UTC Chief Talks Trump – A Wall Street Journal Exclusive

May 22, 2017

Photo: Ken Fallin


By Joseph Rago
The Wall Street Journal

United Technologies head Gregory Hayes on how Trump kept the Carrier plant open — and the high-paid factory jobs he’s having trouble filling.

New York

‘It’s an uncomfortable thing when the president-elect calls,” says Greg Hayes. “That’s a powerful, persuasive perch.” The CEO of United Technologies is recounting the finale of his company’s 2016 cameo as the Jeb Bush of corporate America.

Perhaps it was inevitable that Donald J. Trump would conscript a blue-chip firm as his political foil. United Technologies Corp. is a multinational manufacturing conglomerate, with subsidiaries like Pratt & Whitney and Otis Elevator that were founded 90 and even 160 years ago, that makes everything from escalators to jet engines. Last November UTC’s Carrier unit, which makes heating, ventilation and air conditioning equipment, became a symbol of how Mr. Trump claimed trade and globalization had undermined American workers.

“My wife calls me ‘patient zero,’ ” Mr. Hayes says with a good-natured laugh, “because I was kind of the first one in the hopper and I survived, and so really a measure of success is the fact that we were able to deal with this.” He visited the Journal this week to discuss what it’s like to be a chief executive riding a political whirlwind—and the obligations of business leaders in an age of economic populism.


Mr. Hayes played football at Cornell, transferred to Purdue, and then joined Sundstrand, which was acquired by United Technologies in 1999. He rose through management and took over in late 2014. He had a rough first year, with shares slipping 18%. In 2015 UTC rolled out a restructuring plan to shed $1.5 billion in costs over three years.

The plan included closing two high-cost campuses in Indiana. One, outside Indianapolis, made gas furnaces. The other, in small-town Huntington, made electronic circuit boards. About 2,100 jobs would be lost in total, while furnace production would shift to Monterrey, Mexico.

Most of the furnace industry—both UTC’s competition and suppliers—has already moved to low-cost Mexico. The Indianapolis plant is an old-fashioned production line, where a component moves every couple of seconds and an operator performs a rote task, like installing fasteners in a handle. The jobs are relatively low wage and low skilled.

Mr. Hayes and his board concluded that closing the plants “was the right thing to do for the business long-term” to remain competitive in the market. If the larger business wasn’t profitable, then nobody would have job security. He thought UTC “could tell a story” about the higher-wage, higher-skilled domestic jobs it was creating in aerospace.

United Technologies also offered workers a yearslong lead time to plan their next steps, generous severance, and its 20-year-old Employee Scholar program, which pays full freight for two or four years of college education or vocational technical training for all employees, even after a plant shuts down.

“Look, we know there’s a dislocation associated with trade,” Mr. Hayes says. “There will be people left behind, and it’s the measure of how we treat those people and how we deal with those people that’ll determine whether or not we are ultimately successful.” Combined with globalization’s benefits — such as reducing the share of the world’s population that lives in poverty to 10% from 42% in 1981 — he thought all this would be enough to gut out the politics.

“My political prognostication skills are about zip,” Mr. Hayes concedes. A familiar business terror struck in February 2016: a cellphone video that outraged the internet and then hit cable news. The 3½-minute recording, now viewed 3.9 million times on YouTube, showed a Carrier executive informing workers on the shop floor that their jobs would be moving to Mexico. “I want to be clear, this is strictly a business decision,” the executive said, amid jeers.

History records hardly a campaign stop where Mr. Trump failed to assail Carrier. The candidate provided a flavor as early as Feb. 27, 2016, at a rally in Bentonville, Ark. “Let me tell you about Carrier,” Mr. Trump said. “So I watched Carrier, because it just happened a week ago, and I watched these people, they were devastated. They were there for a long time. Good people, good air conditioners. I buy a lot of Carrier air conditioners. I’m not buying them anymore.”

The candidate promised to call the CEO: “They’re going to say it’s terribly unpresidential, but I don’t care, all right? . . . I’d say to the head of Carrier, congratulations on your new plant. But here’s the story, folks. Every single air conditioner that you make as it passes the border, and we will have a real border, OK? We will have a real border, the illegals will not be able to carry those air conditioners in.” Goods that crossed the border, “every single one, you’re going to pay a 35% tax on, OK?”

