The Brand Story
Rheem: A Century That Began With Steel Drums on the Bay
In 1925, on Horton Street in Emeryville, California, two young brothers named Richard and Donald Rheem opened a small plant beside the rail lines and the San Francisco Bay. Their father had been a president of Standard Oil, and the oil fields of the West needed something simple and endless: galvanized steel drums. The first factory covered about 15,000 square feet. Nobody walking past it would have guessed that the name over the door would one day hang on air conditioners, heat pumps and water heaters in homes across North America and around the world.
Chapter 1 · 1925 to 1931
From oil drums to hot water
The Rheem brothers started out as partners with the Pacific Galvanizing Company, and a third brother, William, helped finance the venture. By 1930 Rheem Manufacturing Company had been formally organized, had bought out its partner and had taken over a Republic Steel packaging operation in nearby Richmond that already shaped sheet steel into tanks and boilers. The Emeryville plant closed in 1932, and the work consolidated in Richmond.
That move into tanks pointed the company toward the product that would define its first half-century. In 1931 Rheem bought John Wood Manufacturing and began building automatic gas storage water heaters. A company built to hold petroleum had learned to hold hot water, and it never let go of that business.
Chapter 2 · 1936 to 1954
War work and a national name
The 1930s and 1940s turned a California drum maker into a national manufacturer. Rheem opened its first overseas plant in Sydney, Australia, expanded to the East Coast with a flange division in Philadelphia and a barrel plant in Newark, New Jersey, and by 1941 had become the largest American maker of automatic water heaters.
When the Second World War came, the factories turned to defense work. The Navy honored the Richmond and Newark plants with its E Award in 1942, and Rheem ran a munitions mill in Danville, Pennsylvania, through the war years. Afterward the company went back to the home: soft water appliances, gas ranges, and in 1954 a glass lining that protected water heater tanks from the inside.
Chapter 3 · 1956 to 1970
Rheemaire and the road to Fort Smith
The postwar suburbs wanted more than hot water. In 1956 Rheem introduced Rheemaire, a central air conditioning and heating system for homes, and the company announced it with all the confidence of the era, pitching it as the biggest step forward in air conditioning in fifteen years. For a business that had spent three decades filling tanks with hot water, it was a turning point: Rheem was now in the business of the whole indoor climate.
In 1960 Rheem bought the water heater business of Ruud Manufacturing, a company founded in 1897 by Edwin Ruud, the Norwegian immigrant credited with inventing the automatic storage gas water heater. Ruud would become Rheem's sister brand in heating and cooling as well. Then, in August 1970, the first unit came off the line at a new heating and cooling plant in Fort Smith, Arkansas. Rheem formed its Air Conditioning Division there in 1973, and Fort Smith remains the headquarters of Rheem's U.S. air conditioning business, employing roughly 900 people when the company announced a $20 million expansion in 2022.
Chapter 4 · 1984 to 2007
New owners, one direction
The 1980s brought a series of ownership changes. Pace Industries acquired Rheem in 1984, and in 1988 Paloma, a family-run gas appliance maker from Nagoya, Japan, bought Pace and made Rheem a wholly owned subsidiary. Rheem still operates under Paloma today, with its own leadership and brands.
Along the way the family grew. Rheem bought Raypak in 1985, bringing in pool heaters and commercial boilers, and introduced the Richmond water heater brand. In 1997 the company says it produced the first 14 SEER heating and cooling unit. In 2007 Rheem moved its corporate headquarters to Atlanta, Georgia.
Chapter 5 · 2009 to today
A family of nearly fifty brands
The last two decades have been about breadth. Rheem launched a hybrid heat pump water heater in 2009, bought commercial refrigeration maker HTPG in 2013, Dutch boiler maker Intergas in 2019, Friedrich Air Conditioning in 2021 and stainless tank maker DEJONG in 2022. In October 2024 it acquired Nortek Global HVAC, which it rebranded as Nordyne. Rheem now counts almost 50 brands, roughly 14,000 employees and more than 500 patents, and in 2025 it marked its centennial with celebrations at plants from Fort Smith to Australia.
