JCI spin-off to bring jobs, investment to Metro Detroit
Johnson Controls completing a spin-off of its automotive seating and interiors business into a company called Adient on Monday is expected to bring jobs and investment to Metro Detroit.
Adient Executive Vice President Byron Foster, who was vice president of the operations under Johnson Controls, said the global leader in automotive seating is planning to invest an undisclosed amount in its Plymouth facilities, open a new corporate office and add about 100 jobs to its Metro Detroit workforce.
“In terms of investment near-term, we’re going to be investing in our campus here in Plymouth to accommodate the consolidation of what today is three different locations in the Plymouth area, and just kind of upgrading the facilities,” he told The Detroit News during a phone interview Thursday. “And then we’ll have a second site we’re continuing to work on.”
Foster wouldn’t reveal any investment amounts or where the new facility would be located, since the company still is in the process of choosing a site. Adient will keep its tech campus in Plymouth but could centralize operations into one or two locations instead of three.
The company employs 3,500 people in Michigan at eight facilities in Auburn Hills, Battle Creek, Detroit, Holland, Lansing, Plymouth and Warren. The new jobs will be in human resources, legal and other corporate positions that were handled by Johnson Controls.
Foster and other executives will ring the opening bell of the New York Stock Exchange on Monday to celebrate completion of the spin-off , when Adient will begin trading as an independent company under the symbol “ADNT.”
Each Johnson Controls shareholder will receive one Adient share on Monday for every 10 shares of Johnson Controls held as of Oct. 19. Based on approximately 935 million outstanding shares of Johnson Controls as of Sept. 12, about 93.5 million Adient shares will be distributed, according to the company.
Adient, like Johnson Controls, will be tax domiciled in Ireland. Foster declined to call the new facility in Metro Detroit the company’s operational headquarters, citing corporate offices also are in Milwaukee, Wis.; Burscheid, Germany; and Shanghai, China.
Johnson Controls announced the spin-off in July 2015. The company will continue to operate in higher-margin areas, such as batteries and building controls.
Johnson Controls Chairman and CEO Alex A. Molinaroli, in a letter to shareholders earlier this month, said the spin-off will better position both companies “to capitalize on significant growth opportunities and focus resources on their respective businesses and strategic priorities.”
Foster, who started at Johnson Controls in 1997, said Adient is expecting consolidated revenue of $16.8 billion to $17 billion, and adjusted net income between $850 million and $900 million for the 2017 fiscal year.
“We still believe we have a significant growth story to tell and to deliver on for a few different reasons,” he said, referring to the Sept. 15 outlook during an analyst presentation in New York. “One is our market position in parts of the world we still see significant growth, i.e. China, where we’re the market leader.”
The company operates 17 joint seating ventures in China, operating 60 manufacturing locations in 32 cities. Globally, Adient’s operations include 75,000 employees operating in 230 manufacturing/assembly plants in 32 countries.
The name Adient was developed with FutureBrand, a subsidiary of New York-based marketing solutions firm Interpublic Group. It is a name that leaves the company open to expanding outside of seating and interiors, according to Foster.
“We didn’t want it to be a name that necessarily said seating or automotive,” he said. “We wanted something that gave us a lot of flexibility in terms of where we might go in the future.”
Johnson Controls started as building controls company in 1885, with the invention of the first electric room thermostat. It heavily diversified into other segments, including batteries and automotive, in the mid-1980s.
Johnson Controls shares closed Thursday down 8 cents, or 0.2 percent to end the day at $44.01 per share.