Johnson Controls' first quarterly loss in 16 years

Due to the decline in sales of auto parts business, the United States Johnson Controls recently announced its first quarterly loss for the past 16 years.

The company’s latest financial report showed that its operating income for the fourth quarter of last year was $7.3 billion, a year-on-year decrease of 22% and a loss of $608 million. Previously, the company had raised its annual operating income from the original forecast of 38 billion U.S. dollars to 39 billion U.S. dollars.

The company said that it has stopped hiring new employees and the company’s top-level bonuses have been cancelled. The company also plans to change the working hours to 4 days a week.

Company executives said that such a bad business situation will continue in the short term, and forecast that the US light vehicle production will drop by 46% in the first quarter of this year.

In the credit crunch and the sluggish auto market, US parts suppliers have also been dragged down. There have been spare parts trade organizations and associations trying to apply for financial support through the Ministry of Finance’s TARP.

The automotive business is the worst performer of the company. In the fourth quarter of last year, the company’s auto parts business sales were 3.1 billion US dollars, a decrease of 32% year-on-year. The automotive business lost $329 million in the fourth quarter of last year. Its European auto parts business is also declining. In the company’s annual report, Johnson Controls stated that it is getting a notice of substantial output reduction from the automaker.

As the exchange rate fluctuates greatly during the past year, the loss of earnings in the foreign exchange settlement process has also seriously affected the company's earnings. However, excluding foreign exchange losses, company sales still fell 25% year-on-year.

It is understood that the loss of the company last time was in 1992. Last year, the United States sold about 13.2 million vehicles a year, which is the lowest since 1992.

CEO Stephen Hoyer said in a statement, "The uncertainties of the market environment we face remain."

Headquartered in Milwaukee, the company is a manufacturer of automotive parts and building systems listed on the New York Stock Exchange and a Fortune Global 500 company. The company is also a global leader in professional automotive interiors and power solutions. Among the 100 best auto parts suppliers in the world, this company is ranked 7th. In the automotive business, it mainly produces car seats, roofs, doors, dashboards, storage systems, and electronic products.

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