DETROIT -- Johnson Controls Inc. posted its first quarterly loss in 16 years, fueled in part by a 32 percent drop in sales at its automotive unit.
The supplier also said it is freezing new hiring and salaries, eliminating annual bonuses for executives and considering 4-day work week schedules.
JCI said it sees little relief coming in the short term, as it expects North American car and truck production to be down 46 percent in the second fiscal quarter ending March 31.
JCI and most North American parts suppliers, strained by tighter credit and plunging auto production, have suffered net losses as concerns mount about the health of their major customers. General Motors and Chrysler LLC are each operating with the aid of $4 billion in federal rescue loans.
An auto supplier trade group on Thursday said it would seek federal assistance under the Trouble Asset Relief Program to help the most troubled suppliers.
Despite the losses, JCI remains one of only three North American suppliers with credit still rated at investment grade by Standard & Poor's. More than 40 major U.S. suppliers have filed for bankruptcy protection over the last nine years, according to consulting firm IRN.
Earlier today, JCI said it lost $608 million on revenue of $7.3 billion in its fiscal first quarter ending Dec. 31. Revenue dropped more than 22 percent from $9.5 billion in the same period a year ago, when the company posted net income of $235 million.
JCI saw sales in its automotive supply unit drop 32 percent to $3.1 billion compared to $4.6 billion in the same period last year as car and truck production in North America dropped about 30 percent in the quarter. Production in Europe dropped as well, and JCI said in its earnings statement that it is still receiving significant production cut notifications.
Losses on currency exchange also inflated the companys automotive revenue drop, but sales were still down 25 percent excluding currency exchange, according to the statement.
JCIs automotive unit posted a $329 million net loss in the quarter including a $110 million impairment charge related to North American automotive assets, swinging from net income of $78 million last year.
Johnson Controls last loss was in the final quarter of calendar 1992, according to Bloomberg News. U.S. auto sales last year fell 18 percent to 13.2 million, the lowest total since 1992.
"The market environment and uncertainties we face are expected to continue in the second quarter," CEO Stephen Roell said in a statement.
At 11:25 a.m. EST, JCI shares were trading at $16.29, down 78 cents or 4.6 percent.
JCIs suburban Detroit-based automotive business unit makes interior components, seating systems and batteries.
JCI, headquartered in Milwaukee, Wis., also operates a major building efficiency services business. The supplier unit ranks No. 7 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $18.50 billion during its 2007 fiscal year.
Reuters contributed to this report