The Lineup
What Rheem builds today
Rheem builds nearly every way a building makes heat, cold or hot water: residential and commercial water heaters, tankless and heat pump water heaters, boilers, pool heaters through Raypak, commercial refrigeration through HTPG, and a full ducted heating and cooling line. On the residential side, Rheem organizes its split systems into the Endeavor Line, with the Select, Classic, Classic Plus and Prestige series climbing from entry-level single-stage equipment to variable-capacity, EcoNet-enabled heat pumps rated up to 20 SEER2. HVAC365 carries a broad slice of that ducted line:
- Central split systems: Rheem Select air conditioner and heat pump condensers such as the 1.5-ton 15.2 SEER2 units on R-454B refrigerant, paired with matching air handlers.
- Air conditioner split systems: matched condenser and air handler combinations, which you can also browse by rating in AC split systems by SEER2 and high efficiency systems from 15 to 16.9 SEER2.
- Heat pump systems: Select series heat pump condensers matched with multi-position air handlers, the everyday choice for mild-winter climates like South Florida. The same equipment appears under heat pump split systems.
- Air handlers: Rheem Select multi-position air handlers, including 17.5-inch and 21-inch cabinets with constant torque motors, built for R-454B.
- Packaged units: 13.4 SEER2 Endeavor Line Select packaged air conditioners, heat pumps and gas/electric units with ECM constant torque blowers, in convertible and dedicated horizontal cabinets.
- Electric heat: 5 kW and larger heat strips for air handlers and electric heat kits for packaged units, the backup heat that a heat pump leans on during a cold snap.
The Next Chapter
The R-454B changeover
As federal rules phase down R-410A, Rheem's new residential condensers, air handlers and packaged units carry R-454B, a blend with a global warming potential of 466, about one-fifth that of R-410A. It is the same refrigerant Carrier markets as Puron Advance, which means Rheem and several of its largest competitors landed on common ground. For anyone replacing an older system, the practical lesson is simple: R-454B equipment is designed as a matched set, so the condenser, coil or air handler and line set should be planned together rather than mixed with leftover R-410A components.
At a Glance
Rheem by the numbers
- Founded
- 1925, Emeryville, California
- Founders
- Richard and Donald Rheem
- Parent company
- Paloma Industries, since 1988
- Headquarters
- Atlanta, Georgia, since 2007
- HVAC plant
- Fort Smith, Arkansas, since 1970
- First central air system
- Rheemaire, 1956
- Employees
- About 14,000
- Sister brands
- Ruud, Raypak, Richmond, Friedrich, Sure Comfort
- Current refrigerant
- R-454B
Questions
Frequently asked questions about Rheem
Who owns Rheem?
Rheem has been a wholly owned subsidiary of Paloma Industries of Nagoya, Japan, since 1988. It runs as its own company, headquartered in Atlanta, Georgia.
Where are Rheem air conditioners made?
Rheem has built residential heating and cooling equipment in Fort Smith, Arkansas, since 1970, and the plant is the headquarters of its U.S. air conditioning business.
When was Rheem founded?
Brothers Richard and Donald Rheem started the company in Emeryville, California, in 1925, making galvanized steel drums. It entered water heating in 1931 and launched its first central air conditioning system, Rheemaire, in 1956.
What is the difference between Rheem and Ruud?
Ruud was founded in 1897 by Edwin Ruud and has been part of Rheem since 1960. Today both brands are built by the same company.
What refrigerant do new Rheem systems use?
New Rheem residential air conditioners, heat pumps and packaged units use R-454B, a lower global warming potential refrigerant that replaces R-410A.
What do the Rheem Select, Classic and Prestige names mean?
They are tiers within Rheem's Endeavor Line. Select is the entry series, Classic and Classic Plus add efficiency and features, and Prestige is the top series with variable-capacity, EcoNet-enabled equipment.