Nine months later, when Mr. Hayes received Mr. Trump’s postelection call, he notes that “there was no threats, there was no quid pro quo, you do this or else.” As he recounts the conservation:

“He said, ‘Greg, you’ve got to help me.’ I’m like, ‘Sir, you know, we have looked at this, this is a cost — there is just no way. We got the plant already built down in Mexico.’ He goes, ‘No, Greg, you don’t understand. You got to help me. You got me elected. . . . I didn’t have a great campaign, a great focus on the campaign early on, but once I got this Carrier thing I used it everywhere.’ I said, ‘Yeah, I noticed.’ ”

Mr. Hayes agreed to “take a hard look.” His “biggest fear,” he says, wasn’t tariffs but reputational damage. Carrier air conditioners are among UTC’s few consumer-facing products, and “having Mr. Trump tarnish the brand — there was a huge cost to that.” Then again, the president also didn’t have to make the same 35% threat personally that he’d made in public hundreds of times.

UTC stayed, and also left. Indiana gave the company $7 million in tax incentives over a decade, and Carrier will invest $16 million to modernize the gas-furnace factory. The decision saved about 800 factory jobs in Indianapolis, as well as 300 HQ and engineering jobs, but the Huntington facility closed.

Mr. Trump dropped by Carrier in December as a conquering hero. The president-elect mused about his new friendship with “a great executive”: “I think if I lost, he wouldn’t have returned my call. I don’t know if — where is Greg? If I lost and called you, I don’t think you would have called. I would have tried for you, but I think it would have been tougher, right? What do you think, Greg? Yes, he’s sort of nodding yes, you’re right.”

Mr. Hayes hasn’t been invited to Mar-a-Lago, but he did join Dow Chemical CEO Andrew Liveris’ White House advisory council on manufacturing. “The rhetoric on trade is not helpful,” Mr. Hayes says, but he thinks Mr. Trump is “trying to move in the right direction” on deregulation and tax reform, plus he’s a better listener than his predecessor.

The drawback of the tumultuous Trump presidency so far, Mr. Hayes says, is uncertainty: “It’s bad for business, and there’s certainly a lot of uncertainty being created on a daily basis that is not helpful for us. For my people, they’re looking and say, ‘What do we do?’ I say, ‘Well, just relax, they’ll all be fine, right?’ You need to take everything with a bit of a grain of salt that comes out of Washington these days, and understand that there is a process, things will work themselves out.”


A populist might say that a company expecting sales of between $57.5 billion and $59 billion in 2017 — more than Goldman Sachs or Coca-Cola — can afford to pay more for American labor. The Carrier deal cost UTC about $25 million a year over the original plan, or about two cents a share. “We’re a big company,” Mr. Hayes says. “We can certainly deal with that kind of financial headwind.”

Still, there’s a cost. “I truly believe that if you have open markets, and you have the ability to let capital flow to most efficient uses, you are going to get better results than if you try to direct capital,” he says. But he admits: “I got it completely wrong, in terms of the political sentiment in the U.S., and I—you know, frankly I should’ve known better, because there is a large portion of the population that has been disenfranchised by globalization.”

Mr. Hayes’s solution is to improve education, specifically with a national apprenticeship program that would guide local public-private partnerships to train and prepare the workforce better. He knows the problem firsthand: “I’ve got thousands of job openings.”

Do you really?

“Thousands,” he replies. “A lot of this is because we’ve got growth in business on the aerospace side, but we’ll be adding thousands of jobs in the next three years, and right now I cannot hire mechanics who know how to put together jet engines. But it’s not just jet engines. We also make fan blades, other products, very sophisticated things. These are the high-value manufacturing jobs that America can actually support.”

A Pratt machinist earns $34 to $38 an hour, which with overtime works out to more than $100,000 a year — “pretty good money,” Mr. Hayes says. The positions can be filled by high-school graduates with “basic competencies in math and English” sufficient to, say, read a blueprint.

