Johnson Controls has formed a joint venture to acquire the interior product assets of Plastech Engineered Products of Dearborn, Michigan, which filed for bankruptcy in February 2008.
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Johnson Controls owns 70% of the joint venture and some Plastech creditors hold the minority position.
Johnson said it contributed US$135m in cash and five injection moulding plants to the joint venture while the lenders contributed their rights to receive Plastech’s interiors assets in exchange for Plastech debt.
Johnson Controls said the transaction is expected to negatively impact its 2008 fourth-quarter earnings by approximately $0.03 per share. The joint venture is expected to break even in 2009 and contribute to earnings by fiscal 2010.
The joint venture includes 29 plants in North America. Products include injection moulded components and assemblies such as door panels and floor consoles.
Johnson Controls itself is the largest customer of the joint venture. Annual sales are expected to total $1.2bn, of which $500-600m will be incremental to its parent company.
Johnson said it had negotiated multi-year production contracts with the joint venture’s key automotive customers.
“[The JV] creates a strong and reliable supplier for our customers who have been very supportive of our plans,” said Jeff Williams, group vice president and general manager, North America for Johnson’s automotive business.
