Johnson Controls (JCI, European headquarters: Burscheid / Germany; www.johnsoncontrols.com) is planning an extensive restructuring program for its automotive supply plants due to the poor market outlook for North America as well as western Europe. The company said it will take an estimated pretax charge of USD 450-500m for the measures in the Automotive Experience (moulding of automotive parts), Building Efficiency and Power Solutions (car battery) divisions in the fourth quarter of its 2008 financial year, which ends on 30 September, and also reduce the workforce. The projects are scheduled to be concluded by 2010. The expenditure on automotive operations will account for about 50% of the sum, power solutions for 30%.

To align its own business with the changing fundamentals in the global automotive sector, JCI plans to shift some western European plants to eastern Europe. The company points to "conservative estimates” that car production in North America will decline from 15.4m units in 2007 to 14m in 2008 and 12.5m by 2009. Although JCI does not expect European production to deteriorate to the same extent, it is concerned by the relocation of OEM assembly capacities eastward and intends to follow its customers.

Management has not yet named the affected sites or revealed the number of job losses. These are not likely to be announced until mid-October, when fourth quarter figures are released.