Mr. Hayes’s apprenticeship idea is about teaching such candidates the technical skills they need for the manufacturing jobs of the future —  the kind that aren’t becoming obsolete due to automation and artificial intelligence. Labor arbitrage, like moving to Mexico, can only work so long, as rising wages in China show. But humans can’t compete with robots, which, as he says one of his Chinese managers put it, “never get sick, never ask for a raise, and they work 24/7.”

Labor mobility is another concern. People are less willing to move to where jobs are. UTC recently built a factory in Lansing, Mich., to make engine housings for a new type of titanium-aluminum fan blade and needs to bring on about 1,000 new people. The work pays $23 an hour on average, yet some workers in Huntington, who earned $15 on average, “won’t move two hours north to Lansing.”

Mortgages, kids in school and cultural attachments can lead to such mismatches, but Mr. Hayes worries because labor mobility used to be “just a given.” His own career took him from Rockford, Ill., to San Diego to Valparaiso, Ind., to Hartford, Conn., over the years.

Whatever the obstacles, “we have to migrate from these very low-skill manufacturing jobs to the middle-skill and the higher-skill jobs,” Mr. Hayes says. His model is the 19th-century transition to an industrial economy from a rural one, in which 97% of American workers were farmers.

The irony is that for someone cast in 2016 as a villain, and despite U.S. law instructing executives to maximize shareholder value, Mr. Hayes believes companies are also accountable to other parties, including employees, consumers and the communities where they’re based  — an obligation that extends to financial support for academic research and the arts. “You try and balance these things without saying, ‘Hey look, it’s just business, we are just going to do what’s right for us,’ ” he says. “You have to at least understand and have some empathy for the other stakeholders in this.”

Over the long run, the danger is that the Carrier ruction won’t be an isolated incident but part of a populist trend. “I think that we have to as a society face the reality that the jobs that we have today aren’t going to be here 20 years from now,” Mr. Hayes says, “and if we don’t do something fundamentally different soon, we are going to have class warfare, and that’s a scary thing.”

For business leaders, Mr. Hayes has a suggestion: “We have to defend what we think is right, what we think is the better course for the country, and I think it’s OK to speak up  — you know, you’re going to get smacked down — and will the president and I be friends?” He lets the thought trail off.

Mr. Rago is a member of The Wall Street Journal’s editorial board.

Read the original story here.


The FSSA Educational Foundation is Accepting Scholarship Applications

May 22, 2017

Now Accepting Scholarship Applications 

Annually, the Fire Suppression Systems Association Educational Foundation awards scholarships to talented and worthy young people within the fire suppression industry.

Any student or college-bound individual affiliated with the fire suppression industry is eligible to apply. Candidates must have graduated from high school or its equivalent before July 1 of the year in which they will use the scholarship. Scholarships will only be awarded to students who will be participating in the fire protection programs at their universities. Students already enrolled in one of these colleges are also eligible to apply. Previous winners are eligible for another award.

Judges consider applicants’ academic success, interest, special abilities, financial need and other factors when selecting their choice of scholarship recipients. Judges are the Board of Directors for the Fire Suppression Systems Association Educational Foundation, Inc. There are no restrictions based upon the employment status or the sex, race, creed or nationality of the candidate.

In order to be considered, the scholarship applicant must complete a Scholarship Application Form and mail it and any attachments to the FSSA Scholarship address. The Scholarship Application Form is available on the website. To learn more about the scholarship and the materials that must be submitted, click here.

Click here to view the application.

The deadline for application submission is July 1, 2017.

The FSSA Scholarship Fund is supported by contributions from the fire suppression industry and other business groups and individuals. Contributions, which are tax-deductible, can be accepted at any time and in any amount

Contributions can be made in recognition of special events or in memory of a loved one. Single contributions of $25,000 or more will be honored by an annual scholarship named after the contributor. In order to increase the number and amount of scholarships available, FSSA is seeking additional support for the foundation. If you are interested in making a contribution, submit a donation online or mail a check to FSSA Headquarters at 3601 East Joppa Road, Baltimore, MD 21234.

Hiller Acquires Advanced Safety Systems (ASSI) – Continues Buying Spree!

