This year, Johnson Controls begins a yearlong commemoration of its 125th anniversary. But the Milwaukee company probably won’t be celebrating one recent, bittersweet milestone: In 2009 its venerable Building Efficiency division, the original thermostat business, again became Johnson’s top revenue generator, supplanting the once-dynamic but lately beleaguered Automotive Experience unit, which sells everything from auto electronics to whole car seats.
Founded in 1885 by Wisconsin Natural Sciences professor Warren Johnson, who invented the thermostat, the company diversified into auto supplies in 1978, and by 1993 sales from that burgeoning business had eclipsed those from home and office controls. But with the decline of the U.S. auto industry, Automotive Experience’s revenue has dropped by one third since 2008.
Nonetheless, Johnson’s CEO and chairman, Stephen Roell, sees the company’s increased dependence on the Building Efficiency division as more of an opportunity than a liability. “It’s a business that thrives on energy efficiency,” Roell explains. “We expect Building Efficiency to be a larger portion of the pie as time evolves.”
At the same time, he is looking to foreign markets to grow the auto business. Johnson operates in 750 locations abroad and is already a market leader in China. The company’s smaller third prong — Power Solutions — manufactures 36 percent of all global lead-acid vehicle batteries and recently won contracts from BMW, Daimler and Ford Motor Co. to produce lithium-ion batteries for hybrid vehicles. ....