In its third generation, this family company is thriving
Since 1997, David Brown (left) has been president and CFO of Vermont Heating & Ventilating in Winooski, a company founded by his grandfather, Nathan Brown (in the sketch by by Vermont artist Noa Chaikin). David’s father, Kenneth Brown, 80, one of Nathan’s four sons, is the only other remaining family member with the company.
by Virginia Lindauer Simmon
In 1997, Dave Brown was just 30 years old when he was, in his own words, “thrust” into the job of president at Vermont Heating & Ventilating (VHV) in Winooski.
He wasn’t unfamiliar with the business — he had grown up with it. His grandfather, Nathan Brown, had started the company in 1949 with a partner, Jack O’Brien; cash from a life insurance policy and some treasury bonds; and a $500 loan from his sister. They worked out of a garage on Pine Street in Burlington.
“My grandfather was born in Quincy, Mass., and spent a number of years in New York City,” says Dave. “In 1944, he came to Vermont, farmed for a while, and realized that farming wasn’t doing a good job feeding his family.”
Nathan had worked building warships during World War II — “Liberty ships they called them,” says Dave. “He learned a bit about ventilating and heating systems in those ships and decided to put that knowledge to use.”
Through the 1950s and ’60s, Nathan’s four sons, Gerald, Kenneth, David, and Peter; one son-in-law, Charlie Spence (married to Nathan’s daughter, Carol); and Robert Miller (now the owner of R.E.M. Development) became partners. When Nathan retired in 1970, Gerald (Jerry) became president. Ken, Dave’s father, came on board in 1958, at age 28.
By the time he joined the company, Ken had spent four years in the Navy and farmed for several years after that. He fondly recalls Jack O’Brien as “a little guy with a big cigar,” adding that Nathan bought O’Brien out after a year in business, but they stayed friends. O’Brien went on to serve in the Vermont Senate from 1960 to 1975.
“By the time I started, says Ken, “the company had moved from Pine Street to South Winooski Avenue, then to lower Pearl Street, and then to 1891 Williston Road, where it was for a long time. In 1990, we moved to Hercules Drive in Colchester, then here to Tigan Street in 2001.” VHV bought the Tigan property in 2007.
Over the years, Dave says, the key family players were Nathan; Ken; Jerry; Charlie Spence, his son, John, who died unexpectedly in 2006, and his son-in-law, John Moore; and Dave. “Nathan’s other two sons worked in the business here and there,” says Dave, “but they were not here continuously.”
Dave grew up on the family horse farm in Jericho, where Ken still lives, although the farm was sold some time ago. In his teen years, studying at Mount Mansfield Union, Dave worked at the business, “doing what teens do,” he says, “sweeping floors, working out on the jobsite — just doing odd jobs as a laborer.
“I remember at the time, we were working on a project at IBM and my brother, Toby, and I used to have to be at work at 6, working 10-hour days. It gave me a flavor of what that life was like.”
Following graduation in 1984, he earned his degree in mechanical engineering from the University of Vermont. He confesses, “After the first year or two, I was scratching my head and asking why I did that,” he says, although he continued and joined the company immediately after graduating in 1988.
Ken recalls the moment when, after two years with the company, Dave, who by then was in charge of design-building and engineering, came to him and said, “You know, Dad, I don’t like this.”
“He wanted to go back to school and get his MBA,” says Ken.
The decision was a tough one. “My uncle, in particular, was disappointed I was leaving, but he understood,” says Dave. He left for Northeastern to earn his master’s degree, after which, still not ready to return to the family business, he took a job in finance with Mobil Corp., which moved him to Virginia.
He worked in Virginia for four years at various companies. In 1994, at his going-away party for one of those jobs — Martin Marietta — he met his future wife, Kelli McGonigal, a co-worker he hadn’t encountered until then.
Meanwhile, says Ken, “Jerry wanted to retire, and nobody in the company, we felt, could take it over. Jerry and I were only a couple years apart, and I didn’t want to.” They wanted Dave.
Says Ken, “I called David and said, ‘Jerry’s going to retire.’”
