May 19, 2025 • 7 mins
Carrier Global Chairman/CEO Dave Gitlin discusses the companies plan to hit a target of 6%-8% organic sales growth a year in medium term. He is joined by Bloomberg's Romaine Bostic and Scarlet Fu.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:06):
I'm pleased to say joining us now is David Gitlin.
He is chairman and CEO of Carrier, which is a
world leader in heating, air conditioning and refrigeration solutions. Great
to see you here.
Speaker 1 (00:16):
Great to see you, Scarlette Romaine.
Speaker 2 (00:17):
Thank you for having me so talk us through what's
new when you're investor?
Speaker 1 (00:21):
Daid this year.
Speaker 2 (00:21):
You had an investor day in twenty twenty two, and
it looks like a lot of the goals are similar.
What's different this time around in twenty twenty five, Well, what.
Speaker 3 (00:29):
We said is that we did everything we said we
were going to do. Back in twenty twenty two. We
said we'd grow fifty BIPs a year of margin expansion.
We grew one hundred. We said we'd grow EPs about
ten percent a year. We've grown our EPs fifteen percent
a year. We did what we said on our effective
tax rate. We said what we would do on free
cash full equal to net income. But we did say
that we would grow sales six to eight percent a year.
Speaker 1 (00:50):
The last few years we've grown four.
Speaker 3 (00:53):
So the whole investor day we had four hours this
morning at the NYSE was how do we get consistently
six to eight percent gross. So we introduce a growth
algorithm the market. We said call it low single digits,
be conservative, and then we had a three prong growth
to a three prong strategy to growth. One is outgrowth
the market through products so share gains.
Speaker 1 (01:12):
The second was aftermarket.
Speaker 3 (01:14):
Where we've said aftermarket will grow double digits forever for us.
And the third is kind of a new frontier is
systems offerings. That combination gets us the sixty percent a year.
Speaker 2 (01:23):
So it sounds like there's some tailwinds in your industry.
Walk us through which of it is structural, which of
it is cyclical.
Speaker 3 (01:30):
There's a couple of unique tailwinds, for example, right now
around data centers. If you think about a typical commercial
office building, it may have three chillers.
Speaker 1 (01:39):
A data center may have one hundred and fifty.
Speaker 3 (01:41):
So the massive investments we're seeing in data centers place
right to our strengths. And we've just introduced a brand new,
very unique offering that we call quantum Leap, which is
a combination of traditional cooling with a chiller at air handlers,
but also a new liquid cooling which is a direct
to chip cooling. And our combination is very unique because
we're the only ones in the industry integrating traditional cooling,
(02:04):
liquid cooling, an entire building management system, server management all
into one offering.
Speaker 4 (02:10):
What's been the demand for that, because I know we've
talked a lot on this program about the build out
of data centers and such, but there's also been a
lot of sort of promises to build things and I
know the building hasn't actually started for some of that.
So what's been the uptake here and do you expect
it to increase?
Speaker 1 (02:24):
We do.
Speaker 3 (02:24):
Last year we were about five hundred million in sales
for data centers.
Speaker 1 (02:27):
This year will be a billion, so two x.
Speaker 3 (02:29):
We're now taking orders for twenty six, twenty seven, even
into twenty eight. So the hyperscalers are growing at different
paces right now, but very very strong demand. And what
we're seeing is increased demand for colos, the co locators,
especially in Europe and China.
Speaker 4 (02:43):
Really is there Are you involved at all in some
of the administrations push to help build data center projects
in the Middle East and elsewhere outside of the US one.
Speaker 1 (02:53):
Hundred percent we are.
Speaker 3 (02:54):
We're very much working on new wins in the UAE
that we're announced recently, we have a lot going on
in Saudi Arabia, so we see the Middle East as
a real good growth factor for US.
Speaker 2 (03:02):
You also have a lot going on in the US,
because over the past five years, you've definitely grown and
focused on expanding your US workforce by approximately twenty percent.
How much of this was in response to the changing
political wins, how much of this was a strategic advantage
for you, specifically a strategic advantage.
Speaker 1 (03:20):
We like to be where our customers are.
Speaker 3 (03:22):
About fifty percent of our sales are in the United States,
so you know we've grown our workforce, as you said,
twenty percent.
