Johnson Controls Inc. Business Report FY ended Sep. 2015

Business Highlights

Financial Overview

(in million USD)
  FY ended Sep. 30, 2015 FY ended Sep. 30, 2014 Rate of change (%) Factors
Sales 37,179 38,749 (4.1) 1)
Segment Income 3,258 2,721 19.7 -
Automotive Experience
Sales 20,079 22,032 (8.9) 2)
Segment Income 1,182 852 38.7 -
Power Solutions
Sales 6,590 6,632 (0.6)


Segment Income 1,153 1,052 9.6 -

1) Overall Sales
-The Company's sales in the FY ended September 30, 2015 decreased by 4.1% over the previous year. Higher sales in Building Efficiency business was offset by the unfavorable impact of foreign currency translation and lower sales in the Automotive Experience business.

2) Automotive Experience
-Sales for the Company's Automotive Experience segment in the FY ended September 30, 2015 decreased 8.9% year-on-year. Both the Seating and Interiors businesses experienced deceased sales.

  • The decrease in sales for the Seating business was mainly due to the unfavorable impact of currency translation. This was partially offset by higher volumes, incremental sales related to a business acquisition and net favorable pricing and commercial settlements.
  • The decrease in sales for the Interiors business was due to the deconsolidation of the majority of the Interior business in July, 2015, lower volumes related to a prior year business divestiture, the unfavorable impact of a foreign currency translation and unfavorable sales mix. These decreases were partially offset by higher volumes, net favorable pricing and commercial settlements and incremental sales related to business acquisitions.

3) Power Solutions
-The Power Solutions segment's sales for the FY ended September 30, 2015 decreased 0.6% over the previous year. The decrease in sales was caused by the unfavorable impact of foreign currency translation, which was partially offset by higher sales volumes and favorable pricing and product mix.


Spin-off of Automotive Experience business
-In July 2015, the Company announced that it plans to pursue a tax-free spin-off of its Automotive Experience business.

  • The interior components operations are suffering from tight margins and numerous competitors. Thus, the Company will make investments in its core platforms around buildings and energy storage.
  • As the seating business will require a big capital investment to continue to be a leading supplier, the Company intends to secure a source of capital.
  • Following the separation, the Automotive Experience business will be named "Adient" and will operate as an independent, publicly traded company, effective Oct. 12, 2016. The new company will be listed on the New York Stock Exchange.

Transferred its interior business to joint venture with Chinese supplier
-In July 2015, the Company announced the formal launch of Yanfeng Automotive Interiors, a joint venture between Yanfeng Automotive Trim Systems Co., Ltd, a wholly owned subsidiary of Huayu Automotive Systems Co., Ltd (HASCO) and Johnson Controls. Yanfeng Automotive Interiors is the world's largest automotive interiors parts supplier with Johnson Controls, a global multi-industrial, having a 30 percent share of the company which will be headquartered in Shanghai. The Company's interior business was transferred to the new joint venture. The new company will have revenues of USD 8.5 billion and an order backlog of USD 10 billion. The new company will have more than 90 manufacturing, development, engineering and customer service locations around the world. The product portfolio will include instrument panels and cockpit systems, door panels, floor consoles and overhead consoles. (From a press release on July 2, 2015)

Global workforce reduction
-In September 2015, the Company announced that it is planning to reduce its global salaried workforce by as many as 3,000 people, or 2.5% of total employees, through comprehensive initiatives designed to ultimately deliver up to USD 250 million in annual cost savings. These actions are in order to continually adapt to its changing business portfolio. It will occur over the next two years. (From a press release on September 18, 2015)

Chinese Business

Establishing automotive battery sales and manufacturing joint venture in China
-In September 2015, the Company announced that it has signed a memorandum of understanding (MOU) with Beijing Hainachuan Automotive Parts Co. Ltd. (BHAP), an auto parts subsidiary of Beijing Automotive Industry Group Co., Ltd. (BAIC Group), to set up automotive battery sales and manufacturing joint ventures in China. Under the MOU, Johnson Controls and BHAP will partner to offer a range of batteries to automakers and service networks under BAIC Group. These batteries can power conventional vehicles and those for Start-Stop systems (Absorbent Glass Mat and Enhanced Flooded batteries). (From a press release on September 14, 2015)

