Johnson Controls Inc. (JCI) plans to invest $138.5 million to convert its battery plant near Toledo, Ohio into an Absorbent Glass Mat (AGM) battery facility. The AGM battery facility, the first in the U.S., will help the company manufacture Start-Stop and other batteries for high efficiency vehicles.
The investment will expand the existing capacity of AGM batteries by 6 million units in North America. It will also add 50 jobs to the existing 400jobs at the plant. Construction of the plant is scheduled to begin this summer and the first line of production is expected in spring 2012.
Start-Stop system is an emerging technology that saves power/fuel in battery/gasoline powered vehicles. The Start-Stop technology helps shuts down and restarts the internal combustion engine automatically when the driver engages the clutch or releases the brake pedal to reduce the amount of time the engine spends idling, thereby improving fuel economy and reducing emissions. In gasoline-powered vehicles, it can reduce emissions by 5%–12%.
Currently, Johnson Controls is the leading supplier of Start-Stop batteries in Europe under its VARTA brand. It believes the market for Start-Stop batteries will grow to 35 million units by 2015, with U.S. being the principal market.
In 2010, the company supplied 3 million VARTA batteries in Europe. It plans to expand the annual capacity to 11.2 million batteries by 2015.
Johnson Controls Inc. is a supplier of automotive interiors, batteries, and other control equipment. In the most recent reportable quarter, the company has completed 18 major launches for Ford Motor Co. (F), Kia, Volkswagen, Tata Motors (TTM), Daimler AG (DDAIF) and Honda Motor Co. (HMC).
In the second quarter of its fiscal 2011, the Zacks #3 Rank (Hold) company reported a 31% increase in profit to $383 million (excluding non-recurring items) from $292 million (excluding non-recurring items) in the same quarter of previous year. On earnings per share, profits improved 30% to 56 cents from 43 cents in the prior year, beating the Zacks Consensus Estimate by a penny.
The improvement in earnings during the quarter was attributable to higher sales on the back of the company’s strong position in the key geographic markets. Net sales in the quarter grew 22% to $10.14 billion, which was higher than the Zacks Consensus Estimate of $9.25 billion.
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