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Welcome to the future, technologies and innovations that sculpt our industry.

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This episode brought to you by Johnson Controls and their redesigned residential HVAC portfolio

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utilizing R454B.

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Learn more at johnsoncontrols.com.

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All right, everyone.

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Thank you so much for joining Did You Know?

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The ESCO HVAC Podcast.

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So today we're spending some time with David Budzinski, the president of global products

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at Johnson Controls.

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How are you doing, sir?

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I'm very good.

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Thank you.

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How are you?

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I'm doing very well.

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We're very excited to talk to our OEMs about the transitions that we're seeing in equipment.

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So by now, hopefully everyone is familiar with the technology transition as well as

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our refrigerant transitions.

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So we're going to see a variety of new things in our product lines.

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And so we're here to spend some time talking about new product lines from Johnson Controls.

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So when we start talking about the A2L transition, could you give us some specific features or

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enhancements about the new product lines and how we're going to see different efficiencies

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and serviceability in new equipment?

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Of course.

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So I want to talk a little bit about some of the new portfolios that we have recently

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launched and are going to continue to be launching here through the rest of the calendar year

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in 2024.

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So specifically in our residential HVAC portfolio, we've spent a lot of time in the last multiple

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years refreshing our portfolio based on new regulation changes.

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So if you look at the transition we did in 2023 with the DOE specific, we really raised

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our energy efficiency standards to essentially the C02 rating for the North America markets.

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As we head into 2024 and up to 2025, we're obviously focusing on really two types of

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portfolio refreshes.

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One is largely on the move to a low GWP refrigerant.

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So Johnson Controls has selected our 454B as our new refrigerant for our residential and

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light commercial HVAC portfolio.

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And simultaneously, we're also taking the opportunity to really focus on not just the

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transition to new logic GWP refrigerants, but also focusing on feature enhancements

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that really help our contractors.

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We've gotten a lot of feedback and done a significant amount of voice of customer relative

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to things that not only improve the performance of the unit for homeowners, relative to things

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like improving the energy efficiency in their homes and lowering their electric utility

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bills, but also things that are important for our contractor base around serviceability

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of the units and most importantly, on decreasing the amount of time it takes for the units

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to be installed.

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So things like placement of where the valves are located to call it charging and charging

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specifics around the amount of charge in the unit that help essentially get our contractors

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in and out in a much faster and more efficient way so that they can complete more installs

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in one day than they have with some of our previous generation product or some of the

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product of our competitors.

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So we've done a significant amount of tear down analysis between our units and those

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of our peers in the industry so that we could really understand what's most important for

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our contractors and what's most important for our end users and we've incorporated tens

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and twenties of different types of features and things in each of the models that are

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coming out in our new generation products that we know are going to be very, very much

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welcome for our contractors and consumers alike.

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Yeah, absolutely.

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We're going to move into an age of new generations of technologies.

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As the technological advancement of our age advances, it's inevitable that we're going

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to see more advanced technologies in our equipment and I love it.

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I'm a controls and automations guy so I think it's fantastic that we're starting to get

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a little bit more advanced in our residential sector as we should and so we're very grateful

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that Johnson Controls is doing this.

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When we look at refrigerants, we're primarily going to see two refrigerants in the residential

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and light commercial sector, R32 and R454B.

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Do you know, were there some determining factors for Johnson Controls going with R454B over

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R32?

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So we're actually going to use both.

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So we're using R454B in our residential ducted portfolio and we're using R32 in our ductless

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portfolio.

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And the reason we chose R454B in our residential ducted and light commercial ducted portfolio,

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I should say, was really because there's a couple of reasons.

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One is it had a lower GWP number and so as we work really closely with the EPA and what

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the next lowering threshold will be for greenhouse gases, we wanted to stay ahead of the game

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and we wanted to make sure that when contractors and homeowners were putting in our new generation

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portfolio, that as well as our distributors, frankly, that there's a healthy level of inventory

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and product going out to the consumers that essentially would be ahead of the game if

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and when I should say the EPA takes their next step down.

