Auto interiors and battery maker Johnson Controls Inc
Johnson Controls, the third-biggest auto parts supplier in North America, said it had completed two-thirds of its restructuring announced at the end of 2008, which included shutting 21 plants and reducing 9,300 jobs, or 7 percent of its global workforce.
But the company is stepping up cost cuts in response to a deepening economic downturn. U.S. auto sales plunged about 40 percent in the first two months of 2009 to nearly 30-year lows.
The Milwaukee-based company forecast vehicle production this year at 8.8 million units in North America and 14.3 million in Europe. In January it forecast making 9.2 million vehicles in the U.S. in 2009.
Johnson Controls declined to comment how many jobs it planned to cut in addition to the 9,300 positions, or where most of the reductions would take place.
U.S. auto parts suppliers have come under intense pressure from the near-total shutdown in auto production at the end of last year and early weeks of 2009.
Johnson Controls supplies parts for almost every major automaker, including General Motors Corp
The U.S. Treasury pledged up to $5 billion in aid last week to provide immediate liquidity to ailing suppliers.
While we don't expect near-term recoveries in our markets, we believe we can manage through this environment from a position of strength, Chief Executive Stephen Roell said in a statement.
Johnson Controls said it would take a pretax charge of up to $215 million in its fiscal second quarter ending March 31 due to the latest restructuring plan, partially offset by about $75 million in one-time tax benefits.
The company expects to report an overall loss in the fiscal second quarter similar in scale to the first quarter's operating loss. Excluding one-time items, Johnson Controls reported an $82 million loss in the fiscal first quarter, or 14 cents per share.
Johnson Controls said it still expected to return to profitability in its third and fourth quarters.
The bulk of Johnson Controls' charges are in the segment that makes seats, doors and control panels for vehicle interiors.
This segment accounted for 48 percent of the company's sales in 2008, but 28 percent of its earnings. About half its sales come from Europe, with North America accounting for about a third and Asia the rest.
The company said the cost-cutting program announced at the end of last year is ahead of schedule. It is costing $495 million and benefits would affect results starting in the third quarter.
The company expects to complete the latest round of restructuring in 2010, and does not anticipate taking any more such actions in the foreseeable future.
Johnson Controls said it would report second-quarter results on April 21.
Its shares, which closed Thursday at $12.90, have lost almost two-thirds of their value since hitting a 52-week high last May. The stock was down 2.7 percent, or 34 cents, at $12.56 on Friday morning.
(Additional reporting by Christopher Kaufman; Editing by Phil Berlowitz)