In June, Oregon Tool announced the appointment of a new CEO: its then-COO Elliot Zimmer. The company, which manufacturers the Woods Equipment implement and Oregon outdoor power equipment product lines, had Zimmer succeed former CEO Paul Tonnesen, who stayed on as an advisor to the company’s board.
Zimmer started as Oregon Tool’s COO in 2022 following over 20 years of experience working in a variety of leadership roles, including at climate control solutions provider Lennox International, Dr. Pepper Snapple and in the United States Army. Zimmer has specific experience working with an HVAC dealer network during his decade at Lennox International.
With almost a year at Oregon Tool under his belt, Zimmer sat down with Rural Lifestyle Dealer to discuss his future plans at the helm of the company, the state of its dealership network and how his previous experience will influence his leadership style. Oregon Tool works primarily with third-party distributors for its Oregon OPE business and goes direct to dealers in its Woods business
What are some issues your dealers are currently facing that Oregon Tool can help address?
Zimmer: It’s interest rates, volatility, inventory management — all those things are very important right now. The nice thing about Oregon Tool is we have distributor partners and retail partners where those relationships go back decades. Our ability to connect with these partners allows us to take some of those themes, be frank with each other and align on the things we need to do to move forward together.
There’s an overarching concern with the dealer landscape in general. I would say from my experience in the HVAC industry, when there’s this much volatility in the dealer base, the good dealers are going to continue to be good dealers — those who can manage their cashflow and understand these cycles.
Other dealers unfortunately have the potential to struggle if they didn’t manage their cashflow appropriately. It’s our responsibility with our distributor partners to take care of those dealers and offer solutions, not just products. My experience is when we’re able to do that correctly, the dealer base tends to gravitate toward Oregon Tool and toward our distributors, because they know we stand for solutions and ways to help them continue to grow and professionalize their businesses through these types of environments.
Dealers want to know what’s happening in the macro situation so they can make the decisions they need to make inside of their businesses to either weather a downturn or prepare themselves for an upturn. So they look to manufacturers to provide them with a little bit of that information as well as other resources. And our distributors provide a healthy amount of that information, as well. So it’s incumbent upon us to really get aligned with our distributors on that kind of information.
Beyond that, it is as simple as our dealers wanting to know they are getting brands and products that are going to stand the test of time. They don’t want to wake up one day only to find that Oregon products disappear and they don’t have support.
How are interest rates impacting your dealers’ businesses?
Zimmer: The name of the game for all businesses is inventory turns. What we’ve been advocating to our dealers over and over is get the bad inventory out, and let’s get the good inventory in. That’s the inventory that’s going to turn no matter what. It’s easier said than done. The faster our dealers can get to that place where they’ve got good inventory that’s turning, the healthier they’re going to be, and the interest rates have less of an impact on them.
We certainly get into floorplanning in a variety of different ways across our different businesses. It’s one of many solutions we are excited to talk to dealers about. In our Woods business, we have dealer boot camps. It’s about bringing dealers in and walking them through these kinds of topics and ways to really improve their businesses.
“It’s our responsibility with our distributor partners to take care of those dealers and offer solutions, not just products……”
Then longer term, the struggles with dealership succession planning and growth was a trend with HVAC dealers, and it’s always been a trend. But the demand doesn’t tend to shift that quickly, and equipment has to be purchased somehow, some way. So if a dealer base goes away, then is it retail? Is it ecommerce? Who’s picking up that business?
What I’ve always experienced is that you see these periods of contraction where dealerships are getting smaller, and there are fewer of them. Then you get these periods of expansion where people — whether they’re private equity or other family members or people who have been in and around the business — realize, “Wow, I can set up a very successful dealership.” And they jump back into the business. What that requires from us as a manufacturer is to stay close to the market and continue to offer solutions, guidance and ways to help the people who are interested to grow these dealerships — find an avenue to get those solutions they need to really build successful businesses.
What are some of your goals and forecasts for 2024?
Zimmer: We were really up coming out of COVID, and we’re now down pretty low as a reaction to the interest rates and the inventory and probably an over-ordering, if you will, by the entire channel. We know that at some point in time, it’s going to come back at least to that previous average, if not bounce around that average for a while. What we’re saying at Oregon Tool right now is, “Step one, largely complete.” We got the playbook in place, been very disciplined, and we’re executing to be able to manage through this volatility.
When we look out to 2024 and beyond, it’s about being ready to respond when the market comes back. And that comes in several different flavors. We’re not stopping with our innovation, and we’re not stopping with the messages and the preparation for the Equip Expo. We’re not going to stop meeting with our customers and providing solutions, and we’re not going to stop making operational adjustments as needed with our global footprint to be ready to handle the demand and then some when it returns.
I think we’d all love to see our market bounce back and have Oregon Tool be there and ready to help the dealer base and play a meaningful role in that. In the HVAC industry, the one thing I learned was that the investments you’re making today and the things you do today really play out over a decade.
There’s a big transition from gas to battery. That transition will play out certainly over the next 5-10 years. Oregon Tool right now is making the investments, and we’re going to continue to add to our budget to make the investments to innovate around things like battery-powered solutions. When we do all those things right, they really build momentum in that flywheel that allows us to grow our business over the next decade or so. And then in turn, that should enable all our partners to grow, as well.
What experience in working with an HVAC dealer network will you bring to the Oregon Tool network?
Zimmer: We were uniquely positioned in that we primarily went direct to dealer. I ran a business that had tens of thousands of dealers that we called on every year. We had dealer-specific programs and dealer-specific training in order to accomplish that. And then obviously a distribution footprint that we needed to invest in systematically in order to do that really well against our competitors.
When I came to Oregon Tool, we’re exactly the inverse [with our Oregon brand]. We have a strong history with a distribution network that goes around the world, and we’re going to play to those strengths. But I’ve been able to use that in a way to really connect with our distributor partners and encourage them or share some of my experiences as ways that maybe they can enhance some of their programs.
When you’ve got tens of thousands of dealers and you’re also the manufacturer, those are two different activities you need to fund and make sure you’re doing right. Otherwise, the whole thing doesn’t come together. I’m really excited to be at Oregon Tool where we’ve got the best distributors that know how to do their part really well so that we can focus on doing our part really well. That’s going to serve us well throughout this volatility, where some of our competition tries to do it all and has a pretty tough road in front of them.
How has your time in the military impacted your leadership style?
Zimmer: I think a military background really benefits any young professional. It provides a foundation for doing what you say you’re going to do, understanding there’s room for discipline, to work as a team, to set objectives and work hard to go deliver on those objectives.
Starting back at West Point, we were challenged to develop our own leadership philosophy and feel comfortable to let it evolve as we experienced other leaders all through our journey. That’s something I still carry with me today — that leadership philosophy that started way back at West Point, that over time I’ve routinely refreshed and captured good and maybe some not-so-good things. And I’ve really continued to reflect and work on myself to be the best leader I can be as I continue in my own personal journey.