Longtime Valley air-conditioning firm relies on quality, brand name to survive competitive onslaught - East Valley Tribune: Business

Longtime Valley air-conditioning firm relies on quality, brand name to survive competitive onslaught

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Posted: Friday, February 7, 2003 11:47 pm | Updated: 2:11 pm, Thu Oct 6, 2011.

This is a feel-good story. It's about four guys who are taking a risk, buying the company they've worked for. It's about an Arizona company and 100 jobs staying at home. It's about the survival of a familiar brand that has stood for quality.

But before you start feeling too warm and fuzzy, you should know there's some cold reality ahead. Because above all, this is the story of air conditioning, and the company that tamed the Southwest — or at least the Valley.

Last week, Salt River Project celebrated its 100th anniversary. The water and power company is rightly hailed as an engine for the growth that followed in the East Valley and Phoenix.

Still, a half-century after the Salt River Project started, the East Valley was mostly a patchwork of sparsely populated agricultural communities. SRP made this place habitable, but a company called Goettl made it palatable.

Goettl installed the bulk of the air conditioners in homes in 1950s and ’60s as Scottsdale, Mesa, Tempe exploded with growth. Before air conditioning, people relied on evaporative or swamp coolers to make their homes somewhat more comfortable in the Arizona summers. The Goettl brothers, Gust, Adam and Bill, started out in 1939 with swamp coolers. Air conditioning, or more specifically, refrigeration, had been around since the turn of the 20th century. But it was used in department stores and movie theaters, not homes.

After World War II, Gust and Adam sold to Bill, who started pioneering refrigeration for homes in the Valley, making units, installing them, repairing them. It was the birth of the cool.

By 1970, this collection of sleepy towns filled with ranchers, farmers, citrus growers and respiratory patients had morphed into a booming metropolitan area. Between 1950 and 1970, Scottsdale grew from 2,032 to 67,800, Mesa from 16,790 to 62,853 and Tempe from 7,684 to 63,550. Company officials say Goettl dominated the tract homes springing up.

But several things changed. First, Goettl was sold to an investment company. New builders came to town who didn't know Goettl from "kettle." And new companies, giants like Carrier and Trane, entered the Valley market. They could offer homebuilders units for less than Goettl could.

Goettl kept making units, but service became a bigger part of the operation. Today, the company does about $20 million in sales, about half from making the units at the factory near 40th Street and Broadway Road in Phoenix.

In the late 1970s, Los Angeles investor David Murdock bought the firm. A couple years ago, he decided to sell it. It looked like Goettl would be bought by a larger competitor and the manufacturing operation would move out of state. "We were probably heading to some place like Oklahoma or New Jersey,'' said John Ryan, vice president of marketing. "But we like it here."

Last summer four of them — Ryan, president Daniel Burke, general manager Brad Morari and vice president of finance Jason Fairfield — decided to try to buy the company. Last month, the deal was announced. The sale of Goettl assets to the four should close in March.

They put up some of their own money, and worked with a small lender, Scottsdale Community Bank.

The four say they are not men of means. They are solidly middle-class. Burke, Morari and Ryan live in Ahwatukee Foothills. All drive older cars.

"And there's not a BMW or Cadillac in the bunch," Morari said.

Well, Ryan drives a Mercedes, but it's a '91.

In the last 30 years, Goettl has lost its market dominance. But the brand still resonates with longtime residents. Goettl does well with people who are replacing units.

"If you're the one paying the utility bill, you like us,'' Burke said.

Goettl makes one of the most efficient units around, they say. They point out they were one of two manufacturers to oppose the Bush administration's rollback of requirements for efficiency for air conditioners.

And Goettl units are durable. The one installed in the first home in Sun City, back in 1959, is still working.

And so are about 100 employees.

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