Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Videos
    • Podcasts
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • CFO of the Year
    • Notable Leaders in Sustainability
    • Processor of the Year
    • Best Places to Work
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics Caps + Closures: A Global Online Event
    • Women Breaking the Mold Networking Forum
    • Bioplastics Live
    • Numbers that Matter Live
    • PFAS Live
    • Plastics in Politics Live
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Resin Prices Overview
    • Commodity Thermoplastics
    • High Temperature Thermoplastics
    • Engineering Thermoplastics
    • Recycled Plastics
    • Thermosets
    • Europe - Virgin
    • Europe - Recycled
    • Europe - Feedstock
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
January 07, 2013 01:00 AM

Johnson Controls Inc. adding 10 auto seating sites in China

Rhoda Miel
Managing Editor
  • Tweet
  • Share
  • Share
  • Email
  • More

    Johnson Controls Inc. will invest in another 10 auto seating plants in China as part of a long-term business strategy that continues to expect growth in China and slow expansion in the North American market to offset an expected slowdown in Europe.

    JCI also will expand its footprint for interiors and electronics in the southern U.S. and Mexico, although the company did not provide any specifics on those plans.

    Speaking during a meeting with investors Dec. 19, JCI CEO Steve Roell said he and the company remain “bullish” on China.

    “We think it will continue to prosper, though not as fast as it has been,” he said.

    The Glendale, Wis.-based company does $5 billion in business in China now with 56 plants between its wholly owned operations and joint ventures. Roell said it believes it supplies 45 percent of the seats in China.

    Although the Chinese auto industry has slowed significantly, he said it still has the largest growth potential globally and JCI has plans to build another 10 facilities during the next five years. He did not discuss any details for those new sites.

    That means that essentially JCI will be launching a new seating plant every 18 months in China, said Beda Bolzenius, president of the seating business unit.

    “Ninety-nine percent of what we do in China stays in China or in Southeast Asia,” Roell said. “We did not go to China for labor arbitrage, we went to participate in the local market.”

    Analysts with Baird Equity Research said in a written report on JCI's outlook that it sees Johnson Controls “outpacing the market due to meaningful China exposure.”

    JCI also has invested in additional capacity to produce individual components for seating, including more capability for metal parts. Roell said that reflects changes in the auto industry: Automakers sometimes are opting to award contracts for individual parts, rather than the complete seat.

    “They're directing the trim, the foam, the metal,” he said.

    The company also developed a leadership team that could work with automakers to sell and source those individual parts in addition to complete programs.

    “Now we can compete with foam, with cut-and-sew, with metals,” Roell said.

    That ability to produce both complete seats and individual components will also expand into China, Bolzenius said. JCI has only 2-3 percent of the seating-parts business in China now, compared with its commanding presence in delivering complete seats. A new focus on components as well as complete seats should bring that parts business up to 20 percent market share.

    In 2012, JCI developed a separate business unit for its electronics and auto interiors group — separating it from seating — to reflect the different dynamics of those two groups. Bill Jackson is president of electronics and interiors while Bolzenius, formerly president of the Automotive Experience unit, retains the seating group.

    The change comes because interiors and electronics are more capital-intensive than seating, and interiors are more likely to see an overhaul during a midcycle upgrade to an existing vehicle line than is seating, Roell said.

    JCI has an automotive backlog of $3.7 billion in business for 2013-15, which is about even with its previous backlog for the 2012 to 2014 time period. For 2013, it expects its seating business to gain 2 percent over 2012, reflecting growth in North America and China.

    Europe stands as a “major headwind” in JCI's forecast, however.

    “We could talk about Europe all day, but I think all of you know about Europe,” he said. “We look at Europe and believe it's going to take some time. In our case, when we look at the duration [of the downturn] we decided there was nothing we could point at that would see it come back in 2013 or 2014.”

    Roell said the company expects European production could decrease by up to double-digit percentages in 2013. That will not only impact JCI's production, it will probably bring unexpected disruptions throughout the supply base as small suppliers shut down, leading to parts issues for others.

    “Our thorn is Europe,” Jackson said.

    European automakers are already discussing plans to shut down production, including General Motors Co.'s announcement earlier in December to halt production at its Bochum, Germany, Opel plant.

    JCI will have to adjust its just-in-time operations in Europe to reflect those changes, Bolzenius said, but will be careful where it makes its overall cuts.

    “We need to be smart and selective about how [we cut] to avoid significant disruptions,” he said. “We will be a lot more careful on how to cut into operations and how to cut into our critical resources. We will not go for launch teams, for engineering capacities. We will protect these critical resources better than we did during the downturn in 2008 and 2009.”

    The interiors and electronics group made money everywhere but Europe in 2012, Jackson noted. Its biggest problem areas for production are also there. At one facility, he said, the plant was seeing an 18 percent scrap rate on one instrument panel program. It has since brought that rate down to about 6 percent, but it is still working with its customer to develop other improvements if possible.

    Johnson Controls also is in the process of restructuring where needed in North America to improve capacity.

    It is closing two plants, including the previously announced shuttering of one of its two Louisville, Ky., injection molding plants.

    RECOMMENDED FOR YOU
    Adhesive tape maker completes $40M Michigan expansion
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    GF investing $30M in Oklahoma to add growing space for plastics unit
    2
    What's next after ‘disappointing' plastics treaty talks?
    3
    Resin makers, brand owners differ on plastics treaty priorities
    4
    PET bottle resin prices take a tumble
    5
    Resin Prices
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Find more newsletters at plasticsnews.com/newsletters.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • CFO of the Year
        • Notable Leaders in Sustainability
        • Processor of the Year
        • Best Places to Work
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Videos
      • Podcasts
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics Caps + Closures: A Global Online Event
        • Women Breaking the Mold Networking Forum
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
      • Editorial Livestreams
        • Bioplastics Live
        • Numbers that Matter Live
        • PFAS Live
        • Plastics in Politics Live
        • PN Live: Mergers and Acquisitions
        • Polymer Points Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Resin Prices Overview
      • Commodity Thermoplastics
      • High Temperature Thermoplastics
      • Engineering Thermoplastics
      • Recycled Plastics
      • Thermosets
      • Europe - Virgin
      • Europe - Recycled
      • Europe - Feedstock
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified