Baltimore Aircoil Company, Inc.

1930–1984

Baltimore Aircoil Company, Inc., is a leading producer and exporter of evaporative cooler and heat transfer equipment. BAC supplies products for industry and institutions, including cooling towers, evaporative condensers, aircoil evaporators, and ice thermal storage systems. The company has manufacturing operations in 17 countries around the world. The company's products are sold by a network of 250 independent salespeople.

Origins

The history of the Baltimore Aircoil Company (BAC) dates back to the early days of the refrigeration and air conditioning industries. Established in 1938 by John Engalitcheff, Jr., the company at first manufactured cooling coils.

A native of Moscow, Russia, Engalitcheff had attended Johns Hopkins University on scholarship and graduated with a mechanical engineering degree in 1930. During his lifetime (he died in 1984), he obtained 47 patents on HVAC-related equipment.

According to BAC's official company history, Engalitcheff shut down BAC during World War II in order to enlist in the navy. After the war, the company added evaporative condensers and cooling towers to its product line. Cooling towers removed heat from air conditioning and refrigeration systems by circulating water.

BAC became a significant exporter due to demand for air conditioning technology abroad. An export department was created in 1966. The next year, BAC won a Presidential "E" Award for exporting excellence.

In 1956, BAC built a facility in Jessup, Maryland. Three other new plants opened in the 1960s: one in Ontario, Canada (1963), one in Madera, California (1966), and one in Belgium (1968).

It earned $8.3 million on 1984 sales of $169.7 million.

1966–1989

New Ownership in the 1970s

Merck & Company, Inc., a manufacturer of pharmaceuticals and specialty chemicals, bought BAC in 1970. Merck expanded BAC's product line and added factories in the Americas, Europe, and the Pacific Rim. The company opened a plant in Paxton, Illinois, in 1973 and one in Milford, Delaware, in 1974. BAC was led then by William E. Kahlert. Named president in 1966 and CEO in 1970, in 1976 Kahlert left to co-found Evapco. Inc.

Mid-1980s Transitions

Before his death in 1984, company founder John Engalitcheff, Jr., was honored by President Ronald Reagan for his contributions to the American Security Council's "Peace Through Strength" program.

Amsted Industries, a Chicago-based, diversified industrial manufacturer, bought BAC from Merck in May 1985. The acquisition was done partly to cushion against the cyclical nature of Amsted's railroad products business. At the time, BAC had a dozen manufacturing facilities and 1,900 employees. It earned $8.3 million on 1984 sales of $169.7 million. The Paxton, Illinois, plant was expanded by 20,000 square feet in 1989.

Cooling towers were assembled by BAC in its plants, then erected onsite by either BAC or the client. Another product became popular among institutional clients in the 1980s and 1990s. Thermal storage units, sometimes called "ice chillers," used electricity to freeze water when electricity rates were lowest, then later used water from the melting ice to air condition buildings or cool equipment. Businesses could save thousands of dollars each month by taking advantage of off-peak rates for electricity. BAC continued to work to improve the efficiency of its thermal storage systems.

Keeping Cool in the 1990s

1991–2003

Baltimore Aircoil entered the 1990s with 865 employees, though declining economic conditions led to some layoffs within a couple of years. While the thermal storage business involved some old-fashioned elements--bending steel tubes and cooling buildings with big blocks of ice--in 1997 PC Week singled out BAC as a top user of advanced computer technology.

In 1991, BAC began working with Malaysia's Linear Corporation Bhd on the installation of cooling towers in Southeast Asia. BAC and Linear formed a joint venture, BAC Cooling Towers Sdn Bhd, in 1999. The new venture focused on the industrial market for ice thermal storage. By this time, reported Malaysia's Business Times, the local cooling towers market was worth MYR 100 a year, while the industrial cooling market was worth one and a half times that. The joint venture was capitalized at $800,000 and expected to see $1.5 million in sales the first year.

A number of industries needed cooling systems, including petroleum, auto, and plastic manufacturing. According to Frost & Sullivan, the total U.S. heat exchanger market was worth $1.5 billion in 1996, when 350,000 units were sold. However, cooling towers relied on chlorofluorocarbon-based refrigerants, which were being phased out due to the Clean Air Act. American manufacturers were also coming under increasing competition for Third World business from European companies, including some backed by large industrial groups.

The ban on CFCs presented new opportunities for BAC, however. In 1995, an ambitious district thermal storage system was installed to cool ten buildings in downtown Chicago. BAC supplied 60 JCE Ice Chiller thermal storage units for the $30 million plant, which was located at the corner of State Street and Adams Street. Other cities such as Denver also turned to district cooling.

In 1999, BAC sold Fort Worth, Texas-based Ceramic Cooling Tower Co. to BDT Engineering, a Tampa, Florida, affiliate of international boiler manufacturer Deutsche Babcock. BAC had acquired Ceramic in 1991 from Fort Worth's Justin Industries. At the time of the sale, Ceramic had 165 employees at two plants.

Freer Trade Abroad after 2001

Relaxed trade restrictions were helping smaller American businesses compete. China's membership in the World Trade Organization further opened a vast new market beginning in December 2001. BAC had formed a joint venture in Daliau, in northern China, in 1998. A BAC official told the Washington Times, "We think the Chinese market will eventually be bigger than the United States." A free trade agreement between the United States and Singapore held the prospect of doubling sales in that market after 2003.

2001–2004

Amsted, struggling under a heavy debt, announced it was selling off BAC in February 2001. This decision was canceled, however, by incoming chairman and CEO W. Robert Reum.

In 2004, the company was preparing to move to a new headquarters and 25,000-square-foot research and development facility next to its old site in Jessup, Maryland. Manufacturing operations there, along with 150 jobs, were shifted to plants in Milford, Delaware, and Paxton, Illinois, where there were more blue collar workers. About 200 employees remained at headquarters after the move.

The Paxton and Milford plants were being enlarged. The Paxton plant, which employed about 2,000 people, was increased from 100,000 to 125,000 square feet.

BAC's new HVX Hybrid Wet/Dry Closed-Circuit Cooling Tower, based on the FVX line of closed-circuit cooling towers, was winning industry recognition for its energy and water efficiency. Other new products included aircoil evaporators for food processing and other applications.