MarketWatch: Johnson Controls to cut jobs, close plants

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Johnson Controls to cut jobs, close plants

By Shawn Langlois, MarketWatch


SAN FRANCISCO (MarketWatch) -- Auto-parts maker Johnson Controls, Inc. announced Wednesday plans to cut jobs, close plants and take a fourth-quarter charge as its automaker customers continue to roll out fewer cars and shift vehicle production to low-cost countries.

Johnson Controls shares dipped 2% to $30.79 following the release and are down 18% in the past year, reflecting the struggles of the broader industry roiled by record high gas prices and the persistent U.S. housing slump.

The Milwaukee-based company did not specify the number of job cuts or which plants would be closed but said the restructuring is expected to result in a fourth-quarter pre-tax charge of $450 million to $500 million and be completed by early 2010.

Standard & Poor's Equity Research analyst Efraim Levy stood by his buy rating on the stock in the wake of the announcement with a price target of $40 a share.

"Despite a challenging auto industry JCI has a record backlog in that segment, and in its building-efficiency operations," he said in a note.

Along with car batteries and other interior auto parts, Johnson Controls makes energy-efficient heating, ventilating and air-conditioning systems for commercial buildings.


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