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So very, very important for us to really be ahead and make sure that we have a sustainable

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path, not just for the environment, but for us from a product line perspective as well.

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And most of our peer sets have followed that suit relative to choosing 454B.

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On the ductless side of the house for North America, we moved to R32.

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That was largely being driven by most of our Asia-based populations where our peer sets

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that are largely based in Asia have chosen to go to R32.

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It's a little bit of an easier drop in from our 410A to go to that.

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And so we know that there's another change that's going to need to happen.

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But because of how large our overall installed base is in Asia, as well as how much product

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we have from the ductless side going to Asia, it was more driven by the market demand to

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move to R32.

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And so we wanted to make sure that we're in line, not just with our installers and contractors

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overseas outside of the domestic United States, but also with our distributors and the regulatory

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bodies outside of North America.

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So that's the reason we went to R32 for the ductless portfolio.

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And we chose to go to R454B for the North America portfolio.

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No, I appreciate you explaining that.

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It makes a lot of sense.

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And when we start talking about both refrigerants, R32 and R454B, those are both A2L classified

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refrigerants.

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And we spent a lot of time here at Esco talking about the different ASHRAE flammability classifications.

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And A2L really doesn't have much flammability to it.

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A lot of people don't realize that even R410A and all refrigerants have a flammability to

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it.

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Just so significantly low that we didn't utilize any type of refrigerant leak detection in

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the past for A1s.

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But industry-wide, we're going to start utilizing some refrigerant leak detection.

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And it really kind of comes down to the installation, the design, and the refrigerant charge.

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So some systems are going to see some refrigerant leak detection.

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And can you tell us a little bit about what we're going to see?

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What kind of product lines will we be utilizing that in?

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So I think it's important to understand that A2Ls are mildly flammable.

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They're not necessarily...

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There's a bit of an education that still needs to happen relative to understanding the flammability

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itself of these types of A2Ls.

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And also as well as when we move to naturals.

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So I think there's a transition that's going to be happening here over the next decade,

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I would say, as we continue to advance as an industry here.

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And so we are going to start to see, obviously, safety precautions on the units themselves

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relative to the leak detection sensors that we have.

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All of our new generation product line has the leak detection sensing both in our ducted

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as well as ductless technologies.

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So all of that's going to be already installed within the unit itself.

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And so I think it gives consumers essentially a sense of comfort to know that if there is

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a leak, it will be detected by the sensing technologies that we're embedding within the

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mechanical equipment itself.

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And obviously will generate the necessary shut off precautions to make sure that there's

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no issue relative to from a safety perspective in the home or the commercial space.

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So I think it's very, very important for us.

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We're also spending a lot of time educating not just our contractor base, but also our

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distributors and to a certain extent our end users on quite the flammability that is there

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and really how flammable it really is versus is not.

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So frequently we have quite a bit of demonstrations on the fact that H2Ls are not quite as flammable

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as people think they are.

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So the word mildly is very important.

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And so I think it really comes down to still making sure we have the appropriate level

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of safety precautions in the detection systems, but we're not necessarily over pivoting to

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something as flammable as per se propane, right?

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Which is a lot more flammable.

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So we're doing that education continuously and all of our new lines have the appropriate

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amount of detection equipment in it to make sure and integrating that into making sure

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the units are safe for contractors and homeowners alike.

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Yeah, I would say you've actually went above and beyond the expectations.

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When we start talking about M1 classifications for H2L refrigerants, we're talking around

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4.1 pounds or so for R454B before we start requiring mitigation.

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So the fact that you're going to be implementing those into ductless systems for a product

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line, that's just showing that you're stepping up that expectation and exceeding what those

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industry standards are going to be.

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So that's really cool.

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I'm glad to see that.

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Some manufacturers have not, and I've been wondering who is going to be able to really

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step up that bar and set a new standard across the entire product line.

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So thank you very much for doing that.

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That's a very important move in the industry and I'm glad to see that.

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It's a good difference.

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I think we're really integrating that with some of our digital technology.

