A replacement parts facility that employs 39 at Rheem’s Fort Smith air-conditioning manufacturing plant will move to Greensboro, N.C., according to a Rheem statement issued Wednesday.
The employees will be offered employment in the Fort Smith manufacturing operation, according to the statement.
The replacement parts business has long been housed in warehouse space at the Fort Smith plant. In 2001, Rheem expanded the operation by creating a network of retail stores — called PROSTOCK stores — geared to market and sell to heating, ventilation and air-conditioning contractors. The company estimates 105 PROSTOCK stores will be open by the end of 2004.
Double-digit growth rates in the PROSTOCK operation have forced Rheem to build the 180,000-square-feet Greensboro distribution facility.
“As a result (of PROSTOCK business growth), the Replacement Parts business has outgrown the capacity of current modest Fort Smith warehouse space to support its current and projected growth,” Rheem said in the statement.
Transportation and access to markets were the primary reasons for choosing Greensboro over Fort Smith, said Ed Raniszeski, director of communications for Rheem.
Federal Express is building a large sorting and shipping hub in Greensboro. Also, the Greensboro location will be near 85 percent of what Rheem calls its “current and projected market demand” for replacement parts. Fort Smith is within just 41 percent of the market.
Raniszeski said move will not affect Rheem’s growth plans for its Fort Smith manufacturing plant.
“The bottom line is that nothing really changes for the Fort Smith manufacturing facility as far as employment,” Raniszeski said in an e-mail statement. “Fort Smith remains key to our manufacturing plans and plays an important role in our market share growth plans. We only see good things in the future for Fort Smith and Rheem.”
Growth in Rheem’s replacement parts business could be fueled by the increase of shipments in the air-conditioning industry.
According to the Arlington, Va.-based Air-Conditioning and Refrigeration Institute, April 2004 U.S. factory shipments totaled 765,362 units, up 27 percent over April 2003. For the year, 2004 shipments are up 9 percent over the same period in 2003. Factory shipments in 2003 set a record with 6,807,262 units shipped, up 1 percent over 2002.
The institute does not collect replacement part data for the industry, said Ed Dooley, vice president of communication and education for the institute.
With up to 70 percent of units shipped being replacement units, Dooley said there is a large market for replacement parts. Also, the institute estimates that 87 percent of U.S. homes have a central air-conditioning unit.