Johnson Controls, York Make It Official
With the vote, York, with estimated annual revenues of nearly $5 billion, is now part of the Johnson Controls building efficiency business, which generated sales of $5.7 billion in 2005.
Following the completion of the transaction, Johnson Controls board of directors elected former York CEO and president C. David Myers as a vice president and corporate officer of Johnson Controls. Myers was also named president of its building efficiency business.
According to Johnson Controls, the combined business will serve customers in 125 countries from over 700 locations.
"The complementary capabilities of the two businesses create an offering that will reshape our industry and deliver benefits to our customers and shareholders," said Stephen A. Roell, Johnson Controls vice chairman and executive vice president.
"Since the acquisition was announced, a team of employees from both companies have been working together to plan for the quick and effective integration of our organizations. Because of our similar cultures and values, we've been able to work productively from the very start, and we are pleased with the progress we have already made.
"As we have moved through the integration planning process, we have become increasingly confident in our ability to deliver the expected $275 million in cost and growth synergies by 2008 as we outlined in our original announcement in August."
In Control(s)Myers also said the two businesses create an offering that will "reshape our industry."
"Whether it's a single facility or global organization, customers will now have access to unmatched, end-to-end integrated products and services," said Myers.
For example, a multisite global company will now have a single source to purchase, install, and service mechanical equipment and other integrated systems and services, said Myers. The result will be the delivery of one-stop systems, faster installations, more efficient operations, and a competitive cost structure, he said.
Some systems-related priorities include the convergence of Johnson Controls MetasysÂ® building management system and York's ISN ConneXsys controls, designed to ensure uninterrupted operations.
In addition, Myers said organizations will soon benefit from factory-mounted controls from Johnson Controls on select light commercial York equipment to offer packaged rooftops with both N2 and BACnet protocols. Also, Myers said a focus will be on establishing Johnson Controls connectivity for all commercial products that will support gateway integration or protocols supported by native systems.
"In most cases, the best solution for our customers will be an integrated Johnson Controls/York offering," said Myers.
"When that's not the case, we will offer our customers flexibility and address their needs with other solutions."
According to Johnson Controls, the acquisition creates the largest global provider with more than 700 sales and service offices in the building efficiency business serving over 125 countries.
The company said the new business will have market leadership in North America and Europe, and increased strength in Asia (especially China), Central Europe, the Middle East, and Latin America. York said it will retain its global product brand under "York, a Johnson Controls Company."
Layoffs And Expo PresenceYork International is already seeing changes at its headquarters. Nearly three weeks ago, the company announced 47 layoffs of salaried employees, including a chief financial officer.
Helen Marsteller, vice president of investor relations, whose position also is being terminated, said the jobs eliminated are ones "redundant" to those at Johnson Controls' headquarters. More layoffs are expected next year, but there is not yet a definitive number of further eliminations, said Darryll L. Fortune, spokesman for Johnson Controls' Building Efficiency division.
"We don't anticipate any more until the spring," he said.
In regard to the International Air-Conditioning, Heating, Refrigerating Exposition to be held next month in Chicago, Fortune said, "We each will have a booth with signage in both booths. We're still working out which York products will be in the Johnson Controls booth."
Fortune said the acquisition should benefit both the commercial, as well as unitary, side of York. At least in the immediate future, he admitted the commercial side of York would benefit more than the unitary side.
"We now have the largest and most capable service organization in the world with a service footprint that is unmatched," said Fortune. "We will leverage those capabilities to become the local leader in every geography in which we do business.
"From a product standpoint, the integration of factory-mounted controls into the existing York product offers an opportunity for expanded controls sales and increased benefits to our customers, like faster installation, better control integration, and more efficient operation over time.
"While we will be integrating controls into select products, we will also be sensitive to the needs of our customers and will continue to design and install systems that meet their specific requirements.
"While we believe the majority of the market will see the value of integrating our controls, we recognize some customers desire the option and will ensure to provide them the option of using any controls they require."
At this time, York unitary dealers/contractors should continue business as usual, he said.
For more information on the acquisition of York International, please visit www.johnsoncontrols.com.
Publication date: 12/19/2005