Johnson Controls Inc. (JCI) decided to close its plant in Hudson, Wisconsin that manufactures seats for Ford Motor Co.‘s (F) Ford Ranger plant in St. Paul, Minnesota, which will be closed down on December 19, 2011.
Ford decided to close the St. Paul plant as it is discontinuing the Ranger lineup in the U.S. in order to focus on fuel-efficient versions of the F-150 pickup. The closure of the 86-year-old facility will affect 800 jobs.
The closure of Johnson’s Hudson plant would lead to the loss of 51 jobs. The layoffs will begin in December, 2011 and continue through February, 2012.
Recently, Johnson projected a 9% rise in sales to $44.2 billion in fiscal 2012 ending September 30, 2012 based on higher automotive production in North America and China. However, the company expects relatively flat production in Europe compared with fiscal 2011.
The company also projected earnings per share to surge 20% to $2.85-$3.00 for fiscal 2012. Johnson anticipates improvements in sales and margins in all of its businesses, viz. Automotive Experience, Building Efficiency and Power Solutions.
Automotive Experience sales are expected to increase by 6% driven by higher global production volumes and about $1.4 billion in new program launches, partially offset by the negative impact of a weaker Euro. Segment margins are expected to grow by 5.3%-5.5% on the back of higher volumes and full-year benefit from acquisitions to be completed in 2011.
Building Efficiency sales are expected to grow by 9%-11% based on strong backlogs, growth in Global Workplace Solutions businesses and strong growth in the emerging markets, especially China and the Middle East.
Segment margins are expected to go up by 5.6%-5.8%, driven by global volume growth and improvements in the service business, partially offset by investments in growth opportunities including sales force expansion, information technology developments and costs associated with the launch of new products.
Power Solutions sales are expected to increase by 11%-13%, driven by higher volumes across all regions resulting from market share gains and the positive impact of a new plant opened in Changxing, China.
Segment margins are anticipated to increase by 13.5%-13.9%, reflecting the benefits of vertical integration for the recycling of lead and shift in product mix shift to Absorbent Glass Mat (AGM) battery technology.
In the third quarter of its fiscal year ended June 30, 2011, the Zacks #3 Rank (Hold) company posted a modest 4% increase in profit to $383 million (excluding non-recurring items) from $367 million (excluding non-recurring items) in the same quarter of fiscal 2010. On per share basis, profits rose to 56 cents from 54 cents, beating the Zacks Consensus Estimate by 3 cents per share.
The increase in profit was attributable to a double-digit increase in sales in all the company’s business segments, which was partially offset by disruptions in automotive production resulting from the earthquake and tsunami in Japan on March 2011.