Johnson Controls’ plant closures won’t include Milwaukee; Marinette Marine lands another Naval ship contract
Johnson Controls’ plant closures won’t include Milwaukee
Johnson Controls Inc. announced Friday that its restructuring in the second quarter will result in the company closing 10 plants and eliminating an unspecified number of jobs, but the company’s Milwaukee area operations will likely be spared from the cutbacks.
The Glendale company is reacting to the recession, which has been particularly brutal to the automotive and commercial real estate sectors, which comprise the bulk of Johnson Controls’ markets.
The company declined to specify which plants will be closed. However, only 25 percent of the restructuring will have an impact on the company’s North American operations, and 80 percent of the plan will affect the firm’s automotive parts business, Glen Ponczak, the company’s director of investor relations, told BizTimes Milwaukee.
For the most part, the company’s Milwaukee area plants are dedicated to the firm’s power solutions business and automotive battery business, which will not be affected by the restructuring, Ponczak said.
Most of the company’s North American automotive operations, which manufacture parts such as seats, doors and control panels, are located in Michigan.
The company said it will incur an estimated pre-tax charge of $200 million to $215 million in the second quarter.
Johnson Controls said it expected a return to profitability in its fiscal 2009 third and fourth quarters, with its Automotive Experience business expected to achieve a break-even run-rate by the end of the fiscal year.
"While we don’t expect near-term recoveries in our markets, we believe we can manage through this environment from a position of strength and enhance our ability to gain further market share while improving our margins," said Stephen Roell, chairman and chief executive officer of the company. "Today’s announcement demonstrates our continued ability to improve our cost structure. Earlier this month, we completed a debt offering that significantly improves our liquidity and gives us the flexibility to take advantage of opportunities that may arise as a result of the economic environment. Both of these actions provide further competitive advantage. We remain confident in our long-term growth prospects."
Also last week, Johnson Controls announced it had entered into a project development agreement (PDA) with FirstRand Bank Limited, one of the largest financial institutions in South Africa.
The agreement is the first signed in South Africa under the Clinton Climate Initiative (CCI), as well as the first energy performance contract in South Africa. Under the agreement, Glendale-based Johnson Controls will perform energy efficiency audits and retrofits in three buildings – one in Johannesburg and two in Randburg initially, with the potential of adding more in the future.
Marinette Marine lands another Naval ship contract
Marinette Marine Corp. and Lockheed Martin have been awarded a U.S. Navy contract to construct the Navy’s third Littoral Combat Ship (LCS).
The ship will be built in Marinette, where the nation’s first LSC, the USS Freedom, also was built.
"The Freedom class LCS is the most affordable surface combatant in the current shipbuilding plan in the last four decades – only six years from concept to the fleet, half the time," said Dan Schultz, vice president and general manager of Lockheed Martin’s Integrated Defense Technologies business. "The Lockheed Martin team is committed to the U.S. Navy’s LCS program and we are ready to begin work on the next ship. LCS fills a critical need in the Navy’s vision for building its transformational fleet and we are pleased to continue our partnership with the Navy on this revolutionary program."
The Lockheed Martin team design for LCS is a survivable, semi-planing steel monohull that provides maneuverability with proven sea-keeping characteristics and innovative design features to support launch and recovery operations of manned and unmanned vehicles.
The value of the contract was not disclosed. Marinette Marine is a subsidiary of The Manitowoc Company Inc.