Dave laughs at the memory. “Between Jerry, and mostly my father, they twisted my arm and talked me into coming back. That was in ’96, so within a year of coming back, Jerry retired and I became president.”
Kelli played a big part in the decision. They weren’t yet married, but had been dating for two years. She agreed to make Vermont her home base, and commuted each week to Florida for her job with Price Waterhouse. A year or so before they married in 1998, Kelli found a job with Green Mountain Coffee Roasters, where she worked until 2005, when the second of their three children was born.
Dave says that when he came back to the business in 1996, “we were basically what was called a sheet metal contractor. Sheet metal contractors usually work for mechanical contractors, which work for general contractors, which work for the owners.”
The company had developed a niche of building clean rooms, born out of its history of building them for IBM, and in 1980 started a division called Quality Air Control. “Most of that work is out of state — Massachusetts, primarily — but we build and design clean rooms,” says Dave.
Another division, Fab-Tek, which also grew out of VHV’s IBM work, split off as a separate company in the late 1980s and was sold in 2000. “Other than that,” Dave adds, “we were just a sheet metal contractor.”
This changed in 1998, when the decision was made to pursue two new directions. One was to become a full mechanical contractor. “That was a tricky transition, because we were going from working for certain clientele to becoming competitors, so we did it softly and slowly.”
The second move was to beef up the company’s service component. “We had a service arm of a few people available to maintain and repair equipment. It was viewed as a necessity,” says Dave.
The decision was to provide a full host of repair and maintenance services and use the service aspect to bring in construction clients instead of the usual practice of picking up service customers from construction clients.
“That’s made a big impact in terms of profitability,” says Dave, “because service is more profitable than construction, and it is not cyclical.” This is not unique, he adds, laughing. “We have a lot of competition.”
Creativity has played a key part in evolving the company’s direction. The company was asked to help Gadue’s Dry Cleaning in Burlington find ways to save money by heating water with the wasted steam venting through the roof during operation.
“Dick Wilcox from our engineering department took this idea and ran with it,” says Dave, “designing a simple system that would end up saving Mark Gadue over $8,000 per year in natural gas costs.” Vermont Gas Systems paid for more than half of the installation as part of its demand-side management and energy conservation program.
VHV has also done similar work for other companies in the state.
Although from late fall 2008 to the fall of 2010, the company struggled for work in the construction side of the business, the service part has continued to expand, says Dave.
In the last three years, the company has bought two service companies — Pennock Refrigeration in Littleton, N.H., and Bedard Heating and Cooling in Georgia. “They got us into a different client base,” says Dave.
VHV occupies about 19,000 square feet of its 27,000-square-foot building and employs 130 people, about 100 of whom are in production (three-quarters in construction; one-quarter in service). The other 30 include engineers, project managers, and administrators. “Our engineering department is seven people,” says Dave, “which is fairly significant.”
Away from the office, Dave spends as much time as possible with Kelli and their three children. “I spend time helping coach soccer teams with my kids and going to a lot of school functions,” he says. “We go snowboarding, especially with my older daughter, who’s 10. I also enjoy basketball and tennis. We live on Lake Iroquois, so in summer spend a lot of time tubing, waterskiing, and wakeboarding.”
The family dynamic at work has changed a great deal from the days when Dave had an uncle, cousin, father, and other relatives to consider. After retiring, Jerry helped found the Vermont Council for Quality. He died last year at 81. Now it’s only Dave and Ken, who, at 80, has cut back to five hours a day.
Dave expresses gratitude for peer groups — a local group of non-competitors he’s met with for at least 10 years, and a national one of competitors outside the area — which have been helpful from both a management and an industrial perspective. “We learn a lot from these companies,” he says.
He plans to continue expanding the company’s services. One is to do Building Information Modeling, a buzzword for the CAD-design process of completely constructing a building virtually and in detail, which Dave calls “the next step in building a project.” Another expansion is doing more pipe prefabrication, “a real productivity improver.”
“It’s all about production and doing things better and faster than anybody else,” he adds. “My mantra is ‘safety, quality, and productivity.’” •