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So if you think about in our ductless systems, we have for both our VRF technologies, we

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have AirCloud Pro, which is our digital connectivity technology that not only helps installers

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to determine the right amount of refrigerant charge, but make sure that the installation

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is up to speed.

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We're integrating that sensing technologies into that digital platform that's helping

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our contractors guide them through our new generation, our 32 technologies.

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And then we also have our AirCloud Home, which is more consumer based, but that's really

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more for our ductless rack platforms and making sure that they are up to speed and can control

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and do some command and control of the units themselves.

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So all available in our new generation products, both from a rack pack and our new generation

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top flow VRF.

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So I'm pretty excited about those coming out.

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Yeah, that's a lot of really good technology into a consumer market that hasn't really

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been given those tools.

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Now that homeowners are starting to utilize applications for monitoring refrigerators

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and appliances, water conditions in their home, they're actually being more aware of

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their built environment.

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And so being able to have a connected system where they have a little bit more interface

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with their comfort cooling and comfort heating products is a really nice add on.

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One of the things that we do get questions about when we start talking about A2L equipment,

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is there any common identifiers with your new product lines that will be utilizing A2L

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refrigerants?

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Yeah, so we're making sure that all of the appropriate equipment we have that is A2L.

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So there is a couple of things.

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Obviously, we're following the safety regulations and all of the necessary regulatory protocols

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on labeling the units, making sure that they're very clearly identifiable when it comes to

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which ones have our legacy refrigerant, as well as our new A2L refrigerant.

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So those units will have the appropriate call it signage and labeling attached to the units

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themselves.

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But also one very easily identifiable will be we've launched a brand new color scheme

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for our residential equipment.

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And so we're very excited that our entire residential line is absolutely refreshed,

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not just from the refrigerant and all the feature sets that I mentioned earlier, really

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focused around ease of install and call it making sure that we have mechanical pressure

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switches and clarified wiring diagrams and simplified wiring.

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And as I mentioned, foul placements and all these different features we put into our residential

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equipment, but also making sure that they look modern and refreshed for the consumers

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themselves.

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And so we're going to have a brand new color palette for our new lines of residential equipment.

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So you will be able to easily identify that way as well as with the appropriate labeling

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that we have coming out.

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Now do we have an anticipation of when we're going to start seeing the residential line

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of A2L equipment?

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Yeah.

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So we've released most of our new residential line already or are to be able to be ordered

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for sale through our distribution partners.

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And so the factories themselves are ready to go.

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And so production's actually starting this month for our new A2Ls and all of our residential

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and light commercial factories.

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So we're absolutely ready to go.

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We actually pulled in the launch of these new A2Ls because originally there was a little

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bit of a later schedule for the launches so that our channel partners could liquidate

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some of the legacy refrigerant inventory that they had.

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But with some, call it uncertainty relative to sell through and other things, we wanted

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our distributors to really be equipped and be ready significantly ahead of the January

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1st, 2025 changeover.

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So we've accelerated our launch schedule by about three months.

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And so we're really excited to be one of the first to launch the A2L equipment into the

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market for our partners, our contractors, and of course for consumers that want to be

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sustainable and have a low GWP refrigerant system in their homes.

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I hear a lot of investment.

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Everything that I hear from you is how much Johnson Controls has invested into the industry

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as a whole.

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I've been to a lot of our equipment manufacturers and the amount of time that it takes to retool

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a facility, the engineering that is involved.

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Like you're talking about just going through wiring diagrams and changing color schemes

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and re-engineering.

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That is a huge investment from a manufacturer to be ahead of the January 1st, 2025 schedule.

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That's a lot for a manufacturer to do and to be able to release an entire product line.

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So how was Johnson Controls able to launch this entire product line way ahead of schedule?

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Because there's going to be a lot of manufacturers that are going to be tugging at the shirt

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tails because they're months and months and months behind Johnson Controls.

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So I think it comes down to our commitment to our partners and to our contractors.

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As we look at the commitment to the residential and commercial HVAC businesses and really

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where the biggest impact of the regulatory transition is happening, Johnson Controls

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has been at the forefront of making sure that we're working very closely with our distribution

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partners and our installer contractors for them to be ready.

