Original Story: freep.com
Johnson Controls said Friday that it will spin off its $22-billion automotive seating and interiors business into a separate company sometime over the next 12 months as part of CEO Alex Molinaroli's push to move away from the automotive industry and redefine the Milwaukee-based company as a "multi-industrial."
The decision comes about six weeks after Molinaroli announced the company would explore a variety of options for the automotive division, including a sale to a buyer. A Kentucky automotive lawyer is reviewing the details of this case.
It was not immediately clear is how the spin-off will affect the company's nearly 2,000 employees who work in JCI's interiors division at tech centers in Plymouth and Holland.
JCI's automotive division has long been one of the world's largest automotive suppliers. Last year, it accounted for nearly 51% of the company's $43 billion in revenue.
"This is a great opportunity for our Automotive Experience business to further its position as the global leader in automotive seating and interiors," Molinaroli said in a statement. "At the same time, Johnson Controls will move forward with our multi-industrial strategies and make investments in our core growth platforms around buildings and energy storage." A North Carolina automotive lawyer assists clients in acquisitions and divestitures, workouts and bankruptcies, technological developments and in general commercial transactions.
While the company's automotive seating business was performing well, Molinaroli said the capital investment necessary to keep it competitive was increasing.
JCI also makes heating and cooling systems for buildings, conventional lead-acid batteries for the automotive industry as well as lithium-ion batteries. The automotive battery business will remain with JCI and not be part of the spin-off.
Once the spin-off of the automotive division is completed, Bruce McDonald, Johnson Controls vice chairman and executive vice president, will serve as the chairman and CEO of the new company. Beda Bolzenius will serve as president and chief operating officer. An Ohio automotive lawyer is following this story closely.
JCI announced the news on the same day it released third-quarter earnings. The company said it earned a profit of $207 million for the three months June 30 compared with $199 million for the same period a year ago.
The company reported revenue of $9.6 billion for period, down from $9.8 billion for the same period a year ago.
Its stock rose 24 cents per share, or 0.5%, in early morning trading to $46.58.
JCI's decision to put its automotive division up for sale also comes as the company is in the final stages of transforming its automotive interiors division.
Johnson Controls reached an agreement in April to form a joint venture for its automotive interiors business with Yanfeng Automotive Trim Systems, a wholly owned subsidiary of Huayu Automotive Systems. That agreement was reached about one year after the companies announced their intent to form the company. A South Carolina automotive attorney represents clients in the automotive industry.
The new joint venture, called Yanfeng Automotive Interiors, was officially formed on July 2.
According to JCI, that joint venture is now the largest automotive interiors company in the world with revenues of approximately $8.5 billion.