By Steve Gelsi
NEW YORK (Dow Jones) -- Johnson Controls will shut down 10
plants and take a second-quarter charge of up to $215 million, the
automotive supplier said Friday.
However, Milwaukee-based Johnson Controls (JCI) didn't specify
either the plants to be closed or the number of job cuts envisioned
as part of this restructuring.
The company also said it expects to realize a return to
profitability in the third and fourth quarters of fiscal 2009, with
the run rate for its unit specializing in automotive interiors
projected to break even by the end of the fiscal year ending Sept.
30.
In addition, Johnson Controls said it doesn't expect having to
resort to further restructuring activities for the foreseeable
future -- it had announced a $495 million restructuring program
during the fourth quarter of fiscal 2008 -- even while revising
lower its forecast for vehicle production.
"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.
Management pointed out that it 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." The company pegged net proceeds from the
sale of convertible senior notes and equity units earlier this
month at more than $828 million.
As revised, Johnson Controls now expects vehicle production
during its fiscal 2009 to be 8.8 million units in North America and
14.3 million units in Europe, lower than its forecast in
December.
On an annualized basis, North American production in the March
quarter stood at a 27-year low, the company said.
Shares of Johnson Controls rose 26 cents to $12.90 on Thursday
but fell about 3% ahead of Friday's opening bell.