DETROIT - As head of Johnson Controls Inc.'s battery division, Michael Johnston was dealt a body blow in 1994. After a 40-year relationship, Sears, Roebuck and Co. pulled its DieHard account, a business that accounted for 5 million batteries a year, and gave it to AC Delco Systems and Exide Corp.
Johnston didn't wallow in the loss. He accelerated a plan to close factories and cut jobs to boost efficiency.
The payoff came just three years later, when Johnson Controls won back the Sears DieHard Gold business. It added the rest of the DieHard lineup last year.
Decisiveness is a key component of Johnston's new mandate as president and COO at Visteon Corp. As day-to-day leader of the newly independent $19 billion parts maker, Johnston must streamline operations and lessen Visteon's reliance on former parent Ford Motor Co.
'They need someone with a lot of operating experience who can get in there and help drive the non-Ford business,' Goldman Sachs analyst Gary Lapidus said. 'Mike, he always struck me as a salesman. I think Visteon needs that.'
Johnston, 53, with his hard-charging, no-nonsense style, just may be the leader to accomplish that, colleagues say. Johnston himself points to his experience running Johnson Controls' battery and interiors businesses, overseeing worldwide engineering and purchasing and leading that company's automotive business in North America, South America and Asia. Such qualities vaulted Johnston to the top of Visteon CEO Peter Pestillo's 300-candidate list as he sought a replacement for Craig Muhlhauser, who quit as Visteon president in April to work for Exide Corp.
Upon joining Visteon in September, Johnston began formulating his goals.
'Obviously what we want to see is the product and technology base that we have expanded in market share around the world,' Johnston said. 'We certainly have the capability to do that. We've probably got the infrastructure to do that. We have to make sure that it's a good economic model that we're bringing to our customer base.'
The bones of that plan already are in place, observers say.
'Their technology is good; their systems are good,' Raymond James analyst Greg Salchow said. 'It's just a matter of becoming more efficient and improving their operating margin.'
That margin totaled 6.1 percent in 1999 when Visteon was still part of Ford. But Visteon estimates it would have dropped to 2.9 percent if the parts maker had been independent.
Chief rival Delphi Automotive Systems worked on putting its house in order, shedding uncompetitive units, for several years before separating from parent General Motors in 1998.
But Johnston must whip Visteon into fighting shape quickly without the protective umbrella of Ford, which set up Visteon as a separate unit in 1997 and cut it loose last summer.
The world's second-largest automotive supplier poses a few more challenges than Johnston's first automotive tune-up - tinkering with a 1955 Plymouth in his father's garage as a teen-ager. Among them:
Visteon's dependence on Ford, which accounted for 88 percent of company sales in 1999.
Visteon aims to lower that to 80 percent by 2002. The tables already are turning. Through mid-September, just 70 percent of the company's new business came from Ford - $1.5 billion, vs. $650 million from other automakers and aftermarket customers.
Johnston's contacts are likely to help with that effort. He managed Johnson Controls' Ford, General Motors, Chrysler, Honda, Toyota and Nissan business worldwide.
Even so, Visteon can't take its bread-and-butter customer for granted.
'We have to treat them like any other Tier 1 would treat them,' Johnston said. 'And that's with respect and commitment and innovation and show them that we care about winning that Ford business.'
Price cut demands from automakers amid a U.S. auto market starting to show signs of a slowdown.
Ford, for instance, wants a 3.5 percent break in 2001, a Visteon spokeswoman said. That's on top of a 3.5 percent productivity price cut and a one-time 5 percent reduction in 2000.
A geographic reliance on North America, which provides 82 percent of revenues.
Visteon leaders especially are seeking to pump up business in Europe and are negotiating to buy most of Italian auto supplier Magneti Marelli.
Some market watchers, however, have indicated that stock repurchases may be a better use of Visteon's cash right now. At the end of the third quarter, Visteon had cash and securities worth $1.3 billion against debt of $2 billion, according to a filing with the Securities and Exchange Commission.
The company's $773 million glass unit, a money-losing business in need of substantial investment.
A joint venture deal with Pilkington PLC fell through in November over disagreements on price, liabilities and future employee contracts. Visteon is evaluating other options for the business.
Labor contracts with wages 20 percent to 40 percent higher than average competitors.
Visteon's spinoff deal with the UAW preserves a master contract paying $45 to $50 an hour in wages and benefits for hourly production workers in the United States through most of this decade. Union-savvy Pestillo comes into play here.
'What Pete knows how to do, presumably, is navigate the mine field of the UAW,' Lapidus said. 'Mike Johnston should bring some of the operating experiences to know what needs to get done, and Pete will help him get it done.'
It all adds up to a tall order for Johnston. Still, Neil De Koker, managing director of the Original Equipment Suppliers Association, who recently nominated Johnston to his board, gives the new Visteon president a cautious thumbs up.
Said De Koker: 'I think he has a track record of a strong proven performance, but he has a tiger by the tale. Visteon is a very hard organization ... and he's walking into some major challenges.'