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And so what that means is that requires us to be significantly ahead of that timeline

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relative to the investments in engineering.

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So we've dramatically increased the amount of engineering talent that we have from a

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headcount perspective.

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We've invested in new labs.

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So we've expanded our labs in our Wichita, Kansas residential facility and our Norman,

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Oklahoma commercial facility.

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And so we've been retrofitting all of our factories to be, call it A2L production ready,

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investing in new refrigerant charging systems, refreshing a lot of our assembly lines.

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We've actually expanded our commercial HVAC facility in Norman, Oklahoma and doubled the

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amount of output we have from that plant in order to keep up with the demand while simultaneously

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being able to really retrofit some of our legacy assembly lines to be ready for A2L.

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And most importantly, and something we're really committed to around decarbonization

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and general sustainability efforts, we're really, really proud to have gotten a grant

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from the government of the US in order to expand our Wichita facility on the production

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of residential heat pumps.

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So something really, really important and the team is incredibly busy working on new

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production lines, which several of which are underway, one of which has just recently started

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rolling units off the line here.

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And so we're adding more heat pump lines in the United States.

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So design engineered and manufactured in the US and we're really, really proud of that.

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And we're going to continue to make that investment in the factory and add more and more domestic

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heat pump capability for our Wichita, Kansas facility here.

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Yeah, I do believe that that is the future of HVAC, that we're going to be leaning heavily

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on heat pump technology.

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I'm actually working on a curriculum right now for co-climate heat pump installations

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and best practices from a educator perspective, doing introductory into what the next generations

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of equipment are going to look like, because now we're starting to utilize technology to

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expand the capability of our heat pumps.

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And I really look forward to see some of these new products that are coming out.

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I know you've been very active in the co-climate heat pump challenge and really pushing equipment

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to new levels of not just efficiency, but comfort and capability and serviceability.

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So the new products are really starting to head into a nice direction for the contractor

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and for the installation service technicians.

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Yeah, and we're really proud to be a part of the DOE's cold climate heat pump challenge

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on the residential side, among some of our peer sets in the industry.

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And so our unit has surpassed kind of the testing standards that we had set for ourselves.

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And so we're really proud of that.

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And the teams work very hard to get there.

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And we're also one of the pioneers as well with the DOE on the commercial side for our

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rooftops.

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And we've been working very, very closely to launch the cold climate heat pump for our

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rooftop segment.

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And so Johnson Controls is really proud to be a leader in that space as well.

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Excellent.

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All right.

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That is a lot of great information.

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Any other topics you'd like to cover before we hop out of here?

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I would say we're really excited to be a leader in the industry relative to our HVAC segment

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at Johnson Controls.

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We've been making a lot of investments around really the importance of low GWP refrigerants

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and making sure that we have really strong engineering capabilities and our factories

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are ready and our labs are ready.

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But also we're working really, really closely with our distribution partners and our training

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centers around the world to make sure that we have the availability of education and

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communication to our contractor base.

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And so we see that as something that is so incredibly important is to make sure that

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our contractors feel confident in working with Johnson Controls and our residential

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and commercial HVAC products.

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So we're doing a lot of efforts there, both directly with our partners, but also through

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our distributors and other types of avenues to make sure that we're ready for this transition,

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where our partners are comfortable and call it confident in making sure that we're step

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by step with them so that we can make the transition fluid and continue to provide best

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in class products for homeowners and commercial building owners alike.

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Excellent.

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So for anyone wanting to follow up with this conversation and learn more about Johnson

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Controls, resources for education, as well as new product lines, what is a good landing

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place for them to go to?

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So we provide you with the right Johnson Controls address from an IP perspective, and you can

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definitely check us out at www.johnsoncontrols.com.

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And there we do have learning resources for contractors specifically in the residential

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space, but also for commercial.

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We also have a residential light commercial training academy that's available for contractors

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to sign up for and we'll get you these details to post along with the podcast.

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All right, David Budzinski, president of Global Products.

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I appreciate your time today.

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Thank you.

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Good night.

