Rapid Expansion of Johnson Controls in South America Positions Company for Leadership Role in Region
8 October 1997
Rapid Expansion of Johnson Controls in South America Positions Company for Leadership Role in Region
Top global supplier of automotive seats and interiors
gears up to meet customer needs in surging market
PLYMOUTH, Mich., Oct. 8 -- Automotive seating and interiors
supplier Johnson Controls is rapidly expanding its business in the
burgeoning South American marketplace. Here are some of the key "growth
indicators":
* Johnson Controls started calendar-year 1997 with two plants in South
America, and will be operating 11 facilities in that region by December;
* General Motors has selected Johnson Controls as its major
seating supplier in South America -- and the company will produce a
significant number of seat systems annually for vehicles including the
Chevrolet Astra, Blazer, Corsa, Omega and Vectra;
* In addition to General Motors, most of the leading automakers operating
in the region have sourced work to Johnson Controls, including Chrysler,
Ford, Honda, Toyota and Volkswagen;
* In late July, the company signed a major, joint-venture agreement with a
Venezuelan company to supply seat systems and components to four
automakers;
* By the year 2000, the supplier is likely to produce seat systems and
other interior products for nearly 1 million vehicles annually in South
America; and,
* Johnson Controls' share of the seating market in South America is
expected to grow from about 10 percent today to nearly 50 percent by the
end of the decade.
"South America's auto market is about to boom, and we are ideally
positioned to be the dominant player in seating and interiors there," said
John Barth, executive vice president for Johnson Controls. "We're rapidly
developing a strong infrastructure and solid partnerships for all of South
America, so we can deliver world-class products and services to our customers
in this strategically important market," he said.
In Johnson Controls' most recent business move in South America, the
company formed a joint-venture agreement in Venezuela with Inversora Bejaly.
The new company -- called 3-A Johnson Controls Andina -- operates five
automotive seating and interior systems plants in Venezuela that supply
products to four major automakers. The facilities include three complete seat
plants, one metal seat frame facility, and one operation that manufactures
seat foam. The business -- which represents Johnson Controls' first
manufacturing operations in Venezuela -- will provide interior products for
automakers marketing vehicles in the "Andean Pact" countries of Venezuela,
Ecuador and Colombia.
At the beginning of 1997, Johnson Controls was operating two manufacturing
plants in South America, including facilities in Escobar, Argentina and
Sao Bernardo do Campo, Brazil. The company added five more plants with the
Inversora Bejaly joint venture. In addition, Johnson Controls is launching
four more facilities this year, including seating plants in Rosario,
Argentina, Sao Jose dos Campos, Brazil, and Santo Andre, Brazil; and a seat
trim cover plant in Pouso Alegre, Brazil.
Early in 1998, Johnson Controls will launch its 12th plant in South
America, a facility in Cordoba, Argentina that will supply complete seats for
Chrysler/Jeep Cherokees and Grand Cherokees. And in the fall of 1998, the
company plans to open its 13th South American location -- as it launches
production of seat systems for Volkswagen Passat and Golf and Audi A3 models
at a new plant in Sao Jose dos Pinhais.
According to Barth, Johnson Controls will invest more than $100 million to
develop its manufacturing network in South America by the year 2000.
A number of factors are fueling South America's expanding auto market,
according to analysts at Johnson Controls. Government restrictions on foreign
investment and trade have been eased, local economies have stabilized and are
growing, and roads have been improved. In addition, even in the most
industrialized nations in South America, there is strong, pent-up demand for
modern cars and trucks.
Brazil and Argentina are likely to lead the surging South American market.
Automotive production in those countries is expected to grow by 66 percent
during the next five years. By the year 2000, Brazil and Argentina --
together producing more than 3 million vehicles -- may comprise the world's
fourth largest automotive market, outranked only by the United States, Japan
and Germany.
Johnson Controls, Inc., with headquarters in Milwaukee, Wisconsin, is a
global market leader in automotive systems and building controls. Through its
Automotive System Group, it designs and produces seating and interior systems
for automakers worldwide, and batteries for the original equipment and
replacement markets. The Controls Group serves the non-residential buildings
market with controls systems and services, and integrated facility management.
Founded in 1885, Johnson Controls operates in more than 500 locations around
the world. Johnson Controls securities are listed on the New York Stock
Exchange (NYSE) with the trading symbol "JCI."
The Plymouth, Michigan-based Automotive Systems Group of Johnson Controls
is the world's largest supplier of vehicle seating and interior systems, and
is a major supplier of batteries. In 1997, the company's worldwide operations
will supply interior products for more than 20 million vehicles. The
Automotive Systems Group employs more than 45,000 people at 157 facilities
worldwide and achieved $6.3 billion in sales for the 1996 fiscal year. During
the same period, Johnson Controls, Inc. (all divisions) recorded sales of
$9.2 billion.
Johnson Controls Expands into South American Market
Country Activity Customer(s)
Argentina Manufacturing seat systems in Ford, Toyota
Escobar for Ford Escort and
Toyota Hi-Lux pickup. (current)
Argentina Will supply Cherokee and Grand Chrysler
Cherokee seats from new plant
in Cordoba. (March 1998)
Argentina Providing Corsa seat systems, General Motors
trim covers from new facility in
Rosario. (current)
Brazil Producing seats in Sao Ford
Bernardo for Ford Fiesta, Ka,
Courier pickup. Will supply seats
for new 1998 light truck. (current)
Brazil Manufacturing seat trim covers General Motors,
at a plant in Pouso Alegre. (current) Toyota
Brazil Supplying seat systems for General Motors
Chevrolet Corsa, S10 pickup
and Blazer, and Toyota Corolla
models from Sao Jose dos
Campos plant. (current)
Brazil Plant to be launched in Santo General Motors
Andre to produce seats for
Chevrolet Corsa, Kadett,
Omega, Astra models. (November 1997)
Brazil Will supply seat systems for Audi, Volkswagen
Audi A3, Volkswagen Golf and
Passat from new facility in Sao
Jose dos Pinhais. (November 1998)
Venezuela Supplying seats and related Chrysler, Ford,
components from 5 joint-venture General Motors,
plants in Valencia and Las Honda
Tejerias. (current)
/CONTACT: Jeff Steiner of Johnson Controls, 313-454-5932/
/Company News On-Call: http://www.prnewswire.com or fax, 800-758-5804,
ext. 473547/
/Web site: http://www.johnsoncontrols.com./
(JCI GM)
SOURCE Johnson Controls