Launch production of advanced lead-acid batteries for Start-Stop vehicles
-In April 2015, the Company is expanding its manufacturing operations in China by beginning production of advanced lead-acid batteries for Start-Stop vehicles. The Company recently began making Enhanced Flooded Batteries (EFB) at its facility in Changxing, China. Johnson Controls also has plans to localize production of Absorbent Glass Mat (AGM) batteries to support demand for fuel-efficient Start-Stop technology. In addition, the Company debuted its 12V Lithium-ion battery for Advanced Start-Stop vehicles at the 16th Shanghai International Automobile Industry Exhibition. The 12V Lithium-ion battery can increase fuel economy efficiency by up to 8 percent. (From a press release on April 20, 2015)


-In February 2015, Shanghai Yanfeng Johnson Controls Seating Co., Ltd. Changsha Branch announced that Shanghai VW has produced the prototype of its new Lavida, which is equipped with seats produced by the Changsha facility. The prototype was built through production trial run that uses the same manufacturing equipment and dies as those employed for mass production. (From news releases issued by multiple sources on February 2, 2015)

-The Company is providing its advanced Absorbent Glass Mat (AGM) battery technology to help the all-new 2015 Ford F-150. This is Ford Motor Company's first truck with Auto Start-Stop. The Company also makes the seats and supplies the interior hard trim for the 2015 Ford F-150. (From a press release on January 12, 2015)

-In December 2014, the Company is supplying its Lithium-ion batteries for the Land Rover's Range Rover Hybrid. Production of the cells and complete battery systems is underway at Johnson Controls' manufacturing facility in Holland, Michigan, USA. (From a press release on December 18, 2014)


-FCA US LLC has awarded the Company two Qualitas Awards: the Diversity Supplier Development Supplier of the Year; and Technical Cost Reduction (TCR) Supplier of the Year. FCA US recognized Johnson Controls for showing excellent commitment in key areas such as quality, innovation, continuous improvement, and diversity. (From a press release on May 28, 2015)

-The Company announced that it has been honored with two awards from General Motors, the 2014 General Motors Supplier of the Year Award and the Overdrive Award. This is the fifth time Johnson Controls has been recognized by General Motors for top performance. (From a press release on March 11, 2015)

-The Company has been awarded a "Superior TNGA Promotion Award" by Toyota Motor Corporation for promoting the automaker's Toyota New Global Architecture (TNGA) which is considered a structural reform at all stages of car development. Johnson Controls developed a next-generation front seat structure, meeting Toyota's increased safety requirements and at the same time reducing weight, complexity of components and costs. Production is planned to start in the near future with North America being the first region for implementation. (From a press release on March 4, 2015)

R&D Expenditures

(in million USD)
  FY ended Sep. 30, 2015 FY ended Sep. 30, 2014 FY ended Sep. 30, 2013
Total 733 792 791

R&D Facilities

Technology Centers for Automotive Experience
-Plymouth, Michigan, USA
-Burscheid, Germany
-Kaiserslautern, Germany
-Remscheid, Germany
-Solingen, Germany
-Trencin, Slovakia
-Shanghai, China
-Changchun, China
-Chongqing, China
-Yokohama, Japan
-Ansan, Korea
-Pune, India

Battery Technology Centers for Power Solutions
-Holland, Michigan, USA
-Milwaukee, Wisconsin, USA
-Hannover, Germany
-Monterrey, Mexico
-Sorocaba, Brazil
-Shanghai, China

Technological Alliance

Collaboration with Lawrence Technological University for advanced battery systems
-The Company is partnering with Lawrence Technological University (LTU) in United States to test and develop advanced battery systems in vehicles aimed at helping automakers meet increasing fuel economy and emissions standards. Johnson Controls and LTU have established the new Johnson Controls Vehicle Engineering Systems Lab, which includes a dynamometer. (From a press release on May 7, 2015)

Product Development

Seat platform
-In September 2015, the Company announced that its product group Recaro Automotive Seating has developed the Recaro Sport Seat Platform (RSSP), which is ready for series production. The RSSP offers two different versions, the "Sport Extreme" and the "Comfort." In addition to the lightweight aspect – depending on the configuration, the carbon backrest weighs up to 40 % less than conventional backrests – the great advantage of the sport seat platform is its modularity. All versions are based on the same lightweight construction, while the exterior design can be modified to meet customer requirements. (From a press release on September 30, 2015)

Seating demonstrator vehicle SD15
-In 2015 the Company will present its seating demonstrator vehicle SD15 at the 66th Frankfurt Auto Show:

  • The SD15's front row features a power driver seat mounted to a curved track. The seat offers a control console mounted directly to the seat structure that moves conveniently with the occupant, instead of being fixed between the seats which offers wireless charging options for mobile devices.
  • Passenger seat is situated on the Company's Gemini long tracks, which enable the seat to stow against the instrument panel or slide rearward to maximize curbside cargo capacity.
  • The second row utilizes the Gemini track system as well, allowing it to transition from a four-passenger to a five-passenger configuration in one smooth movement.
  • Both the front and rear seats showcase new ink jet printing fabric technology.
  • The SD15 design allows for the packaging of a 48-volt battery under the driver's seat. (From a press release on August 6, 2015)

