Direct from the AHR Expo Hall – Our Exclusive Q&A with A. O. Smith CEO Stephen Shafer
Key Highlights
- A. O. Smith expresses gratitude to contractors and commits to supporting them with innovative, high-efficiency products
- The company is focused on navigating industry uncertainties through flexibility, diversified manufacturing, and strong policy engagement
- Investments in heat pump technology position A. O. Smith ahead of 2026 and 2029 regulatory changes
- The Leonard Valve acquisition enhances A. O. Smith’s water management offerings and strengthens customer relationships
LAS VEGAS, NV – The Air Conditioning, Heating and Refrigeration Expo is famous as an opportunity to get hands-on with the latest products and innovations. But equally valuable is the chance to meet and hear the latest insights from industry leaders.
Stephen Shafer is CEO of A. O. Smith, a Milwaukee-based provider of water heating and water treatment solutions, and the largest manufacturer and marketer of water heaters in North America.
Shafer came to the top job after serving as A. O. Smith’s President and Chief Operating Officer. Previously, he held a series of executive-level jobs for 3M, leading strategy, business development, marketing, and sales globally.
Shafer spoke to CONTRACTOR from the top of the A. O. Smith booth while the Expo was in progress.
CONTRACTOR: Thanks for talking to us today. What is A. O. Smith’s main message to the contractors visiting the booth today?
Shafer: In a word, gratitude. We want to express our gratitude to the contractor community for what they do for us. We have decade-long relationships with many of our contractor partners, and we want to spread the message that A. O. Smith is investing to maintain our leadership position in the industry, and they can count on us. We are committed to bringing the best products—the highest efficiency products—to market, working hand-in-hand with the contractor community.
We want to make products that are easier for them to install, to maintain and service. So, we’re out here making sure that we continue to learn from them and also spread the message that we are ready to invest in those innovations.
Another important topic is changes around shifts in technology and in the regulatory environment, and we want to be out here supporting the industry, helping to navigate those changes, and being prepared with the right products, and being able to get those products in the hands of consumers.
CONTRACTOR: What do you see as the big challenge for A. O. Smith as a manufacturer in 2026?
Shafer: A big challenge for us is uncertainty. We work on a long timeline. It takes us years to develop a new product, add the production lines to make that product, make sure we launch those products with the quality and reliability our customers expect from A. O. Smith. It takes time to do those things.
To make sure we’re working on the right things, certainly always helps. But we’re living in a less certain world now more than ever. Tariffs, geopolitics, consumer confidence and economic uncertainty, potential supply chain disruptions—those are only a few of the things you need to keep in mind as a manufacturer.
What I am certain about is that we’re remaining flexible, agile, to be able to move quickly when things change. A key strategy at A. O. Smith is, we are able to invest broadly enough that we can take advantage of favorable developments in the market. We manufacture in multiple locations to mitigate risk. We have very sophisticated supply chain teams to help manage those uncertainties.
We work closely with policy makers and regulators, advocating for the industry, and helping the industry adapt when those changes happen. It’s an uncertain world and, as a business leader, you do what you can to prepare your organization, and to support your customers, and to be ready when changes happen.
To tell the truth, I abandoned the hope for normalcy a while ago! You have to embrace change as a part of life, and a part of business. And as a business opportunity, when the opportunities come along.
We’ve already had to adjust to face serious changes during my time at A. O. Smith, and regardless of what may come we will be ready.
CONTRACTOR: So, A. O. Smith is prepared for the regulatory changes coming in October of 2026 and later in 2029?
Shafer: Absolutely. We’ve invested in heat pump technology for a number of years, and we feel we’re ahead of the curve. We’re in a position to deliver world-class heat pump products.
CONTRACTOR: One of the big news stories in the industry last year was the Leondard Valve acquisition. How is the integration going?
Shafer: We are very excited about the acquisition. It moves us into broader water management categories. It means an extension of the products already in our portfolio, and naturally we already have in common a lot of the same contractors, specifiers and system designers.
Having Leonard Valve a part of the company represents a longer-term opportunity to better serve our customers. More than that, they are a great fit culturally. It’s a great brand dedicated to quality products. A lot of the Leonard people are (like we are) passionate about serving our customers, and excited about the future.
It’s still early in the integration, but we’re all working with delivering value to our customers top-of-mind.