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Is it the ‘green' technologies of Johnson Controls that will lead the race to the USD 50 billion
AI speaks to Stephen A. Roell, who became CEO of Johnson Controls in October 2007, and Dr. Beda Bolzenius, who joined Johnson Controls in 2004 and became president of its automotive experience business in August 2006












For the Milwaukee, Wisconsin-headquartered Johnson Controls, keeping ahead of competition means keeping ahead of automotive trends. Today, environmental concerns provide both challenges and opportunities for the auto industry, and Johnson Controls wants to be at the forefront of providing eco-friendly solutions.

The company unveiled its I3 concept car at the International Motor Show (IAA) in Frankfurt, Germany, and in January this year launched it to the North American market at the North American International Auto Show (NAIAS) held in Detroit. The I3 concept targets the fast-growing, crossover-utility-vehicle or CUV segment, and also addresses the growing market interest in plug-in hybrid electric vehicles (PHEVs) as a sustainable mode of transportation.
Innovation for “Smart” Seating and Interiors

“By seamlessly integrating a wide range of innovations in the I3 concept car – in seating, interiors, electronics and battery products – we’re providing a view of the future possibilities for vehicle interiors and power solutions. Our goal is to create a smart environment that meets consumer demands for vehicle flexibility, connectivity, comfort and sustainability,” said Jeff Williams, group vice president and general manager, North America for the automotive experience business of Johnson Controls.

The I3’s ingenious seating includes two innovations that provide flexibility and additional storage space: a rear-seat row that is completely hidden until it’s deployed for use, and the Johnson Controls “Slim Seat.” The Slim Seat has a thin-profile seat back, which provides the same levels of comfort and safety as a conventional vehicle seat, but uses less metal and material, helping to deliver lighter vehicle weight and improved fuel economy. The company is also rapidly pursuing the use of natural materials like soy-based foam, coconut fiber and latex in its seats, making them more environmentally-friendly.

Johnson Controls’ New Concept Car

Advanced Battery Solutions Serve Up Space, Sustainability

The company’s efforts in developing advanced energy storage solutions for hybrid and electric vehicles are led by its joint venture, Johnson Controls-Saft Advanced Power Solutions. The JV brings together Johnson Controls — the world’s leading supplier of automotive batteries and a company deeply experienced in integrated automotive systems solutions — with Saft, an advanced energy storage solutions provider with extensive Li-ion battery expertise. 
The Johnson Controls-Saft team worked to ensure that the concept vehicle’s propulsion system offers substantial fuel economy and security benefits. Integrated into the vehicle’s trunk is an advanced lithium-ion battery that has been specially designed for plug-in, hybrid-electric vehicles. PHEV batteries are one element of the company’s advanced energy solutions portfolio that targets the full range of hybrid applications, from micro-hybrids to full hybrids.
Compared to nickel-metal hydride batteries, the lithium-ion battery from Johnson Controls-Saft weighs 50 percent less and takes up one-third less space. It is designed to meet all useful life requirements. When regularly plugged into the electric grid at night, the PHEV drivetrain can yield fuel economy performance that is nearly double that of conventional drivetrains.

To ensure safe and reliable performance, the battery system is engineered with multiple layers of protection against abusive operating conditions. This layered approach complements the cell electrochemistry and container design with system-level software and hardware features to maintain functional integrity. The battery is not the only sustainable feature onboard the I3 concept car. Overall, the I3 concept is designed to fulfill the requirements of the 2015 ELV (End of Life Vehicles) directive in Europe. This directive mandates 95 percent recyclability for all new-vehicle systems, components and materials. Nearly all of the Johnson Controls products and innovations included in the I3 concept car are available for production now, and can be integrated into the next generation of vehicles.

Beyond the Concept
In June, Johnson Controls-Saft was selected by Ford Motor Company to supply lithium-ion batteries for a test fleet of PHEVs as part of a complete vehicle, home and grid energy system. The company is also supplying lithium-ion batteries for two new European vehicles, including the 2009 Mercedes Benz S Class and another vehicle which has not yet been announced by the automaker. Johnson Controls-Saft recently announced contracts with Chery, the largest domestic Chinese automaker, Shanghai Automotive Industry Corporation (SAIC), and several other OEMs. Earlier this year, the company opened the world’s first lithium-ion production facility in Nersac, France.

Johnson Controls Global Vision Video

Other high-profile projects are also being worked on by Johnson Controls-Saft. For example, the US Advanced Battery Consortium or USABC, awarded a contract to Johnson Controls-Saft to continue developmental efforts regarding lithium-ion technology for automotive applications. The funding, provided by the US Department of Energy through the USABC as part of the FreedomCAR and Fuel Partnership project, enables Johnson Controls-Saft to continue in-depth research on cell performance and systems development, while continuously improving the value proposition to its OEM customers for lithium-ion technology. The USABC is a consortium of the United States Council for Automotive Research (USCAR), an organization comprised of DaimlerChrysler Corporation, Ford Motor Company and General Motors Corporation.
Johnson Controls is also the world leader in lead-acid battery recycling. For several decades, the company has led the development of a reverse distribution collection infrastructure and worked with other industries, retailers and consumers to promote better recycling. Its ongoing efforts have helped make lead-acid automotive batteries the most highly recycled consumer product in the United States – with 97 per cent of all batteries recycled in the last year.
Automotive Industries spoke to Stephen A. Roell, who became CEO of Johnson Controls in October 2007, and Dr. Beda Bolzenius, who joined Johnson Controls in 2004 and became president of its automotive experience business in August 2006.
AI: Is going green the best way to achieve growth for auto companies today?
Dr. Bolzenius: Consumers are becoming increasingly aware of green technologies and are starting to demand more environmentally-friendly products in their homes and workplaces. This trend is also reaching the vehicle market. Automakers have been listening to the feedback and addressing consumer needs through cars that get better fuel economy, have lower emissions, and include natural materials. We’re able to provide them with systems and components that meet those needs.
It should also be noted, I think, that there are pathways for growth that have been around  longer than “green” but which are still important and valuable.  Suppliers can often deliver growth opportunities through innovative processes or operational efficiencies. As an example, we work with customers using a process called Value Product Planning (VPP) to help them decide what their targeted consumers will value most in a vehicle. We leverage our extensive consumer research to compare possible interior options and predict market demand. In addition, we also focus on ensuring our global footprint is appropriately matched to our customers’ production needs, offering the best value and ensuring the highest quality, so we can help them bring their vehicles to market quickly and cost-effectively.
AI: Johnson Controls hopes to boost revenues to USD 50 billion in five years – where will the growth come from?
Mr. Roell: We’re fortunate to be a global, financially strong, diversified company, so we see many different opportunities for growth. We’re certainly pursuing new geographic markets, as well as efforts to expand our technology base and core business in mature markets. Each of Johnson Controls’ businesses will have an important role in driving this growth.
Our automotive interiors business will play a big part. Given our global positioning, we’re able to bring the best new processes, products and technologies to our customers. We’re partnering with them to develop innovations that will help us follow key trends and identify new products. We’re also very focused on growing the business in China, India, Russia and other emerging markets to take advantage of the rapid growth those economies will see over the next decade.
Automotive batteries and advanced energy storage solutions – especially batteries for hybrid vehicles – also represent a tremendous growth opportunity for Johnson Controls. We see continued expansion of the SLI (starting, lighting, ignition) business in emerging markets and global growth in hybrids and PHEVs.
The combination of new and expanding geographic markets, coupled with advances in technology across our businesses, will be a powerful force in enabling us to meet this goal by 2012.
AI: Is it the ‘green’ technologies of Johnson Controls that will lead the race to the USD 50 billion revenue mark?
