Aaron Spira – Daikin

At least 20 percent of global electricity use comes from air conditioners, but a report from the International Energy Agency predicts that AC-related energy demand will triple worldwide by 2050. The past eight years have been the hottest on record, and that trend shows no signs of reversing.

There’s another problem afoot besides climate change, according to the IEA. Few consumers are buying the most efficient AC units on the market. The more efficient units could halve CO2 emissions and reduce local air pollution, but first they need to make their way to the average consumer.

Aaron Spira | Senior Vice President, General Counsel and Corporate Secretary | Daikin

Enter Daikin, the largest HVAC manufacturer in the world. The Japan-based conglomerate, which will celebrate its 100th anniversary next year, is trying to stay on top of the situation by introducing new, more efficient products. It’s also incorporating new refrigerant chemicals designed to significantly lower total life cycle refrigerant climate impact. And it’s expanding, both through the acquisition of cutting-edge technologies and geographically, to serve a wider customer base.

“The heartbeat of the company is about technology and innovation to continually update and reform our industry,” says Aaron Spira, who is senior vice president, general counsel and corporate secretary at Daikin Comfort Technologies and Daikin Applied Americas. “Even as we are trying to lead the way in lowering the impact that our industry has on climate change, climate change is still happening, so there are regions of the U.S. that are increasingly looking to AC. It’s important that as needs grow, we’re there to serve those communities.”

One Daikin

In North America, Daikin owns five major companies, including the two in which Spira leads the legal teams. Daikin Comfort Technologies focuses on residential and light commercial HVAC use: homes, apartment buildings and hotel rooms. Daikin Applied Americas, by contrast, produces bigger commercial units for use in office buildings, hospitals, schools and even sports stadiums. The legal departments of both companies are united by the One Daikin program that their parent company began piloting last November.

Under One Daikin, Spira is streamlining the two legal teams under the shared services model, which involves standardizing the services delivered to multiple internal clients from one consolidated, lower-cost division. Daikin Comfort Technologies has a full-service legal team of 20, while Spira is still adding to Daikin Applied Americas’ team of about 10 people.

“We think that the way to expand our reach and market awareness and impact on our customers is to have these companies work together more closely,” Spira says. “So, the experiment of what we’re trying to do—and we’re sort of the first shared service to try this model—is we’re technically two departments, but with one leader and much more emphasis on how we can do things similarly.”

As Spira puts it, he and his teammates are the guinea pigs of One Daikin, which, in the future, will expand to other departments such as IT, HR and finance. The unifying pilot program also underscores Daikin’s emphasis on creating a collaborative company culture where teams work together.

“If we identify that there may be an opportunity to improve a product that may not be performing as we originally hoped, our engineering team works closely with our quality team, with our sales team and the legal team, to not only address the issue in the immediate future, but also to advance the product going forward,” Spira says.

Synergistic M&A strategy

The two legal teams Spira heads share not only a leader, a mission and resources, but also an overarching mergers and acquisitions strategy, which Spira helps shape. He looks at how acquisition targets fit into the goals and priorities of the respective companies, gauging whether there’s an opportunity to expand the impact Daikin would get from both companies acquiring a given target.

“Historically, sometimes those conversations and planning weren’t happening as regularly as they could have,” Spira says. “And one of the benefits of bringing the legal teams together is we have visibility across all of that work and we can help work with our colleagues in the strategic planning teams to make sure that we’re having those conversations and doing that planning and diligence.”

Then, when it comes time for M&A execution, Spira makes sure he’s developed consistent approaches to due diligence, structuring deals and so forth. He applies best practices across and between the two companies. And under One Daikin, he takes a single tack across both companies to post-merger integration work. The upshot of all this is increased synergy, he says.

As for the end goal, Daikin’s M&A strategy has two prongs. One is expanding Daikin’s distribution dealer network to geographic areas or types of product offerings where Daikin is underrepresented. The second is acquiring complementary technologies with applications across Daikin’s product platform.

“Our products are not ones that an individual walks into a retail store to buy,” Spira says. “They’re going to dealers and distributors, so [customers] are calling the local HVAC dealer, which may not have the Daikin name on it per se. Making sure that we’re available and accessible to customers wherever they are is important, as is some of the technology and innovation that goes into the products themselves.”

Doing it right

Spira has built a broad skillset through extensive experience in his industry, but it all started with a B.A. from Earlham College and a J.D. from Northwestern University in 2004. After law school, he joined Kirkland & Ellis as a commercial litigation and trademark associate, then took a similar position at Goldberg Kohn.

In 2007, he moved in-house at Whirlpool, starting as legal counsel, eventually becoming general counsel for North America and then rising to deputy general counsel for the global enterprise. He worked there for 13 years before joining Daikin.

“I was very excited about the chance to come to Daikin and serve as the general counsel—of what I thought was going to be one company,” Spira laughs. “And now in this expanded role of two, I’m trying to unite those teams in a new and different way. It’s an exciting challenge, and I really enjoy trying to bring people together and give my team members opportunities to reach their full potential.”

At Daikin, Spira also works with what he calls a “tremendous” network of external counsel that helps with M&A and litigation as well as leveraging new technology to update the legal operations function. Together with his in-house team, they’re helping ensure Daikin leads the industry in addressing the climate change problem, not making it worse.

“One of the things that drew me to Daikin and makes me proud to be a part of the team is, there’s an incredibly strong culture and commitment to doing the right thing and doing things the right way here,” Spira says. “Many companies provide lip service to that approach, but I’ve had the opportunity to see it put into effect on a day-to-day basis.”

View this feature in the Vanguard Summer III 2023 Edition here.