really is there Are you involved at all in some of the administrations push to help build data center projects in the Middle East and elsewhere outside of the US one.

Hundred percent we are.

Hundred percent we are.

We're very much working on new wins in the UAE that we're announced recently, we have a lot going on in Saudi Arabia, so we see the Middle East as a real good growth factor for US.

We're very much working on new wins in the UAE that we're announced recently, we have a lot going on in Saudi Arabia, so we see the Middle East as a real good growth factor for US.

You also have a lot going on in the US, because over the past five years, you've definitely grown and focused on expanding your US workforce by approximately twenty percent. How much of this was in response to the changing political wins, how much of this was a strategic advantage for you, specifically a strategic advantage.

You also have a lot going on in the US, because over the past five years, you've definitely grown and focused on expanding your US workforce by approximately twenty percent. How much of this was in response to the changing political wins, how much of this was a strategic advantage for you, specifically a strategic advantage.

We like to be where our customers are.

We like to be where our customers are.

About fifty percent of our sales are in the United States, so you know we've grown our workforce, as you said, twenty percent.

About fifty percent of our sales are in the United States, so you know we've grown our workforce, as you said, twenty percent.

Over five years.

Over five years.

We're by far the biggest player that's headquartered in the United States in our industry. And what we announced last week was an incremental billion dollar investment in the United States over the next five years, which will create four thousand additional jobs. And these are very technical jobs. It's a combination of R and D. You can think mechanical, traditional software and electrical engineering technicians that are out in the field.

We're by far the biggest player that's headquartered in the United States in our industry. And what we announced last week was an incremental billion dollar investment in the United States over the next five years, which will create four thousand additional jobs. And these are very technical jobs. It's a combination of R and D. You can think mechanical, traditional software and electrical engineering technicians that are out in the field.

And we also announced that we're.

And we also announced that we're.

Going to establish a brand new manufacturing factory in the United States.

Going to establish a brand new manufacturing factory in the United States.

We're very proudly in North Carolina.

We're very proudly in North Carolina.

I know, we're in Georgia, we're in Tennessee, but we're now going to build a new factory. We're looking at a location like Texas, but we haven't.

I know, we're in Georgia, we're in Tennessee, but we're now going to build a new factory. We're looking at a location like Texas, but we haven't.

Finalized the choice with regards to some of those hires and the technical expertise you need for these jobs. Do those people come to the table with that or do you have to train them?

Finalized the choice with regards to some of those hires and the technical expertise you need for these jobs. Do those people come to the table with that or do you have to train them?

It's a combination.

It's a combination.

That's part of the negotiations with the states right now as we are looking for some support on some of the technical training. But we will train about one hundred thousand technicians a year, so we know how to train and then integrate on whether it's technicians or even highly skilled manufacturing labor as well.

That's part of the negotiations with the states right now as we are looking for some support on some of the technical training. But we will train about one hundred thousand technicians a year, so we know how to train and then integrate on whether it's technicians or even highly skilled manufacturing labor as well.

So when it comes to what we're seeing in the higher education landscape, this idea that the government is going to reduce funding to universities, how does that impact a company like you who is looking to increase your footprint in the US hire more. Is there a direct cause and effect for a company like Carrier.

So when it comes to what we're seeing in the higher education landscape, this idea that the government is going to reduce funding to universities, how does that impact a company like you who is looking to increase your footprint in the US hire more. Is there a direct cause and effect for a company like Carrier.

You know, we see it as a very competitive labor environment for the kind of skills that we're looking for right now. You know, when we look at technicians, we've said that we're going to a thousand technicians in the United States over five years.

You know, we see it as a very competitive labor environment for the kind of skills that we're looking for right now. You know, when we look at technicians, we've said that we're going to a thousand technicians in the United States over five years.

We try to partner with.

We try to partner with.

Technical schools in particular, and that partnership has been very strong. But what we also have to do is establish training universities within our four walls within Carrier. So we've seen great success, especially recently over both manufacturing R and D and technical labor hiring.

