DETROIT -- Johnson Controls Inc. plans to bring in-house many parts now contracted to other auto suppliers.
The giant maker of automotive seats, interiors and batteries wants to improve quality and make better use of factory capacity, said Paul Lambert, group vice president of North American seating.
Johnson Controls is reversing direction from five years ago, Lambert said. The company, like other interiors makers, pushed out lower-tech component production to concentrate on designing and integrating full vehicle interiors from seats and instrument panels to door panels and headliners.
That outsourcing has resulted in occasional product-launch problems when issues arose with the melding of Johnson Controls-designed parts and those of outside suppliers, he said.
In addition, General Motors and Ford Motor Co. have taken much more of their interior design in-house. That has prompted Johnson Controls to refocus on developing and producing as many parts of the interior as possible, Lambert said. Many metal fabrications, including recliners and seat tracks, are among the components being brought in-house.
Lear Corp., a competitor, is divesting its interior trim business by putting it into a joint venture with New York investor Wilbur Ross.
"We've come to recognize that the performance of a complete seat system is dependent on the sum of all the parts working in concert," Lambert said during an interview this month at the Detroit auto show.
The company never completely exited those operations, so it is planning to bring plants out of mothballs to renew production. For example, plants in Holland and Battle Creek, Mich., are scheduled to return to full production to make seat tracks and frames, respectively. The company wants its plants to run at least at 85 percent of capacity, with a long-term goal of 95 percent, Lambert said.
He declined to say how much sales volume is being brought back in-house. But the company intends to keep some production of all parts with top-performing suppliers to ensure that Johnson Controls continues to tap new technology and understand the cost of components, he said.
Johnson Controls, of Milwaukee, ranks No. 5 on the Automotive News list of the top 100 global suppliers with worldwide original-equipment automotive parts sales of $19.50 billion in 2004.
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