May 4, 2017


The Hiller Companies

The Hiller Companies is excited to announce that Advanced Safety Systems, Inc. (ASSI), headquartered near Boston, MA will be joining its team. The Hiller Companies offers fire protection and security products and services that are preserving lives and property all around the world. Hiller, headquartered in Mobile, Alabama, has branch offices from California to Boston and purchased ASSI on May 1, 2017.

Hiller prides itself on a strong foundation of experience steeped in almost 100 years in the fire protection industry coupled with the most modern service technology. By combining Hiller’s experience with the expertise of ASSI, Hiller is looking forward to adding ASSI to its footprint in the New England area.

“With over 50 years in the fire protection industry, ASSI has a proven track-record of innovation, reliability and solutions-based service,” Hiller CEO Patrick Lynch said. “We are looking forward to joining their experience and talents with Hiller’s offerings and services so that we are able to serve more customers in the New England region and beyond.”

Included in ASSI’s full array of fire protection offerings are unique fire protection solutions to protect works of art and historical iconography as well as fast-acting fire detection and suppression solutions to protect critical assets in education, healthcare, and industrial facilities as well as telecommunications and data centers. ASSI has offices in Peabody, Massachusetts and in the Hartford, Connecticut area.

“We are very excited to become a part of The Hiller Companies and to bring the experience and knowledge we have gained in this industry to such a well-respected company,” ASSI President and CEO Bill MacKay said. “We believe this will be a great fit for everyone, and we look forward to combining forces with Hiller’s global market and to expanding our quality services to new and existing customers in New England.”

For more information about Hiller, please visit our website at www.hillerfire.com.

The Hiller Companies offer fire protection products and services that are preserving lives and property all around the world. Headquartered in Mobile, Alabama, Hiller extends its reach globally as well as in domestic markets with offices in Alabama, Arizona, California, Florida, Louisiana, Massachusetts, Nevada, South Carolina, Texas, Utah and Virginia. We are proud to safeguard everything from small businesses to nuclear testing facilities, yachts to aircraft carriers, and gas stations to offshore platforms.

If you would like more information about this topic, please contact John Mackey at 251-661-1275 or email at jmackey@hillercompanies.com.

The original press release can be read here.

Exclusive Photos of FSSA 35th Annual Conference

March 24, 2017

The FSSA 35th Annual Forum took place on February 17-21, 2017 at Naples Beach Hotel and Golf Club in Naples, Florida. Here are some pictures that we thought you might enjoy from the conference.

News From Wesco

February 28, 2017


Six years ago we wrote about the decision made by Brianna Lozano, daughter of Wesco’s Karen Zukarfein, to enter the U.S. Air Force.  How time flies! We were so proud of her then and even prouder now that she has completed a six year stint with the Air Force – including two years in Turkey. Brianna is, without doubt or hesitation, the positive answer to the age old question, “What is happening to today’s youth?”

Welcome home Brianna!!
Brianna in 2010

Brianna in 2010

Brianna entered the Air Force’s Basic Military Training on December 14, 2010 and graduated basic training on February 11, 2011. She began Phase 1 of Surgical Tech training at Ft. Sam Houston, San Antonio, TX and continued with Phase 2 training at Travis AFB, California, gaining much hands-on experience in the operating room. Brianna returned to San Antonio to complete Phase 3 training, specializing in becoming an orthopedic technician. She graduated 2nd in her class and was assigned to Lackland AFB, San Antonio, TX, where she performed various Orthopedic specialty duties at Wilford Hall and Brook Army Medical Center.


Brianna in 2016

Brianna in 2016

Since March 2015 she has been assigned Incirlik Air Base, Turkey, managing the Surgical Specialty Clinic. She recently returned home and is excited to resume civilian life in FL.
Her list of accomplishments/awards include:
  • Orthopedic Specialty Course Honor Graduate
  • Airman of the quarter Jan to March 2012
  • Airman of the quarter July to September 2013
  • Surgical services airman of the year 2014 for Air Education and Training Command
  • Non Commissioned Officer of the Quarter for July to September 2016, 39th Air Base Wing (Incirlik Air Base, Turkey)
  • Non Commissioned Officer of the Year 2016, 39th Medical Group
  • United States Air Forces in Europe Surgical  Services NCO of the Year 2016
  • United States Air Force Surgical Services NCO of the Year 2016
  • Air Force Achievement Medal
  • Air Force Commendation Medal


Trump Supports Obama HFC Crackdown

February 27, 2017
Then-Secretary of State John Kerry delivers remarks about the Montreal Protocol in Kigali, Rwanda, last fall. (Photo by U.S. Department of State, courtesy of Flickr.)

