Adient plc, the company formed when Johnson Controls International plc spun off its automotive seating business in 2016, announced Monday that R. Bruce McDonald is stepping down from his roles as chairman and chief executive officer, effective immediately.
Frederick Henderson, a current member of Adient’s board, will serve as interim CEO. Lead director John Barth will take over as interim chairman.
“Bruce and the board agree that now is the right time for a new leader with a fresh perspective to drive value in the next phase of Adient’s life as a public company,” Barth said in a statement.
McDonald will stay on as an advisor until Sept. 30. He will remain an employee and will receive his current base salary. His departure will be treated as a retirement and he will not receive any cash severance or severance benefits. He will receive $250,000 for relocation expenses.
Adient’s revenue is up 7 percent in the first half of the current fiscal year, but the company has incurred $315 million in restructuring costs and has reported a $384 million net loss, compared to a profit of $332 million last year.
Gross profit margins have also declined, from 9.6 percent in fiscal 2016 to 8.7 percent in fiscal 2017, and 6.1 percent in the first half of this year.
Henderson noted the company still has a strong market position and its joint ventures in China are performing at high levels, but its seat structures and mechanisms and seating segments “are not executing at the levels we are capable of.
“My immediate focus is on better operational execution to drive meaningful improvements in profitability and free cash flow. We know what needs to be done and we will be approaching the work ahead of us with urgency,” Henderson said.
McDonald’s departure is another step away from the company’s Milwaukee connections. A longtime Johnson Controls executive, he became CEO of Adient when the company was spun off from Johnson Controls in 2016.
When the spinoff was first announced, then-JCI chief executive Alex Molinaroli suggested the new company would be headquartered in Milwaukee. Adient, however, ended up establishing its headquarters in Detroit.
The company did establish a corporate presence in the 833 East Building, planning to have about 100 employees in Milwaukee and serving as a base for McDonald.
Mary Kay Dodero, director of Americas, Europe and Africa communication for Adient, said in an email Monday that McDonald relocated to Michigan a year ago and has been working from the company’s Plymouth office full-time.
When asked if the leadership transition would impact the office, Dodero said the company has about 85 employees in Milwaukee.
“At this time, Adient’s leadership is focused on better execution,” she said. “All facets of the business will ultimately be under review to ensure the company is creating value for all of its stakeholders.”
