Johnson Controls Sells Their Battery Business

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https://www.jsonline.com/story/mone...attery-business-13-2-billion/1987434002/

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...Johnson Controls International plc has agreed to sell its automotive battery business to a Canadian private equity firm and institutional investors, including an entity that manages public pension plans in Quebec, for $13.2 billion....

...Johnson Controls is the world's largest manufacturer of automotive batteries, and the business accounted for $8 billion of the company's $31.4 billion in revenue in its fiscal year ended Sept 30...

...Johnson Controls said the sale would yield net proceeds of $11.4 billion after taxes and expenses related to the transaction....The sale would increase the company's ability to strengthen its balance sheet, return capital to shareholders and invest in new businesses, Oliver said in a statement...
 
Interesting news. This segment should be one of the faster growing ones in the industry.

Does JC have financial troubles?
 
Lead is becoming difficult to manage and growing in cost with a shrinking supply

Might make things rather interesting when it becomes hard to buy a standard battery
 
It's an awful business to be involved with. Nothing but hazardous materials and environmental regulations at every turn which result in numerous lawsuits. JCI has wanted to sell that division for a while and I'd guess they are happy to see it go.
 
Originally Posted by PimTac
Does JC have financial troubles?



Doubt it. CEO's make decisions that boost stock prices. Why? Because they get paid in stock and stock options, and if they make a decision that increases the stock price, they have just increased their pay, sometimes substantially. I've seen it time and time again. These short term decisions might even be bad long term for the company, but as long as they can get a short term increase in stock price, well.....

As stated above, hazardous aspect is a tough pill to swallow. They likely will invest the money in some other business venture.
 
Does not sound like a positive step for people wanting quality batteries made by JCI. Interstate and most of the Walmart MAXX.

Private equity firm will try and reduce cost. Make more money.
 
Hmm...I just bought a MAXX from Walmart (made by JC) - one of the standard "red top" models with 2-year replacement. It's my 2nd one. The first one, a "yellow top", with, I think, 3-year replacement, went into my Tacoma in 2013 and is still going. Decided to roll the dice on the cheaper one (it was about $80 vs. $100 for a yellow top) since that yellow top in the Taco has been so good.
 
Originally Posted by Donald
Does not sound like a positive step for people wanting quality batteries made by JCI. Interstate and most of the Walmart MAXX.

Private equity firm will try and reduce cost. Make more money.


This, without question.
 
They also bought from Toshiba their Westinghouse nuclear power division. It had taken a huge hit after 3/11/11.
 
Originally Posted by Donald
Does not sound like a positive step for people wanting quality batteries made by JCI. Interstate and most of the Walmart MAXX.

Private equity firm will try and reduce cost. Make more money.


Exactly.
 
Originally Posted by Donald
Does not sound like a positive step for people wanting quality batteries made by JCI. Interstate and most of the Walmart MAXX.

Private equity firm will try and reduce cost. Make more money.

Totally agree. They will take the name and use that for market share, while slowly degrading quality.
Then within a year or so when they have gotten all they can, they will sell it to the highest bidder, most likely a Chinese manufacturer.
Then they can continue to ride on the JCI name and contracts for a while longer while continuing to make money cheapening the product.

I actually just recently decided to only buy Deka batteries from now on, despite their higher cost.
This makes that decision a little easier.
 
Originally Posted by blupupher
Originally Posted by Donald
Does not sound like a positive step for people wanting quality batteries made by JCI. Interstate and most of the Walmart MAXX.

Private equity firm will try and reduce cost. Make more money.

Totally agree. They will take the name and use that for market share, while slowly degrading quality.
Then within a year or so when they have gotten all they can, they will sell it to the highest bidder, most likely a Chinese manufacturer.
Then they can continue to ride on the JCI name and contracts for a while longer while continuing to make money cheapening the product.

I actually just recently decided to only buy Deka batteries from now on, despite their higher cost.
This makes that decision a little easier.


Once sold to the Chinese quality may go up!
 
Originally Posted by blupupher
...Totally agree. They will take the name and use that for market share, while slowly degrading quality.
Then within a year or so when they have gotten all they can, they will sell it to the highest bidder, most likely a Chinese manufacturer. ..


From the article I linked to:
Quote
Johnson Controls spun off its automotive seating business, now known as Adient plc, in October 2016, shortly after the Tyco merger. Adient's businesses include Johnson Controls' former automotive interiors business, which now is part of a joint venture with Yanfeng Automotive Trim Systems.
 
Originally Posted by blupupher

I actually just recently decided to only buy Deka batteries from now on, despite their higher cost.
This makes that decision a little easier.


Agree.... Deka / East Penn batteries are worth the little extra that they cost
 
It doesn't surprise me one bit. The Everstart Maxx (Walmart), I've had in my wife's Optima, barely make it two years.
 
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