Today, Oct. 31, the largest automotive supplier nobody ever heard of is to start business.
That would be the $17 billion Adient, which is to launch on the New York Stock Exchange as a newly independent company and the world's No. 1 automotive seat maker.
Adient is the new name for the seating business of Johnson Controls Inc. Freed from its industrial conglomerate parent in a spinoff, Adient wants to use leaner operations and tax breaks to assert its primacy in seating for a new era of automaking.
It retains 34 percent of the global seating market. But competitors such as Faurecia, Lear Corp. and Magna International Inc. have moved aggressively for a piece of that amid the uncertainty that has hung over JCI's automotive businesses since CEO Alex Molinaroli decided to bail out of the cyclical automotive business and concentrate on JCI's building controls systems and batteries.
"We made up half the revenue and a third of the profits of that company," says Byron Foster, Adient executive vice president, speaking of automotive's share of JCI, where he has worked 19 years. As Molinaroli took over in late 2013, "he made it pretty clear he had a different vision for JCI. We've been in front of customers the whole time through that transition as to what they should expect."
Those automaker customers should expect a new company focused on seats and not forced to compete for the resources of the big industrial parent company.
Under JCI, capital investment was constrained during the previous couple of years, averaging $3 billion to $3.5 billion per year. Now the shackles are off, Foster says.
"We booked $5 billion in sales the last fiscal year. We're projecting we'll have another strong year in fiscal 2017.
"We'll be focused on growth," Foster says.