INDUSTRY: Real Cool Prospects

Comfortably cool in his air-conditioned office, President James M. Skinner Jr., of Philadelphia's Philco Corp., leafed through his weather reports last week and broke out a sunny smile. "It hit 90° in Indianapolis, 91° in Chicago, 92° in Cleveland, 93° in Knoxville, and even higher in the Deep South," he exulted. "If only this nice hot, humid weather continues, we'll really sell air conditioners this year."

Sales of room air conditioners generally follow the thermometer. The past two summers were cool, and the industry's sales were slow, sliding along at roughly the 1956 level of $3.2 billion. This season is shaping up as the hottest in the industry's 57-year history. Carrier Corp., the industry's Goliath (total 1958 sales: $252.5 million), is selling room units 32% ahead of last year, and Fedders Corp., biggest seller of room units (fiscal 1958: $53.9 million), is running 10% ahead in shipments. In March alone, Westinghouse, which has air-conditioned everything from President Eisenhower's Gettysburg farmhouse to King Saud's Saudi Arabian harem, topped last year's shipment rate by 47%. Borg-Warner's York Division, which normally shuts its window-unit assembly lines by June 30., scheduled production well into July.

Makers predict that production of room units will rise from last year's 1,350,000 to about 1,700,000, and shipments of central air conditioners will go from last year's 224,000 to 280,000. They expect a boost from the record number of new houses going up this year (see Construction); 10% of them will be built with central air conditioning v. only 1.4% in 1952. Says the Federal Housing Administration: "Within a few years, any house that is not air-conditioned will probably be obsolescent."

Paying Its Way. The boom is fathered by increased U.S. spending, but it is mothered by smart marketing. The industry has steadily brought down prices (current range: $225 to $375 per ton for central units in new houses) while putting out more compact, smoother-operating products every year. Thanks to miniaturization, the 1959 models of Admiral, Carrier and others are 50% to 60% smaller than in 1956. General Electric claims that one of its 1959 bedroom models is virtually noiseless. Westinghouse, Fedders, Emerson are putting out install-it-your-self "portable" models. York is packaging parts needed for installation with the cooler to reduce high and widely fluctuating costs of putting it in. As optional equipment. Philco is offering an "Ionitron" (price: $50) to charge the air with negative ions, which, says Philco after a five-year hospital study, snuff out the sneezes of victims of hay fever.

This year's giants in the field are stronger than ever because they have weathered a vigorous shakeout. A few years ago there were 100 manufacturers. Scores dropped out, including Servel, Vornado, International Harvester. Each victim left behind a heavy inventory, which went at fire-sale prices. Now inventories are down to the bone, and the price wars are past.