Speaker 1 (03:29):
Over five years.
Speaker 3 (03:29):
We're by far the biggest player that's headquartered in the
United States in our industry. And what we announced last
week was an incremental billion dollar investment in the United
States over the next five years, which will create four
thousand additional jobs. And these are very technical jobs. It's
a combination of R and D. You can think mechanical,
traditional software and electrical engineering technicians that are out in
(03:53):
the field.
Speaker 1 (03:53):
And we also announced that we're.
Speaker 3 (03:54):
Going to establish a brand new manufacturing factory in the
United States.
Speaker 1 (03:58):
We're very proudly in North Carolina.
Speaker 3 (04:00):
I know, we're in Georgia, we're in Tennessee, but we're
now going to build a new factory. We're looking at
a location like Texas, but we haven't.
Speaker 4 (04:07):
Finalized the choice with regards to some of those hires
and the technical expertise you need for these jobs. Do
those people come to the table with that or do
you have to train them?
Speaker 1 (04:16):
It's a combination.
Speaker 3 (04:17):
That's part of the negotiations with the states right now
as we are looking for some support on some of
the technical training. But we will train about one hundred
thousand technicians a year, so we know how to train
and then integrate on whether it's technicians or even highly
skilled manufacturing labor as well.
Speaker 2 (04:33):
So when it comes to what we're seeing in the
higher education landscape, this idea that the government is going
to reduce funding to universities, how does that impact a
company like you who is looking to increase your footprint
in the US hire more. Is there a direct cause
and effect for a company like Carrier.
Speaker 3 (04:49):
You know, we see it as a very competitive labor
environment for the kind of skills that we're looking for
right now. You know, when we look at technicians, we've
said that we're going to a thousand technicians in the
United States over five years.
Speaker 1 (05:03):
We try to partner with.
Speaker 3 (05:04):
Technical schools in particular, and that partnership has been very strong.
But what we also have to do is establish training
universities within our four walls within Carrier. So we've seen
great success, especially recently over both manufacturing R and D
and technical labor hiring.
Speaker 2 (05:20):
So for those companies that those American companies that are
struggling to bring back jobs, bring manufacturing jobs back to
the US, how would you advise them? What would you
say to them to kind of rethink what they're able
to do?
Speaker 1 (05:32):
You know, it is it is competitive.
Speaker 3 (05:34):
For example, we have a manufacturing site just outside of
Memphis and Tennessee, and we do compete. We'll compete with Amazon,
we compete with FedEx for labor. What our goal is
to create an environment people want to come and people
want to say so. People want upward mobility, People want
to feel like they have a lot of upside on
the compensation side, and they want to be a part
of a company that matters. And one of the things
(05:56):
that we have is our purpose statement is enhancing the
lives we live in the world. We share what we
do matters. We contribute. Our industry contributes to climate change,
so we can be part of the solution that matters
to people that we can create a safer plan and
for generations to come.
Speaker 1 (06:11):
We give there's three and a half.
Speaker 3 (06:13):
Billion people in the world that live in the hottest
parts of the in the world. Only ten percent of
those folks have air conditioning. So we have an ability
to impact people's lives all over the world. And people
want to come to a company and feel like they're
part of something that really matters. So we've invested in
our culture, we've invested in our people, we've invested in
our workforce, and that's been paying off for us.
Speaker 4 (06:31):
Is the growth that you're looking to do right now,
is that going to be primarily organic or are you
looking for acquisitions?
Speaker 1 (06:36):
It's primarily organic.
Speaker 3 (06:37):
You know, we just were coming off the heels of
integrating a thirteen billion dollar acquisition with the German acquisition
that we did with Visama Climate Solutions.
Speaker 1 (06:45):
That's gone phenomenally well. The last year.
Speaker 3 (06:47):
The sales were a little bit lower than we anticipated,
but it's a truly world class company that's going to
create value for years to come. Right now, our whole
theme this morning was on organic growth that's six to
eight percent, with a very strategy to drive it and
a lot of confidence in the team to do it,
and a very different portfolio than we had just five
years ago.
Speaker 4 (07:06):
All Right, I really appreciate you coming here. What's tough
for facing investors for four hours, are facing scarlett for
you know, the last.
Speaker 1 (07:13):
Facing scarlet and you are great. Well, thank you for
having me.
