Last updated on May 14th, 2019 at 08:47 am
Employees of the Johnson Controls Power Solutions got a surprise when they arrived for work Wednesday, gone was JCI branding and in its place was a new name, Clarios.
Johnson Controls International plc completed its $13.2 billion sale of the power solutions business, which makes and develops automotive batteries, to Brookfield Business Partners on Tuesday.
The new business will have around $8 billion in annual revenue and is the largest supplier of automotive batteries in the world. Joe Walicki, president of Clarios, said the company is optimistic about its prospects for growth. He pointed to the possibility of another 600 million cars on the road globally by 2030, along with trends to electrification and autonomous vehicles.
Overnight the company changed branding throughout the company’s Glendale headquarters to reflect the new name, which Walicki said is “about the idea that our path going forward is clear.”
Clarios’ headquarters are on the same corporate campus as Johnson Controls and new security measures have been added to separate the two businesses’ operations. The companies will continue to share some services, including a cafeteria, nurses’ station and gym.
Walicki, who spent 31 years at JCI and led the power solutions business prior to the sale, said the company has signed a long-term lease with Johnson Controls and there are no plans to significantly change the structure of operations in the Milwaukee area.
“If we get to a point down the road where we don’t think this makes sense, we could consider other options, but we’re optimistic,” Walicki said during a conference call with reporters.
The fact that the new company is committing to local operations is significant. When Johnson Controls spun off its automotive seating business a few years ago, company executives initially said the business would be headquartered in Milwaukee. Instead, Adient, the spinoff’s new name, opted to establish headquarters in Michigan.
Asked why an automotive battery company would not choose to locate in an area better known for the automotive industry, Walicki pointed to the company’s existing workforce in the region. Clarios has around 500 employees in the Milwaukee area.
“We have a lot of very talented lead acid (battery) experts, and they’re not easy to come by, that love living here in Milwaukee, so we’re not going to move those folks,” Walicki said.
He added that executives at Brookfield Business Partners, the company’s new owners, recognized it would not be possible to move the company’s local talent to another part of the world. Another thing that would be difficult to move is the battery research lab Clarios has at the JCI campus. Walicki described it as “very expensive, very large, (and) very unique.”
“Moving that lab just wasn’t practical,” he said.
Clarios does have 56 manufacturing and distribution centers around the world, including major operations in Detroit, Monterrey, Mexico, Hanover, Germany, and Shanghai, China. Walicki said outside of some operations in Michigan, Mexico and Milwaukee, the power solutions business was not mixed in with the remaining JCI operations.
“We were pretty standalone,” he said.
Still, sharing a corporate campus, cafeteria and workout area with your former corporate parent is not a surefire way to establish a new company brand and culture. Walicki noted that power solutions is largely segregated from the rest of JCI’s corporate operations on the campus, but acknowledged the new company’s leadership wrestled with whether or not being at the same location would be a challenge.
“We’re going to focus really hard at marketing and communicating ourselves as Clarios,” Walicki said “You’ll hear us, for a short period of time, still tie in formerly Johnson Controls Power Solutions, but we really are going to focus hard on getting people to know us under our new name.”