THE owner of acr manufacturer Carrier is to take “aggressive action” to cut costs as a result of the global recession hitting sales in its residential and transport refrigeration sectors.
Louis Chenevert, the CEO of United Technologies Corporation (UTC), spoke of “aggressive restructuring” which would see Carrier cutting labour costs by 25% this year.

Speaking at a conference in Florida this week, Chenevert said r&d is to be slashed by 20% and administrative expenses will be cut by 15%.

UTC’s first quarter sales are down 12% to $1.7bn, resulting in the company looking to make savings of £1bn this year.

Operating profit at Carrier is expected to fall by between $375m and $425m this year, down from $1.32 billion in 2008.

A victim of the restructuring is Tyler Refrigeration, Carrier’s refrigerated catering equipment manufacturing business. A Carrier announcement earlier this month spelled the end for Tyler’s factory in Michigan and the sale of five of Tyler’s branches and certain other assets to fellow US commercial refrigeratiion manufacturer Hill Phoenix.

Production at the factory will be ramped down during the course of 2009 as existing customer orders are fulfilled and then closed. Hill Phoenix designs and manufactures commercial refrigerated display merchandisers, refrigeration systems, integrated power distribution systems and walk-in coolers and freezers

Announcing the decision, Philippe Delpech, president, Carrier Commercial Refrigeration, expressed regret at the closure but confirmed Carrier’s continued commitment to the refrigeration business.

“Carrier has a large and successful food retail refrigeration business overseas especially in Europe and emerging markets, with industry leading products incorporating cutting edge technologies, a cost leadership position, a turnkey delivery model and strong aftermarket services,” he said. “We will continue to focus on further strengthening and growing that business.”

Carrier’s Louis Chenevert went further in his response to a question asked at the Florida conference. He described Linde as a “wonderful business” and pointed to Linde’s “world class product line” and its good position within the European market. “The same was not true of Tyler,” he said, describing it as “a low return business and somewhat of a distraction to the Carrier team.”

In a separate deal at the beginning of May, Carrier signed a joint venture agreement with Watsco to distribute Carrier, Bryant, Payne and Totaline residential and light commercial products in the US southern states and selected territories in the Caribbean and Latin America. Watsco is the largest independent distributor of hvacr in the US. Watsco own 60% of the venture, to be called Carrier Enterprises, and Carrier own 40%.