Then-Secretary of State John Kerry delivers remarks about the Montreal Protocol in Kigali, Rwanda, last fall. (Photo by U.S. Department of State, courtesy of Flickr.)


By Amanda Reilly, E&E News reporter
E&E News

A window into the administration’s support of Kilgali Amendment to phase-down HFCs and whether or not EPA will continue to change the SNAP status of HFCs?

The Trump Justice Department defended an Obama administration rule for phasing out potent heat-trapping chemicals.

Two manufacturers of the chemicals, hydrofluorocarbons, have asked the U.S. Court of Appeals for the District of Columbia Circuit to kill the rule.

President Obama’s 2013 Climate Action Plan called for cutting HFC use at home and abroad. The 2015 U.S. EPA regulation at issue eliminated some uses for HFCs, which were previously accepted as alternatives to ozone-depleting substances, and approved substitutes for the chemicals.

“This isn’t a stretch of the statute,” DOJ’s Dustin Maghamfar told a three-judge panel in the D.C. Circuit.

Judge Brett Kavanaugh appeared to side with the companies at times, saying EPA’s rule would force firms that switched from ozone-depleting substances to HFCs to “spend a lot more money.”

EPA’s regulation — and a similar rule last year phasing out other uses of HFCs — was issued in the runup to the October international agreement to amend the Montreal Protocol to phase down HFCs globally.

The Trump administration has broadly pledged to undo Obama climate regulations. But while there are concerns with specific rules to eliminate HFCs, global efforts to phase down the chemicals have industry support.

Industry leaders want Congress to ratify the Montreal Protocol amendment and are worried the deal will get caught up in the politics of climate change (Greenwire, Jan. 12).

Two U.S.-headquartered companies that produce alternatives to HFCs are backing EPA in the lawsuit. The companies — DuPont spinoff Chemours Co. and Honeywell International Inc. — and the Natural Resources Defense Council intervened in the case on the agency’s behalf.

Chemours and Honeywell have “invested hundreds of millions of dollars” in replacements, said Thomas Lorenzen, a partner at Crowell & Moring and a former DOJ attorney who represents the companies. “This is significant to them, too.”

The legal question in the lawsuit is whether EPA can use the Significant New Alternatives Policy (SNAP), which is geared toward phasing out ozone-depleting substances, to replace HFCs.

EPA first issued its SNAP regulations in 1994, listing HFCs as acceptable replacements for ozone-depleting substances like chlorofluorocarbons. Since that rule took effect, HFC demand has increased dramatically, thanks in part to growing demand for refrigeration and air conditioning in developing countries.

With increased demand has come awareness of HFCs as potent greenhouse gases, leading to President Obama’s inclusion of HFC cuts in his 2013 plan to address climate change.

The EPA rule in 2015 effectively banned 38 individual HFCs or HFC blends in 25 uses in four industrial sectors: aerosols, air conditioning for new cars, retail food refrigeration and foam blowing.

In their lawsuit, Mexico-based Mexichem Fluor Inc. and France-based Arkema SA argue EPA can’t use SNAP to limit substances that themselves do not deplete ozone. The SNAP program, they argue, can only be used to replace ozone-depleting substances — not previously approved replacements for those substances.

Once industrial sectors have moved away from ozone-depleting substances, “the SNAP program no longer has any work to do,” said Dan Himmelfarb, a partner at Mayer Brown who is representing Mexichem.

“EPA has turned a limited program into a limitless one,” he told judges.

The Justice Department maintained that EPA has authority to revisit its list of replacements for ozone-depleting substances. The rule is lawful, the agency argues, because HFCs pose an overall risk to humans and the environment due to their effects on climate change.

