The 2,350 people or so who work at Trane Inc. in La Crosse have had a wild ride in 2007. Earlier this month, American Standard, which bought Trane in 1984, completed a change in name to Trane. Rumors circulated that Trane might even move its headquarters from New Jersey to La Crosse. That looked like nothing but good news. Then, Monday, in a reported $10 billion deal, Ingersoll-Rand Co. announced it will acquire Trane Inc. and create one of the world’s largest makers of commercial and residential home air conditioners, refrigerators for trucks and stores, and other climate control products. So, now where does the La Crosse Trane operation stand? That was the question on a lot of people’s minds after the sale was announced. The answers might not come for a while. Trane, which was founded in La Crosse in 1913, is a great example of the strength of branding — when the quality of the product lives up to the brand. Trane makes excellent quality air conditioning, ventilating, heating and building management equipment, and systems for large commercial buildings. It’s done so for a long time. American Standard recognized that, restructured its operations and took the brand name of Trane for the entire company. The $10.1 billion cash and stock deal announced Monday is one of the largest industrial buyouts in recent years. It gives Ingersoll-Rand, which makes Thermo King refrigerated trucks and Hussmann refrigerated display cases, access to Trane’s building and transportation cooling systems. The combined company will be No. 2 in air conditioning, after the $14 billion-a-year business of Carrier Corp., a unit of United Technologies Corp. Trane employs more than 29,000 people and has 29 production facilities around the world. The two companies combined currently have a combined 64,000 employees in 109 manufacturing plants worldwide. Of course, the concern in the western Wisconsin region is for those 2.350 employees who work for Trane in La Crosse. That number of workers is down from a high of 4,200 in the 1980s, but that reflects changes in manufacturing processes — with more technology and automation — than necessarily a downturn in business. Trane hired about 100 production workers in La Crosse this year. But, in late September, the company announced tentative plans to lay off up to 145 La Crosse workers when it consolidates parts distribution centers next year in Memphis, Tenn. The La Crosse distribution center was scheduled to close. It is not known if this change will still happen after the merger with Ingersoll Rand. The La Crosse plant of Trane still makes its flagship EarthWise CenTraVac Chiller, as well as absorption water chillers. The company has increased production and size selection of EarthWise chillers made in La Crosse, offsetting the move of some other product lines elsewhere. Trane had a local payroll of more than $140 million in La Crosse in 2006. It paid out another $20 million in health benefits to its La Crosse employees. In 2006, Trane, its employees and the American-Standard Foundation contributed nearly $275,000 to local organizations and activities. Trane is one of the largest property taxpayers in the city and county of La Crosse. The company paid more than $1 million in property taxes in 2006. Another $1 million was paid in state and county sales taxes. So, Trane is still a major player, arguably THE major player among manufacturers, in the La Crosse area and western Wisconsin region. But, any deal of this magnitude also prompts uncertainties and concerns at the local level. Will Ingersoll Rand have the same appreciation for the strong ties Trane has had with La Crosse? Could the local operations be reduced or even closed? Corporate officials in such deals usually say reassuring things in initial announcements, but sometimes realities change. The deal is expected to close in spring 2008 and requires approval by regulators and Trane shareholders, as well as usual closing conditions. So, we’ll have to wait until then to start getting concrete answers.
Trane bought more than $30 million in goods and services from area firms, and $50 million from businesses throughout the state. More than 1,500 international visitors, U.S.-based customers, sales office personnel and service technicians visit Trane in La Crosse. The financial impact of all these visits is estimated at more than $2 million per year.
Analysts believe the Ingersoll Rand deal will give the combined companies opportunities for growth, especially in the air conditioning market in emerging countries. That could filter down to more work at the La Crosse facilities.
