From Automotive News
Frankfurt, Germany -- Johnson Controls Inc. expects its non-battery auto parts division to be profitable this quarter, which marks the end of its fiscal year, an executive said, reaffirming guidance the supplier gave in July.
"We are very confident to post a profit in our fourth quarter," said Johannes Roters, the automotive components general manager for Europe, Africa and South America. He spoke Tuesday on the sidelines of the Frankfurt Auto Show. "In 2009-10 we will also achieve positive earnings," he said.
The auto parts business accounts for roughly 40 percent of Johnson Controls' sales. Last quarter, the division posted a $14 million loss, compared with a year-earlier profit of $199 million. That brought its nine-month net loss to $618 million.
The diversified manufacturer has a building control systems division, which has been profitable since the quarter that ended 31 Mar, and a batteries unit, which has remained profitable throughout this fiscal year. Overall, the company posted a $163-million net profit last quarter, its first profit this fiscal year.
After an expected drop in sales by 30 percent in the 2008-2009 fiscal year, which ends at the end of this month, slight signs of recovery are in sight, Roters said.
"Sales might pick up by five percent in the fiscal year of 2009-10," he said. But the company won't see production volumes return to 2007 levels until 2013 or 2014, he added.
Roters said Johnson Controls is taking advantage of the problems of suppliers that are rivals of its auto parts business, which includes seating, electronics, door panels, overhead systems and consoles.
"We have been able to acquire contracts that Lear has had before," he said.
Suburban Detroit supplier Lear Corp., which makes seating and electronic components for cars, filed for bankruptcy in July, buckling under the weight of its debt.
Johnson Controls, of Milwaukee, ranks No. 6 on the Automotive News list of top 100 global suppliers, with sales to automakers of $190 100 million in fiscal 2008.
Chrissie Thompson contributed to this report. Automotive News is a sister US publication to Urethanes Technology International.