Speaker 4 (07:15):
David get Letting, the chairman and CEO over at Carrier
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:06):
I'm pleased to say joining us now is David Gitlin.
He is chairman and CEO of Carrier, which is a
world leader in heating, air conditioning and refrigeration solutions. Great
to see you here.
Speaker 1 (00:16):
Great to see you, Scarlette Romaine.
Speaker 2 (00:17):
Thank you for having me so talk us through what's
new when you're investor?
Speaker 1 (00:21):
Daid this year.
Speaker 2 (00:21):
You had an investor day in twenty twenty two, and
it looks like a lot of the goals are similar.
What's different this time around in twenty twenty five, Well, what.
Speaker 3 (00:29):
We said is that we did everything we said we
were going to do. Back in twenty twenty two. We
said we'd grow fifty BIPs a year of margin expansion.
We grew one hundred. We said we'd grow EPs about
ten percent a year. We've grown our EPs fifteen percent
a year. We did what we said on our effective
tax rate. We said what we would do on free
cash full equal to net income. But we did say
that we would grow sales six to eight percent a year.
Speaker 1 (00:50):
The last few years we've grown four.
Speaker 3 (00:53):
So the whole investor day we had four hours this
morning at the NYSE was how do we get consistently
six to eight percent gross. So we introduce a growth
algorithm the market. We said call it low single digits,
be conservative, and then we had a three prong growth
to a three prong strategy to growth. One is outgrowth
the market through products so share gains.
Speaker 1 (01:12):
The second was aftermarket.
Speaker 3 (01:14):
Where we've said aftermarket will grow double digits forever for us.
And the third is kind of a new frontier is
systems offerings. That combination gets us the sixty percent a year.
Speaker 2 (01:23):
So it sounds like there's some tailwinds in your industry.
Walk us through which of it is structural, which of
it is cyclical.
Speaker 3 (01:30):
There's a couple of unique tailwinds, for example, right now
around data centers. If you think about a typical commercial
office building, it may have three chillers.
Speaker 1 (01:39):
A data center may have one hundred and fifty.
Speaker 3 (01:41):
So the massive investments we're seeing in data centers place
right to our strengths. And we've just introduced a brand new,
very unique offering that we call quantum Leap, which is
a combination of traditional cooling with a chiller at air handlers,
but also a new liquid cooling which is a direct
to chip cooling. And our combination is very unique because
we're the only ones in the industry integrating traditional cooling,
(02:04):
liquid cooling, an entire building management system, server management all
into one offering.
Speaker 4 (02:10):
What's been the demand for that, because I know we've
talked a lot on this program about the build out
of data centers and such, but there's also been a
lot of sort of promises to build things and I
know the building hasn't actually started for some of that.
So what's been the uptake here and do you expect
it to increase?
Speaker 1 (02:24):
We do.
Speaker 3 (02:24):
Last year we were about five hundred million in sales
for data centers.
Speaker 1 (02:27):
This year will be a billion, so two x.
Speaker 3 (02:29):
We're now taking orders for twenty six, twenty seven, even
into twenty eight. So the hyperscalers are growing at different
paces right now, but very very strong demand. And what
we're seeing is increased demand for colos, the co locators,
especially in Europe and China.
Speaker 4 (02:43):
Really is there Are you involved at all in some
of the administrations push to help build data center projects
in the Middle East and elsewhere outside of the US one.
Speaker 1 (02:53):
Hundred percent we are.
Speaker 3 (02:54):
We're very much working on new wins in the UAE
that we're announced recently, we have a lot going on
in Saudi Arabia, so we see the Middle East as
a real good growth factor for US.
Speaker 2 (03:02):
You also have a lot going on in the US,
because over the past five years, you've definitely grown and
focused on expanding your US workforce by approximately twenty percent.
How much of this was in response to the changing
political wins, how much of this was a strategic advantage
for you, specifically a strategic advantage.
Speaker 1 (03:20):
We like to be where our customers are.
Speaker 3 (03:22):
About fifty percent of our sales are in the United States,
so you know we've grown our workforce, as you said,
twenty percent.
Speaker 1 (03:29):
Over five years.
