Plumbing & Mechanical recently interviewedDon Devine, CEO of American Standard Brands, which since 2008 includes American Standard, Eljer, Crane, Porcher and Jado. Devine, who previously was president and CEO of American Standard Americas, talked about where the plumbing industry and American Standard Brands are headed in 2010.
Before he came to American Standard in 2006, Devine was president and chief operating officer of Jacuzzi Brands. He is a graduate of the U.S. Military Academy at West Point.
PM: How different is the bath-and-kitchen market in April 2010 than it was a year ago?
DD:At best, no better. Most people are still facing a very challenging market. I see a continuing weakness in the commercial market, which will be worse in 2010 than 2009. Overall, the market won’t get better until unemployment gets better-we look at that as a key indicator.
PM: What key elements do you see in bath-and-kitchen remodeling projects in 2010?
DD:At American Standard, we focus on style that works better. People want their plumbing products to be water-efficient, look great, work better and fit in with their lifestyle. Technology is allowing us to bring all this about.
PM: What other trends should plumbing contractors look for in the bath-and-kitchen market?
DD:Aging in place is the new thing. When people can’t sell their homes, they say, “We’re stuck with this asset, we may as well just stay here.” The plumbing business will see advantages by providing the designs and products that fit into their lifestyle.
In many areas, the repair/remodel business remains only a repair business. Consumers are conserving dollars and just buying what they need. They’re not taking that opportunity to do large remodeling projects. People are also changing the way they pay. Rather than using debt to pay, they’re paying cash for jobs through a series of single transactions.
PM: How are American Standard Brands changing the ways you connect with plumbing contractors?
DD:Since the merger of American Standard, Crane and Eljer in 2008, we connect with contractors through 24 manufacturers rep organizations. That gives us more feet on the street and more chances to train. We’ve also created a commercial business unit focused on architects, engineers, contractors and interior designers on commercial projects. Our ATS specification service helps contractors specify projects with our products more cost effectively than ever.
We just opened a bath-and-kitchen showroom at our design center in New Jersey. We’ll use the showroom to train contractors, engineers and wholesalers.
PM: What can plumbing contractors expect to see from American Standard Brands this year?
DD:Coming up next in 2010 will be our mobile showrooms. From April to November, we’ll have two trucks on the road. We need to get that message out to the field that style, design and performance really matter. Our Responsible Bathroom Tour will show that we’re a responsible company with water-efficient products that perform as good as or better than older models. For example, our Luxury Performance (LXP) toilet technology is a leader in performance, water efficiency and style and can be found under the Porcher and American Standard brands.
PM: As a panelist at the last PHCC convention, you said the industry should make better use of online training. Can you elaborate?
DD: Folks need to be looking at the Web not only for training but also to keep up-to-date cost effectively. The notion of “I don’t know” is going to change to “Did you know?” With all the content we can drive to plumbers in the field equipped with a Blackberry or other handheld device, “I don’t know” is going to be an inexcusable term.
PM: How can plumbing contractors educate their customers about green bathrooms and kitchens?
DD:It really goes back to the consumers’ lifestyle. They want to be green, and they want to know if there is a product that is green and really works. There’s a lot of chatter right now about water efficiency and high-performance products. We want to be a great partner by providing useful information and great-looking products with outstanding performance.
One way to do that is to make our Web site a priority destination so people don’t have to go to five different sites to get the information they need. We want to provide content and case studies on our Web site that would verify various claims by showing the end-user experience.
PM: As a businessman, why do you believe you must manage your company by the numbers?
DD:This recession for our industry is not over. On a regional basis, it may continue for some time. The macro values may get better, but there are still areas of distress. Playing the game of cutting prices and not cutting your costs will lead to failure. You have to make sure you match your cost structure with your revenue structure.
Demand is inelastic to price in this recession. The shoppers coming into our categories today have a need, and our goal is to meet that need so they will come back to us for the next element of their project.
Consumers and contractors don’t want to make a purchase, be sold on price and find out that the product doesn’t work once it is installed. If you only focus on discounting, you may get a transaction but you may not create a customer.
PM: If you had only one message to give to plumbing contractors, what would it be?
DD:Our company’s roots date back to the 1800s. American Standard has thrived over our history by focusing on products, people and serving the need of our customers. Contractors today can rely on American Standard as their trading partner. We expect to be around for a long time.
PM:The death of “McMansions” has been widely reported. Are these reports premature?
DD:When you look at income and home prices, people are investing in smaller homes because investing in larger ones doesn’t increase their asset value. In new construction, houses will get smaller for the next three to five years. I can’t forecast much beyond that. The good news for plumbing companies is that even if houses are getting smaller, we’re not going back to four people living in a house with one-and-a-half baths. They still will want as many bathrooms.
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