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My dad bought a failing HVAC business 30+ years ago, then made it profitable over the years and sold it back to his employees last year. He had the option to ta
by elawler24 2y ago
My dad bought a failing HVAC business 30+ years ago, then made it profitable over the years and sold it back to his employees last year. He had the option to take a few highly lucrative PE deals, but it was clear they would squeeze the life out of the employees and customers he had worked hard to support over many years. I can’t imagine how low quality this kind of trade work will become if PE owns them all. It will be similar to vet, dentist, and dermatology clinics which now feel like factories that don’t care about the humans on the other end - often employing fear tactics and sales quotas to incentivize upsells.
- bayouborne 2y agoHighly efficient Mini-split heatpumps are becoming simpler for the moderately technical homeowner to install everyday. 5-6 years ago installation typically involved a vacuum pump, a gauge set, sometimes a flaring tool to re-dress factory terminated line fittings, etc. Fairly inexpensive new 4th gen Mini-split heatpumps are drop-shipped from Amazon, have pre-evacuated line-sets that just bolt up to the inside head and pre-charged outside compressor units. I wonder how wide availability of these relatively cheap units are going to impact the bullish picture described in the WSJ article.
- namaria 2y agoAmerican capitalism really worked way better when it had a geopolitical competitor. Funny how that works.
- dopylitty 2y agoI'm glad you mention dentists/vets. I make it a point to verify local businesses aren't PE owned before I will use them. Of course one of the problems with PE is they hoover up _all_ the businesses in an area so you don't have a choice. There really needs to be regulation in this area preventing a single beneficial entity/controlling entity from buying/owning more than a few percent of a certain type of business in an area.
- wellthisisgreat 2y agoHow do you find out who owns the business? Literally what kind of question would you ask on the phone?
- chubot 2y agoHm what’s the best way to look up the owner of a business? I share this viewpoint on dentists and doctors
- cj 2y agoThe fastest and simplest way is to ask them directly by calling or emailing. Searching for information about private legal entities, while possible, is inconvenient and usually incomplete/sparse.
- data_maan 2y agoBut why would they respond with that information? PE already has a pretty bad press, so they know that customers are calling only because PE is a red flag. They could just serve some meaningless half-truth and try to confuse you.
- lazide 2y agoPE often doesn’t care because most folks don’t know what is going on. Private practitioners are usually proud of it.
- dboreham 2y agoOur vet graduated before I was born, and I'm really old. He still charges 1978 prices. Hoping he hangs on until our last batch of cats goes on to coyote heaven.
- groggo 2y ago:(
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- Retric 2y agoThere’s a PE cycle in several industries because economies of scales don’t help nearly as much as a skilled workforce. So PE companies can’t maintain customer service while maximizing profit and customers move to new small business which grows until owner wants out, and repeat. I find it fascinating which industries are vulnerable and which aren’t. PE has been more successful with morticians because they can more effectively own an area and people only deal with so many funerals. Vets on the other hand seem to be easily taken over despite regular visits and skilled workers, presumably regulatory bodies play a major role? No really sure.
- hyeonwho4 2y agoThe model of PE in dentistry / veterinary clinics is to buy out all the private clinics in a region, then gradually raise prices. Small businesses would pop up, but the training horizon for new dentists / vets is quite long. It isn't really about economies of scale so much as using local monopolies to set prices. They have a good moat because regulatory bodies have not regulated monopolies for 30 years, and professional organizations limit entry to each field.
- rqtwteye 2y ago"then gradually raise prices" It's not exactly gradually. I would call it "aggressively". At least for vets.
- ethbr1 2y agoCurious discovery on my part that VCA Animal Hospitals is now owned by Mars Inc (as in, chocolate bars), technically not PE as it's a private family-owned company.
- bald 2y agoMars is one of the biggest manufacturers of pet food in the world
- jongjong 2y agoIn a way, our current system has similar kinds of incentives as Communism. The core incentive is to avoid suffering. There is no upside, only downside protection. The secondary incentive is usually to sabotage every aspect of the work that the boss isn't paying attention to because 'hidden dirt' is the only way for an employee to gain leverage over their employer. Unlike in communism, labor is not associated with any higher social ideals. There is literally zero reason for anyone to do things right. This is why we have enshitification. The system needs goodwill in order to function well. Without goodwill, we get piles upon piles of hidden dirt which accumulate. We end up with products and experiences which seem great superficially, but only so long as you don't do anything unexpected like peeking under the carpet.
- heymijo 2y ago> often employing fear tactics and sales quotas to incentivize upsells This already happens. The most common AC repair needed is a new capacitor. It's a $20 part. Call your dad's business, you probably get a quote for $100-ish and it's fixed in ten minutes. Call a PE owned shop and they are likely to tell you that your entire system needs replaced. Quote $5-$8k. Reports like this are already common place, and the roll-ups of former small-businesses in industry like HVAC that the PE people celebrate will only make this worse for customers.
- bluedevil2k 2y agoTry $250 for a capacitor here in Texas - they know you can’t afford to take a few days to shop around due to the heat. What I’ve found works over the years: get the phone number of a few HVAC guys as you encounter them and offer them $50 to come when you need them. They’ll never pull the “you should cal l my employer” because most are contractors who need to buy their own equipment.
- gh02t 2y agoI had a bad capacitor this past summer and ended up having to drive over an hour because the only place in town that would sell me a capacitor was Grainger on the opposite end of [moderately large town]. Everywhere else I called declined to sell me one for "safety reasons". Several did offer to send a tech out to do it for me...
- sidewndr46 2y agoThis is why you call a supply house and not an HVAC company. As long as you aren't trying to buy refrigerant they really don't care.
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- fshbbdssbbgdd 2y agoWhen my AC broke on the weekend, I got a capacitor from Amazon that arrived next day.