And the Clean Air Act, DOJ’s Maghamfar told the judges, says it’s illegal for EPA to replace ozone-depleting substances with substitutes that may adversely affect human and environmental health.

“The statute requires EPA to compare alternatives to each other,” Maghamfar said.

‘I’m still stuck’

But Kavanaugh, a George W. Bush appointee, said that while the statute does seem to give EPA authority to decide that “some substitutes are OK and some are not OK,” the agency’s 2015 rule “does seem to pull the rug out” from under companies that invested in HFCs.

“I guess I’m still stuck,” he said. “Maybe I’m unique in seeing the problem that I’m seeing.”

Like Kavanaugh, Judge Robert Wilkins, an Obama appointee, questioned what promises EPA made to companies in its 1994 regulations about potential updates to the list of accepted alternatives.

But Wilkins said a petition process that Congress established “wouldn’t make sense” if lawmakers didn’t expect EPA to update the list in the future.

Maghamfar argued the agency was clear in its 1994 regulations that it may make changes to the list of accepted substitutes in the future.

“We are not promising that once you’re on the acceptable list, you get to stay there forever,” he said.

Judge Janice Rogers Brown, a Bush appointee, heard the case with Kavanaugh and Wilkins. The judges will likely issue a decision in the coming months.

Mexichem is a member of the Air-Conditioning, Heating & Refrigeration Institute, the major trade group for the heating and cooling industry. A spokesman said the group had its eye on the case.

“We are watching this case closely as it involves one of our member companies and an issue — refrigerants and the SNAP program — we care a lot about,” said Francis Dietz, the spokesman. “We did not intervene in the case but are paying close attention to how it plays out.”

The ruling will likely affect a pending lawsuit in the D.C. Circuit over EPA’s 2016 HFC rule brought by the National Environmental Development Association’s Clean Air Project.

The Natural Resources Defense Council, Chemours and Honeywell are also seeking to intervene in that case on behalf of EPA.

The original article can be found here.

Oxygen Reduction Fire Protection 101: An Introduction and Case Study

January 31, 2017

Reprinted with permission from Fire Protection Engineering QT3 2016 issue – magazine.sfpe.org

By Adam Barowy and Scott Creighton, F(PE)

For approximately 20 years, oxygen reduction fire protection systems have been developing  as a new approach to providing a primary means of fire protection for enclosed spaces. The design concept of these systems is to reduce the oxygen concentration within a space (by constant inerting with nitrogen) sufficiently to prevent ordinarily combustible materials from igniting in the presence of a typical ignition source. Oxygen reduction systems should not be confused with gaseous extinguishing systems, which discharge extinguishing agents after a fire starts in response to detection. Oxygen reduction systems provide constant control over the gaseous makeup of the enclosure while online.

As of 2014, more than 700 installations have been constructed outside of North America by just one manufacturer.[1] Common applications for oxygen reduction systems include data centers, cold storage, museum storage areas and archives, and electrical rooms. Few installations currently exist in North America. However, two notable examples are a system that protects the Betsy Ross American Flag at the Smithsonian National Museum of American History,[2] and a system in Richland, Washington that protects the largest cold storage warehouse in North America (as of September 2015).[3]

What is an Oxygen Reduction Fire Protection System?

Nitrogen producing equipment is the backbone of any oxygen reduction fire protection system. The nitrogen supply is produced onsite from ambient air. The systems employ technology originally developed in the 1980’s for the industrial gas industry in a process known as “air separation.”[4] The development of air separation equipment for use in fire protection applications began approximately 20 years ago,[1] though this is not to suggest that controlling the gaseous environment within an enclosure is a new concept. The first published research into the feasibility of mitigating fire hazards by continuous inerting an enclosed space was conducted by the U.S. Navy in the late 1960s,[5] and continued with research into the medical hazards of flame-suppressing atmospheres in 1990s.[6] Oxygen reduction systems referred to as On Board Inert Gas Generating Systems (OBIGGS) have been deployed for explosion prevention in the fuel tank ullage spaces of military aircraft for approximately 30 years.[7]

