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Letter to HVAC contractors from Lennox
June 29, 2006
Raw material demands continue to drive costs for commodities like Copper, Aluminum and Steel higher and higher. The climb was steady in the first quarter reaching a short plateau in April. Costs then took another sharp turn up reaching a new peak near the end of May. Copper alone has increased by more than 90% since the 2006 production plan was completed. When you add increases in the price of steel, aluminum, fuel and all of the downstream components built with those materials, it is clear that these costs will have to be recovered with increased prices before the end of the year.
Effective on purchases made as of Tuesday, August 1st residential equipment prices will increase from 3 to 10% on all Lennox and Aire Flo products. Products that contain more copper and aluminum (coils and condensing units) will receive larger increases. While products with primarily steel content (furnaces) will receive less. Your territory manager will have a "quick reference" chart to help you make changes to your retail price pages or books. Coils and Air Handlers purchased from 3rd party sources will also receive increases consistent with the costs passed along to us from the manufacturer.
While this volatility appears to be with us to stay, at least for the near future, it is our intent moving forward to attempt to standardize future cost adjustments where possible. We anticipate a twice a year adjustment and will strive to deliver required updates in January and July.
We understand your frustration with work required to update your retail prices but do point to our many competitors who are also adjusting costs at this time. The industry has seen tremendous change over the past 18 months and it appears that it might not be over yet. We at Lennox thank you for your purchase and continued support during this fast changing business cycle.
Paul Boartz
District Manager
South Texas
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