In a joint initiative, the European associations Eurovent and REHVA called on all relevant authorities in the EU to recognise the manufacturing, distribution, installation, maintenance and repair of HVACR equipment as essential activities and therefore exempt them from the COVID-19 shutdown orders. Notably HVACR equipment supports critical infrastructures in the healthcare, food cold chain, data centre and construction sectors. Prolonged shutdown of HVACR manufacturing activities could have serious consequences during and after the COVID-19 pandemic.
“Our request – explains Francesco Scuderi, Deputy Secretary General of Eurovent – comes at a particular moment, when future steps are being planned and the crisis from COVID begins to take on a more defined face. Every day, we acknowledge how essential certain structures are and we should not forget that the services that enable them to function and the entire supply chain upstream are equally essential. We must ensure that production, distribution and services can continue to work, or the whole system will collapse, in a domino effect”.
Eurovent and Rehva’s request should be read not only from a contingency perspective, but also from a recovery perspective: “HVACR is essential for human well-being. We cannot afford that production stops today. With the necessary safety measures, such as adequate distancing in the production lines and the adoption of PPE, production can continue. Moreover, we should prepare ourselves for requests that will grow when the COVID crisis will, hopefully soon, be over”.
As Scuderi emphasizes, the essentiality of HVACR has repercussions throughout the supply chain: “If the production of a ventilation unit is declared as essential, so should the production and distribution of all its the components. If a unit breaks down and technicians cannot obtain the components that are necessary to fix it, the declaration of essentiality is effectively nullified.”
Due to the essentiality of the supply chain, governments should adopt united and coherent approached – which has not happened, to this date. “HVACR must be unanimously recognised for what it is, an essential activity.” Also because differences in how companies are regulated at the Community level could result in altered competitiveness: “This may occur – Scuderi continues; but this is not what we want to highlight. Our appeal is not limited to a single government or to looking at economic effects only: our appeal is directed to all governments and is justified by the critical role of HVACR in modern society. Its scale is often underestimated, and this is the problem. Let’s think, for instance, to a hospital where the air treatment plant should suddenly stop. The hospital is essential, and so should the system that enables it to work!“.
How to tackle the problem
A recent analysis by McKinsey may be particularly relevant.
The study proposes 5 actions (5R) to be implemented across sectors, irrespective of the specific domain or size of the company. For a detailed illustration of these measures, refer to the McKinsey document. They can be summarised as follows:
- Solve: to implement mandatory measures to face the crisis and limit the risk; to take advantage of the tools that are made available by the State; to reorganize work within the company; to prioritize supply chain requests; to move liquidity;
- Resilience: to establish main interventions, to identify risks and possible ways of tackling them;
- Return: to develop a plan to face the back-to-normal situation, when demand will slow down and trust in the supply chain etc. will have to be rebuilt. Start considering what can be improved, especially digitization and automation in the company;
- Re-imagine: to plan a new normality, by learning from the difficulties experience during the crisis; to use what has proven successful in overcoming the difficulties; to develop new alliances and to think of new possible business models;
- Reform: to improve what can be improved
“McKinsey’s analysis is a global and cross-sectorial analysis, but there are numerous ideas that our companies could consider and analyse internally. It may be an incentive to implement some changes that may already have been identified as crucial before the crisis but have not been implemented. It may turn out that the crisis has a positive impact, i.e. it will force us to review and therefore improve certain aspects of our modus operandi.”
The day after
In its capacity of association, Eurovent is gathering data and analysis from various sources to figure out a recovery strategy to adopt and to recommend to its companies. “Most global economic analyses – such as that of Oxford Economics or Moody’s Investor Service – agree that this crisis, which affects all economies, including the G20s, will have a V shape, with a significant contraction in 2020 but will then return, in 2021, to values very close to those estimated before the crisis for the same year. This is because the cause is external rather than internal to the market, as it often happens with economic crises. We take note of these predictions and, even in the most difficult phases, try to act so that the HVACR supply chain is not interrupted”
European HVACR: a single front
Eurovent’s request was preceded by similar interventions by many other European cold associations. Except small and not so relevant differences, all associations call on governments to recognize the essential role of HVACR in today’s society and to act accordingly.