Manufacturers of oxygen reduction systems use three different air separation technologies to produce nitrogen: selectively permeable gas membranes, pressure swing adsorption (PSA), and vacuum pressure swing adsorption (VPSA). The membrane systems work much like a filter: as compressed air flows through a membrane, smaller oxygen molecules pass through the porous membrane walls. This allows oxygen and nitrogen to be collected into separate pipework. The PSA and VPSA systems work similar to each other, by passing compressed air through pressure vessels containing a carbon material that selectively adsorbs oxygen and allows nitrogen to pass through. Flow through a vessel is discontinued when the carbon material becomes saturated, and nitrogen flow is continued from another vessel. A saturated vessel “regenerates” when it is depressurized back towards atmospheric pressure. A continuous effluent of nitrogen is typically produced using two vessels.[8]

Figure 1 demonstrates the basic operation of an oxygen reduction fire protection system. Membrane, PSA or VPSA, air separation technologies are represented in the box labeled “air separation.”


The potential for ignition and fire growth within the enclosed space(s) is reduced because of two basic phenomena: 1) less oxygen is available for combustion and 2) a greater amount of thermal energy is lost during combustion due to the additional nitrogen. The oxygen concentration required to establish fire protection is primarily determined by the flammability characteristics of the materials to be stored within the enclosed space, but also depends on ambient temperature and pressure. Figure 2 shows how temperature, pressure, and the addition of nitrogen affect the gaseous composition of a fixed volume of air. The atmospheres illustrated in Figure 2 provide insight into the variables considered at the installation described in this article’s case study.

The reduced oxygen concentration referred to as the “ignition threshold” by guideline documents that restrict burning, must be empirically determined for all materials stored within the space protected by the system. The design oxygen concentration that any system maintains is principally determined by the stored material with the lowest ignition threshold oxygen concentration. By the test methods currently used in ­European oxygen reduction system guidelines, ignition thresholds for common plastics and cellulosics typically fall within 14 to 17 percent, and within 11 to 16 percent for solvents.[9, 10] When determining a design oxygen concentration, European guidelines recommend reducing the lowest ignition threshold by 1 percent (volume concentration) as a safety margin.[9] It is anticipated that the first European installation standard, due to be published in 2016, will require a safety margin of 0.75 percent with a further allotment based on the precision of the oxygen sensing equipment.[11]


Case Study: Richland, Washington

In July 2015, construction of the largest public refrigerated warehouse in North America was completed in Richland, Wash. An oxygen reduction system is the primary means of fire protection for this facility. The warehouse employs an automated storage and retrieval system (ASRS) and has three common wall freezer spaces that are each 475 ft (145 m) long by 225 ft (69 m) wide by 116 ft (35 m) tall. Each freezer encloses approximately 12,000,000 ft3 (340,000 m3) and has a capacity of approximately 115,000 pallet stalls for 9 ft (2.8 m) high pallet loads. The racking has eleven 9.5 ft (2.9 m) tier levels for a total storage height of 106 ft (32 m). Further details of the building construction are available in the January 2015 issue of Construction Today.[12]

The fire protection engineer for this project provided the stakeholders with a complete array of prescriptive and performance-based options for this complex and unusual facility. The performance objectives established for the fire protection system in this facility included:

  • Provide a system that is least likely to result in the contamination of the stored commodity.
  • Provide redundancies of equipment to assure that a single point equipment failure cannot cause loss of protection.
  • Provide a system that reduces risk to emergency responders (reduce fire frequency or severity).
  • Provide a system that does not require water or chemical (e.g., antifreeze) cleanup.

The stakeholders were most concerned with smoke contamination that can result in a complete loss of the food product. Because fire sprinkler activation is dependent on the heat generated from a fire, the stakeholders chose to pursue an oxygen reduction system using a performance-based approach.

There was an early consensus that oxygen reduction would be a reasonable substitute for fire sprinklers. The stakeholders were already familiar with the oxygen reduction system equipment used in controlled atmosphere food preservation. Oxygen reduction systems (that maintain ≤ 3 percent O2)[13] are frequently deployed in apple storage warehouses within the geographical area surrounding Richland.