Lithium Titanate battery
-The Company is expanding its automotive battery offerings by introducing a Lithium Titanate battery. The Company's latest 12-volt technology, which is a collaboration with Toshiba, will power Advanced Start-Stop vehicles. An Advanced Start-Stop system has two batteries. A 12-volt Absorbent Glass Mat (AGM) or Enhanced Flooded Battery (EFB), which will start the engine and supply power to accessories such as lights, navigation systems and radios. The 12-volt Lithium Titanate battery will primarily accept and store regenerative braking energy during vehicle deceleration, enabling greater power and load management capabilities. The 12-volt battery systems will be produced starting in 2018. (From a press release on January 8, 2015)

Reducing the use of metals in vehicle seat structures with multi material systems
-The Company is reducing the use of metals in vehicle seat structures by replacing them with multi-material systems in its CAMISMA (carbon-amide-metal-based interior structure using a multi-material system approach) research project. These seats are more than 40 percent lighter than conventionally manufactured seat structures. With CAMISMA, the Company's goal was to create cost-efficient, sustainable access to carbon-fiber-based materials systems. This was achieved by an innovative industrial manufacturing process for volume production with about 200,000 units per production line, allowing for the first time the highly concentrated, efficient use of carbon fiber, while at the same time meeting all safety requirements. These seats will be available in vehicles in 2019. (From a press release on December 1, 2014)

Capital Expenditure

(in million USD)
  FY ended Sep. 30, 2015 FY ended Sep. 30, 2014 FY ended Sep. 30, 2013
-Automotive Experience 558 632 754
 ・Seating 437 420 467
 ・Interiors 121 181 235
 ・Electronics *Divested in 2014 - 31 52
Power Solutions 309 328 425

Global Investment

-The Company is adding Absorbent Glass Mat (AGM) battery production capacity. With USD 555 million in investments between 2011 and 2020, the Company is implementing plans to expand AGM production capacity in Germany, the United States and China.

  • In Europe, the Company has invested more than USD 112 million in its facility in Hannover, Germany to increase production of AGM batteries by 65 percent since 2011. Two years ago, the Company also expanded its Zwickau plant with an investment of more than USD 112 million.
  • In August 2015, the Company announced additional capacity at its U.S. plant in Toledo, Ohio, bringing the overall investment to USD 130 million since the start of AGM production at this site in 2012.
  • The Company is also planning to build a new automotive battery manufacturing facility in Shenyang, Liaoning Province, China. The USD 200 million plant will have the capacity to produce 6 million automotive batteries a year. (From a press release on September 16, 2015)

Investment in China

-The Company plans to build a new automotive battery manufacturing facility in the city of Shenyang, Liaoning Province, China. USD 200 million will be invested in the new plant, which will have capacity to produce 6 million automotive batteries a year. Construction of the new plant is expected to begin early 2016 with production starting in 2018. (From a press release on August 13, 2015)

-Shanghai Yanfeng Johnson Controls Seating Co., Ltd.'s new plant in the Shanghai Kangqiao Industrial Park began operating on February 6, 2015. The plant has a land area of 97,400 square meters. It is equipped with facilities to design, develop, engineering, test, and produce seat components. The plant expects to sell 4.5 million seat rails and 7 million reclining adjusters during 2015. (From news releases issued by multiple sources on February 16, 2015)

-The Company announced that it will establish its new China corporate headquarters in the Shanghai Hongqiao Linkong Economic Zone. The new building is expected to be completed around the end of 2016. The facility will cover 35,000 square meters and will employ approximately 1,200 people. (From news releases issued by multiple sources on January 23, 2015)

-Chongqing Yanfeng Johnson Controls Automotive Components Co., Ltd. (CQYFJC), one of Johnson Controls' automotive seating joint ventures in China, announced the launch of its new headquarters campus in Huangmaoping Industrial Park, Chongqing City, China. The new Huangmaoping headquarters campus covers 66,600 square meters. In the 53,000-square-meter main building, the company houses an administration center, technical center and production facilities for foam, trim and complete seats. With the new Huangmaoping plant put into operation, the total production capacity of CQYFJC is expected to reach 1 million car sets per year. With the launch of new headquarters campus, CQYFJC now has full service and technical capabilities, from design, benchmarking, product development, engineering, testing to manufacturing and just-in-time (JIT) delivery. (From a press release on November 10, 2014)