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Johnson Controls Awards $125 Million Supply Contract

24 June 1998

Johnson Controls Awards $125 Million Supply Contract As Minority Entrepreneur Expands Into Tennessee

Leading supplier of automotive interior systems
sources seating components to new venture

    PLYMOUTH, Mich., June 24 -- Detroit entrepreneur Oliver Isaac
has expanded his manufacturing business into Tennessee -- with a $125 million
automotive parts contract in hand -- thanks to Johnson Controls'
innovative program to recruit and develop minority-owned suppliers.
    Isaac, president of American Basic Industries of Detroit, worked closely
with officials at Johnson Controls -- one of the world's leading suppliers of
automotive interior systems -- to solve some business challenges. Isaac was
seeking to expand his manufacturing business. And Johnson Controls  was aiming
to consolidate production of some key, outsourced seating components at one
location.
    The solution is Isaac's new venture in Lexington, Tennessee called
Manufacturers Industrial Group. The company's 40,000-square-foot plant in that
community launched operations last March. Under a five-year, $25 million per
year agreement, Manufacturers Industrial Group supplies various seat adjuster
components to Johnson Controls that are integrated into seats for Chrysler,
Ford, General Motors, Honda and Mercedes-Benz vehicles.
    "We had a very positive business relationship with Mr. Isaac in the
Detroit area," said Larry Alles, vice president and general manager of
purchasing worldwide at Johnson Controls. "He was encouraged to submit a
business plan to meet our product needs in Tennessee, and we liked what we
saw."
    Alles says Johnson Controls has a strong minority supplier development
initiative. The company has been recognized as an industry leader in using
minority-owned sources. In 1997, the company was named "Corporation of the
Year" -- for the second time in a row -- by the Michigan Minority Business
Development Council. This award is designed to honor outstanding performance
in assisting and doing business with minority suppliers.
    The new facility in Tennessee employs 90 people today -- and expects that
number to grow to approximately 300 employees by January 1999. It produces
seat system pivot assemblies, swivels, frame assemblies and restraint brackets
that are shipped to two Johnson Controls plants -- one in Linden, Tennessee
and one in Lexington, Tennessee.
     Isaac, principal owner and chief executive officer of Manufacturers
Industrial Group, says expanding into Tennessee was a challenge -- but was
less problematic than he anticipated.
    "I received significant support and guidance from the people at Johnson
Controls, as well as state and local officials in Tennessee," said Isaac.
"From my perspective, the only way to survive today in the automotive industry
is to go with and grow with your customers -- which is exactly the opportunity
I've had with Johnson Controls."
    The decision to source seating components to Isaac's new venture is
producing benefits all around, according to Alles. He says Johnson Controls is
providing Manufacturers Industrial Group significant assistance in project
management, quality systems development and engineering support.
    "Like virtually all of our minority sourcing efforts, this is a 'win-win'
situation," he said. "Isaac is enhancing his business and providing jobs, and
we're replacing multiple suppliers that were geographically dispersed -- with
one highly reliable source that's very close to our production facilities."
    For the past five years, recruiting and developing minority-owned
suppliers has been an integral part of Johnson Controls' business strategy. It
has implemented a formal minority supplier development program -- and provides
mentoring, scholarship and training opportunities for minority business
people. The company also has established strong relationships with many
minority suppliers, including Bing Manufacturing, Plastech, Advantage
Technologies and Grand Aire Express.
    Johnson Controls, Inc., with headquarters in Milwaukee, Wisconsin, USA, is
a global market leader in automotive systems and building controls. Founded in
1885, Johnson Controls had sales of US$11.1 billion in 1997 and operates in
more than 500 locations around the world. See http://www.johnsoncontrols.com for more
information.
    The Plymouth, Michigan-based Automotive Systems Group of Johnson Controls
is one of the world's largest suppliers of vehicle interior systems, and is a
major supplier of batteries. In 1998, the company's worldwide operations will
supply interior products for more than 22 million vehicles. The Automotive
Systems Group employs more than 45,000 people at 157 facilities worldwide and
achieved $8 billion in sales for the 1997 fiscal year.