DETROIT -- Johnson Controls Inc. is bringing component work in-house and experimenting with shorter factory workweeks to deal with massive worldwide vehicle production cuts in the first half of the year, said JCI Automotive President Beda Bolzenius.
Bolzenius said JCI is looking to shift component production from suppliers to its factories to use that capacity better. Components include seat structures, welded parts, stampings and others, he said.
The shift of partsmaking to JCI also protects the company from potential production interruptions that could crop up due to a strained North American supply base, Bolzenius said.
Make-or-buy decisions are being judged differently from a year ago, he said.
Bolzenius said he has never experienced the type of vehicle production cuts and consumer uncertainty wreaking havoc with business plans. North American vehicle cuts are pegged at about 25 percent to 30 percent, he said.
Bolzenius said the key is flexibility.
JCI has started cutting some workweeks in Europe to three and four days, including a 2-3-day arrangement at plants in Spain.
No North American plants have yet gone to that setup.
But JCI has cut shifts and work force to align its plant production with that of customers, Bolzenius said.
JCI cut its worldwide capital spending budget by more than one-third in 2009 to $600 million to $650 million (about 449 million to 486 million), Bolzenius confirmed. The largest cuts occurred in its automotive budget, he said.
The automotive division of JCI is one of three units. That division is among the healthiest auto suppliers in the world -- the company is one of only three North American suppliers still rated at investment grade by Standard & Poors.
But it is growing slower than JCIs energy management and facilities segments.
JCI ranks No. 7 on the Automotive News Europe list of the top 100 global suppliers with worldwide sales to automakers of $18.50 billion in its 2007 fiscal year.