Automotive future at JCI looking unlikely

Automotive future at JCI looking unlikely

Reliable sources close to Johnson Controls say it "looks likely there is no future" for the automotive sector within its portfolio.

The manufacturer yesterday (10 June) said it was evaluating "strategic options for the separation of its automotive business" in a bid to deliver more profitable growth.

Future orientation of the supplier will shift from one where automotive is a major component to that of a "multi-industrial."

"[CEO Alex Molinaroli] said we don't want to be perceived only as an automotive supplier, but we want to become a multi-industrial," the reliable source told just-auto.

"At the same time the company is looking into several options in terms of targets that could complement the portfolio."

JCI is declining to put any timetable on an automotive divestment programme, or to give details of what those "targets" could be, but it is becoming clear the pace of M&A activity in the supplier sector is gathering pace.

Only recently, ZF completed the purchase of TRW, while Delphi has also made noises it could undertake "a major acquisition this year."

The source noted JCI had enjoyed a successful 2014 with its automotive unit and the sector is robust, but: "It looks likely there is no future for automotive within JCI."

Johnson Controls is involved with the battery sector through its power solutions division, but the souce added this was: "Not 100% dedicated automotive business - because they serve other industries as well."