Technical schools in particular, and that partnership has been very strong. But what we also have to do is establish training universities within our four walls within Carrier. So we've seen great success, especially recently over both manufacturing R and D and technical labor hiring.

So for those companies that those American companies that are struggling to bring back jobs, bring manufacturing jobs back to the US, how would you advise them? What would you say to them to kind of rethink what they're able to do?

So for those companies that those American companies that are struggling to bring back jobs, bring manufacturing jobs back to the US, how would you advise them? What would you say to them to kind of rethink what they're able to do?

You know, it is it is competitive.

You know, it is it is competitive.

For example, we have a manufacturing site just outside of Memphis and Tennessee, and we do compete. We'll compete with Amazon, we compete with FedEx for labor. What our goal is to create an environment people want to come and people want to say so. People want upward mobility, People want to feel like they have a lot of upside on the compensation side, and they want to be a part of a company that matters. And one of the things that we have is our purpose statement is enhancing the lives we live in the world. We share what we do matters. We contribute. Our industry contributes to climate change, so we can be part of the solution that matters to people that we can create a safer plan and for generations to come.

For example, we have a manufacturing site just outside of Memphis and Tennessee, and we do compete. We'll compete with Amazon, we compete with FedEx for labor. What our goal is to create an environment people want to come and people want to say so. People want upward mobility, People want to feel like they have a lot of upside on the compensation side, and they want to be a part of a company that matters. And one of the things that we have is our purpose statement is enhancing the lives we live in the world. We share what we do matters. We contribute. Our industry contributes to climate change, so we can be part of the solution that matters to people that we can create a safer plan and for generations to come.

We give there's three and a half.

We give there's three and a half.

Billion people in the world that live in the hottest parts of the in the world. Only ten percent of those folks have air conditioning. So we have an ability to impact people's lives all over the world. And people want to come to a company and feel like they're part of something that really matters. So we've invested in our culture, we've invested in our people, we've invested in our workforce, and that's been paying off for us.

Billion people in the world that live in the hottest parts of the in the world. Only ten percent of those folks have air conditioning. So we have an ability to impact people's lives all over the world. And people want to come to a company and feel like they're part of something that really matters. So we've invested in our culture, we've invested in our people, we've invested in our workforce, and that's been paying off for us.

Is the growth that you're looking to do right now, is that going to be primarily organic or are you looking for acquisitions?

Is the growth that you're looking to do right now, is that going to be primarily organic or are you looking for acquisitions?

It's primarily organic.

It's primarily organic.

You know, we just were coming off the heels of integrating a thirteen billion dollar acquisition with the German acquisition that we did with Visama Climate Solutions.

You know, we just were coming off the heels of integrating a thirteen billion dollar acquisition with the German acquisition that we did with Visama Climate Solutions.

That's gone phenomenally well. The last year.

That's gone phenomenally well. The last year.

The sales were a little bit lower than we anticipated, but it's a truly world class company that's going to create value for years to come. Right now, our whole theme this morning was on organic growth that's six to eight percent, with a very strategy to drive it and a lot of confidence in the team to do it, and a very different portfolio than we had just five years ago.

The sales were a little bit lower than we anticipated, but it's a truly world class company that's going to create value for years to come. Right now, our whole theme this morning was on organic growth that's six to eight percent, with a very strategy to drive it and a lot of confidence in the team to do it, and a very different portfolio than we had just five years ago.

All Right, I really appreciate you coming here. What's tough for facing investors for four hours, are facing scarlett for you know, the last.

All Right, I really appreciate you coming here. What's tough for facing investors for four hours, are facing scarlett for you know, the last.

Facing scarlet and you are great. Well, thank you for having me.

Facing scarlet and you are great. Well, thank you for having me.

David get Letting, the chairman and CEO over at Carrier

David get Letting, the chairman and CEO over at Carrier