Trane Acquisition Amounts To Cool Deal For Tyler By GREG JUNEK, Business Editor   |   Jun 15, 2008

Ingersoll Rand’s acquisition of Trane does not threaten jobs in Tyler, but rather gives the company more growth opportunities than it has had in the past.

Dave Pannier, president of Residential Systems for Trane and American Standard heating and air conditioning in Tyler, said the mood at the plant is upbeat, because the acquisition, which became effective June 5, made Trane stronger.

“Our business is headquartered here in Tyler, our headquarters is going to stay here in Tyler, there won’t be any movement with regard to how we run our business and from where we run our business,” Pannier said.

The Hamilton, Bermuda-based Ingersoll Rand purchased Trane for approximately $10.1 billion in cash and stock. Trane, based in Piscataway, N.J., has more than 29,000 employees and 29 production facilities worldwide.

“The acquisition of Trane represents a major milestone in the history of Ingersoll Rand and culminates a significant transformation of our business portfolio,” Herbert L. Henkel, Ingersoll Rand chairman, president and chief executive officer, said in a statement after the acquisition became effective.

Henkel said Ingersoll Rand anticipated 2008 revenues of $17 billion.

Trane Residential Systems, headquartered in Tyler, has five different operations throughout North America. The primary product produced in Tyler is air conditioning.

The Tyler operation employs about 1,375 people in production and about 520 people on the salaried staff.

Pannier said Trane is a very good addition to Ingersoll Rand, and jobs at Trane should be secure because the missions of the two companies did not overlap.

“The mood is actually quite upbeat; there’s really no reason why it shouldn’t be,” Pannier said. “Ingersoll Rand has not historically been in the heating and air conditioning business.”

Ingersoll Rand has a security technologies business and an industrial technologies business and a climate-control business that pertains to refrigerated trucks and trailers and refrigerated and frozen food display cases.

The acquiring company does not have anything like Trane in its businesses, so “finding synergies” and closing or combining plants will not be an issue, Pannier said.

“This is a new space that they’re getting with the acquisition of Trane,” he said. “It’s not like we will be merging two like businesses together.”

In fact, Pannier said he believes advantages exist in being part of a larger company.

“We are now part of what is a $17 billion global enterprise,” he said. “Some of the technologies that they use in their businesses and our business are very similar, and we can learn from one another.”

These include compressor technology, Pannier said. Also, especially for salaried employees, more opportunities exist in terms of career aspirations and moving across businesses.

And because Ingersoll Rand is large and global, an economic downturn in a particular region of the world can be offset by good economic conditions in other parts of the world, he said.

The union representing the manufacturing employees at the Tyler plant also supports the acquisition.

“I think it will strengthen the business overall; I think it will be a positive thing,” said Tony Hays, president of the International Union of Electronics, Electrical, Salaried Machine & Furniture Workers Local 782.

There will probably be some “growing pains” related to the acquisition, Hays said, but the overall security of the business and its ability to plan for the future should be strengthened.

“Ingersoll Rand is a very reputable and old company that, quite frankly, has a very good name,” he said. “The association with them is quite positive for Trane.”

Pannier said the acquisition does not change Trane’s plans to complete and operate a testing facility under construction at the plant site.

Last year, Smith County, the city of Tyler and Tyler Junior College approved a four-year, 100-percent tax abatement agreement on the $4 million research and testing lab, a project officials said would result in 16 new jobs and nine retained jobs.

“Work on that continues,” Pannier said. “It was delayed somewhat earlier in the year because of weather. It’s coming along. There are footings being poured; there’s a lot of activity.”

The estimated investment has also increased to about $5 million, he said. The 20,000-square-foot lab will not be operational until the latter part of this year.

“It will be a world-class testing and research and development laboratory to help us deliver against our customers’ expectations, primarily from a quality and reliability perspective,” he said.