Johnson Controls Inc. plans to spin off its automotive seating and interiors units, which will operate as an independent, publicly traded company.
Bruce McDonald, Johnson Controls' vice chairman and executive vice president, will become chairman and CEO of the new supplier. Beda Bolzenius, a vice president, will become president and chief operating officer.
The transaction, creating a new publicly traded company whose parts had $22 billion in sales last year, is expected to close in about 12 months, the Glendale, Wis.-based company said July 24.
Johnson Controls is the world's largest automotive seat maker, but CEO Alex Molinaroli is trying to refocus the company on its other product lines — namely batteries and energy management for buildings.
The bulk of the company's plastics operations are in the Automotive Experience division. JCI does not provide details on its molding, but in 2008, when it took over manufacturing from former bankrupt supplier Plastech Engineered Products Inc., it had an estimated $1.2 billion plastics business, most of it in injection molding.
The company first disclosed plans to “explore strategic options” for the auto businesses last month. In a June 10 interview, Molinaroli told Automotive News that he had two reasons for doing so.
The auto industry is susceptible to booms and busts, he noted.
“The cyclicality is not something that we particularly like, and it drives some of our decisions,” Molinaroli said.
The seating business, which had $17.5 billion in 2014 sales, also requires major capital investments, and Johnson Controls preferred to invest in other product lines.
The seating unit “competes well and does well,” Molinaroli said at the time. “To continue to be a leader, they will need a source of capital.”
To prepare for the spinoff, the seating operation will launch a cost-cutting campaign.