Speaker 3 (03:29):
We're by far the biggest player that's headquartered in the
United States in our industry. And what we announced last
week was an incremental billion dollar investment in the United
States over the next five years, which will create four
thousand additional jobs. And these are very technical jobs. It's
a combination of R and D. You can think mechanical,
traditional software and electrical engineering technicians that are out in
(03:53):
the field.
Speaker 1 (03:53):
And we also announced that we're.
Speaker 3 (03:54):
Going to establish a brand new manufacturing factory in the
United States.
Speaker 1 (03:58):
We're very proudly in North Carolina.
Speaker 3 (04:00):
I know, we're in Georgia, we're in Tennessee, but we're
now going to build a new factory. We're looking at
a location like Texas, but we haven't.
Speaker 4 (04:07):
Finalized the choice with regards to some of those hires
and the technical expertise you need for these jobs. Do
those people come to the table with that or do
you have to train them?
Speaker 1 (04:16):
It's a combination.
Speaker 3 (04:17):
That's part of the negotiations with the states right now
as we are looking for some support on some of
the technical training. But we will train about one hundred
thousand technicians a year, so we know how to train
and then integrate on whether it's technicians or even highly
skilled manufacturing labor as well.
Speaker 2 (04:33):
So when it comes to what we're seeing in the
higher education landscape, this idea that the government is going
to reduce funding to universities, how does that impact a
company like you who is looking to increase your footprint
in the US hire more. Is there a direct cause
and effect for a company like Carrier.
Speaker 3 (04:49):
You know, we see it as a very competitive labor
environment for the kind of skills that we're looking for
right now. You know, when we look at technicians, we've
said that we're going to a thousand technicians in the
United States over five years.
Speaker 1 (05:03):
We try to partner with.
Speaker 3 (05:04):
Technical schools in particular, and that partnership has been very strong.
But what we also have to do is establish training
universities within our four walls within Carrier. So we've seen
great success, especially recently over both manufacturing R and D
and technical labor hiring.
Speaker 2 (05:20):
So for those companies that those American companies that are
struggling to bring back jobs, bring manufacturing jobs back to
the US, how would you advise them? What would you
say to them to kind of rethink what they're able
to do?
Speaker 1 (05:32):
You know, it is it is competitive.
Speaker 3 (05:34):
For example, we have a manufacturing site just outside of
Memphis and Tennessee, and we do compete. We'll compete with Amazon,
we compete with FedEx for labor. What our goal is
to create an environment people want to come and people
want to say so. People want upward mobility, People want
to feel like they have a lot of upside on
the compensation side, and they want to be a part
of a company that matters. And one of the things
(05:56):
that we have is our purpose statement is enhancing the
lives we live in the world. We share what we
do matters. We contribute. Our industry contributes to climate change,
so we can be part of the solution that matters
to people that we can create a safer plan and
for generations to come.
Speaker 1 (06:11):
We give there's three and a half.
Speaker 3 (06:13):
Billion people in the world that live in the hottest
parts of the in the world. Only ten percent of
those folks have air conditioning. So we have an ability
to impact people's lives all over the world. And people
want to come to a company and feel like they're
part of something that really matters. So we've invested in
our culture, we've invested in our people, we've invested in
our workforce, and that's been paying off for us.
Speaker 4 (06:31):
Is the growth that you're looking to do right now,
is that going to be primarily organic or are you
looking for acquisitions?
Speaker 1 (06:36):
It's primarily organic.
Speaker 3 (06:37):
You know, we just were coming off the heels of
integrating a thirteen billion dollar acquisition with the German acquisition
that we did with Visama Climate Solutions.
Speaker 1 (06:45):
That's gone phenomenally well. The last year.
Speaker 3 (06:47):
The sales were a little bit lower than we anticipated,
but it's a truly world class company that's going to
create value for years to come. Right now, our whole
theme this morning was on organic growth that's six to
eight percent, with a very strategy to drive it and
a lot of confidence in the team to do it,
and a very different portfolio than we had just five
years ago.
Speaker 4 (07:06):
All Right, I really appreciate you coming here. What's tough
for facing investors for four hours, are facing scarlett for
you know, the last.
Speaker 1 (07:13):
Facing scarlet and you are great. Well, thank you for
having me.
Speaker 4 (07:15):
David get Letting, the chairman and CEO over at Carrier
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