MILWAUKEE, Sept. 3 — To better align its resources with its growth strategies while reducing the cost structure of its global operations, Johnson Controls, Inc. today announced it plans to initiate restructuring activities which will result in an estimated pre-tax charge of $450 to $500 million in its 2008 fourth quarter.
The restructuring charge relates to cost reduction initiatives in its automotive experience, building efficiency and power solutions businesses and includes workforce reductions and plant consolidations. The company expects to substantially complete the initiatives by early 2010.
The automotive-related restructuring is in response to the fundamentals of the European and North American automotive markets. The actions target reductions in the company’s cost base by decreasing excess manufacturing capacity due to lower industry production and the continued movement of vehicle production to low-cost countries, especially in Europe. The restructuring actions in Building Efficiency are primarily in Europe where the company is centralizing certain functions and rebalancing its resources to target the geographic markets with the greatest potential growth. Power Solutions actions are focused on optimizing its regional manufacturing capacity.
Johnson Controls said it expects the restructuring plan will improve its long-term growth prospects in its highly competitive global markets.
The company’s fourth quarter ends on September 30, 2008. Johnson Controls will report earnings on October 23, 2008.
The company will hold an analyst conference call to discuss the restructuring plan on Wednesday, September 3, 2008, from 8:30 to 9:00 a.m. Eastern time. A live webcast of the call, as well as a recorded archive, can be accessed at http://www.johnsoncontrols.com/.