The proposed design of the oxygen reduction system for this application needed to meet the safety criteria of Verband Der Schadenversicherer (VdS), a German testing, inspection and certification company, as well as the Fire Engineer of Record and the local building and fire department criteria. VdS has developed design and installation guidelines as well as a certification program for oxygen reduction systems. In addition to the details required in the guideline document VdS 3527en,[14] VdS conducted fire testing on the commodity anticipated to provide the greatest challenge to the oxygen reduction system and concluded that an oxygen concentration of 17.4 percent provided the necessary “ignition threshold.” The final design oxygen percentage of 16.1 percent was derived by applying a 1 percent safety margin recommended by VdS and a 0.3 percent safety margin recommended by the oxygen reduction system manufacturer.

In the United States, the Occupational Safety and Health Administration (OSHA) regulations require employees to wear self-contained (or supplemental) breathing apparatus to enter and work in the freezer spaces because the oxygen concentration is less than 19.5 percent.[15] Entry points are monitored with position switches and display notifications of the reduced oxygen hazard within the freezer space.

After system installation, equipment was individually tested for function and performance. With the system operational, the oxygen concentration was reduced by approximately 0.25 percent per day. Reducing the oxygen concentration to 16.1 percent required three weeks. The system control panel indicates operational status locally as well as remotely to the building control room and to the manufacturer.

These systems, as with other fire protection systems, require ongoing inspection, testing, and maintenance to ensure reliability of operation.

Advantages, Limitations and Challenges

Oxygen reduction fire protection systems have advantages and limitations. As a new fire protection approach, oxygen reduction faces several implementation challenges, particularly within the United States. Table 1 summarizes the advantages, limitations, and challenges facing oxygen reduction systems.

It is important to understand the advantages and limitations of any means of fire protection, but the growth potential for oxygen reduction system deployment within the United States lies in addressing the challenges identified in Table 1.



The greatest challenge for oxygen reduction systems is that there is currently no installation standard in the United States. Fire protection engineers pursuing oxygen reduction fire protection will need to rely on either VdS guidelines or the EN installation standard until a U.S. installation standard is developed. Development of an installation standard in the United States is not yet underway.

UL issued a product safety certification document in January 2016 for oxygen reduction systems titled as, UL 67377, Outline of Investigation for Oxygen Reduction Fire Protection System Units.[17] The UL certification document evaluates the capability of a system to develop and maintain a reduced ­oxygen atmosphere within an enclosure. The document includes requirements for fire, electrical, and mechanical safety of oxygen reduction system equipment, and uses a functional safety approach to evaluating the reliability of the system control hardware and software.

Limited data is available for the ignition thresholds of materials.[16] In practice, this is not a significant challenge, as existing installation standards for oxygen reduction systems require that material test data form the basis for determination of the design oxygen concentration. This is similar to the practice of commodity classification testing. However, Nilsson and van Hees suggest further developments to the test method currently used in Europe should be based on research into the dependency of ignition threshold oxygen concentration on material orientation and reradiation.[16] Research data is also limited to the effect of reduced oxygen concentrations on smoldering behavior and the production rates of pyrolyzates and other gasses.[16]

Internationally, occupational safety and health regulations establish required oxygen concentrations within working environments. These regulations determine whether an AHJ will permit employees to work within a reduced oxygen space. Regulations may require employees to wear supplemental breathing apparatus or to take mandatory breaks within a normoxic environment. Regulations are based upon an occupational safety regulator’s interpretation of health risks at sub-atmospheric levels of oxygen and differ internationally.

For example, Germany has established four risk classes for reduced oxygen atmospheres. Each class requires employee awareness training. As oxygen concentration decreases, each increase in risk class requires reduced exposure durations. Below 13 percent O2, supplemental breathing apparatus are required.

In the United States, OSHA maintains that an oxygen deficient atmosphere contains less than 19.5 percent O2 . In practice and for the indefinite future, installations in U.S. are likely to be limited to normally unoccupied spaces that require breathing apparatus for entry, similar to the warehouse in Richland.

Adam Barowy is with UL.

Scott Creighton is with Womer & Associates.



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