Mr. Roell: It will be a balance, but certainly we expect our focus on sustainability to help drive that growth. All three of our businesses are linked to creating green – as well as safe and comfortable – products and environments.
As the leading global supplier of automotive seating and interiors — and the world’s largest molder of automotive urethane foam — we are strongly committed to developing and using ‘eco-friendly’ materials that come from renewable sources. Using greater quantities of bio-materials, such as soy, also can help cut the industry’s reliance on petroleum-based products.
We’re also looking at combining economic and ecological objectives with our FaserTec seat pads, made out of coconut fiber and latex. Compared to conventional manufacturing methods, FaserTec production requires fewer process steps and materials – making it more economical to produce. The pads are easier to recycle and the process reduces the overall volume of emissions during production.
In addition to our relatively new leadership in lithium-ion technology, our power solutions business has been working for over 15 years on developing nickel metal hydride batteries for hybrid vehicles. In Europe, buses that operate along regular service routes are already equipped with Johnson Controls hybrid batteries.
And obviously, “green” is the core of our building efficiency business, which focuses on energy efficiency solutions for homes and commercial buildings. We’re well-positioned to deliver products, systems and advisory services that help our customers reduce their energy use. We have the world’s largest service fleet – more than 13,000 technicians globally – and are also working on the integration of renewables, including wind, solar, biomass, geothermal and other technologies.
AI: What kind of impact has the I3 concept had so far?
Dr. Bolzenius: We demonstrated the I3 concept at the IAA in Frankfurt, Germany and the North American International Auto Show in Detroit, Michigan. We’ve also shown it separately to several automakers and customers – and the response has been very positive. It’s given both Johnson Controls and the automotive community the opportunity to move away from day to day business and spend quality time discussing our visions for the future and how they align. 
This vehicle leverages Johnson Controls’ global synergies and sustainable solutions. But although we call I3 a concept, nearly all of the products and innovations are available for production now, and for integration into the next generation of vehicles.
AI: Which technologies used in I3 are particularly relevant to auto manufacturers today?
Dr. Bolzenius: Our customers have been very interested in our seating innovations – the Slim Seat and the invisible rear-seat row which make more space available. This is particularly important right now as we see a growing trend towards more fuel-efficient, smaller cars. The Slim Seat, with its thin seat back, is just as safe and comfortable as any conventional seat. Different safety or comfort features can be integrated in alignment with individual customer preferences – like the active head restraint or lumbar support, which are both included in the concept car.
Furthermore, the auto manufacturers are interested in our two-color RIM alpha technology. The strength of this surface technology lies in the ability to create multi-colored parts in a single processing step – therefore increasing cost-effectiveness. The ability to adjust the wall thickness is also particularly beneficial when it comes to air bag integration. The two-color RIM alpha surface on the instrument panel also enhances the perceived value of the interior.
The topics of ergonomics and driver safety also play an important role in the automotive industry today. We presented a hybrid instrument cluster in our concept car that ensures the best possible human-machine interface by reducing the information processing and driver distraction time. And our riACT head restraint is an important safety product for Johnson Controls. It improves the anti-whiplash protection offered by vehicle head restraints, and enables automakers to meet current and future safety requirements targeting a reduction in the prevalence and severity of neck injuries in low speed rear-impact collisions.
Other positive responses have come from our technologies that are linking people to their vehicles: for example, our mobile device gateway which links electronic devices – such as mobile phones, navigation devices and digital music (MP3) players – to the vehicle,  and touch screen displays that feature all conventional controls in a single panel, reducing the need for about 20 mechanical buttons and knobs.
AI: What kind of potential do lithium-ion batteries have compared to regular nickel-metal-hydride batteries?
Mr. Roell: At this time, most hybrid-electric vehicles (HEVs) rely on nickel-metal hydride batteries. As the design of HEVs continues to evolve, so must the energy storage devices that keep them mobile and efficient. Lithium-ion technology harnesses lithium, a plentiful material with a high energy density, and applies it to HEV battery systems. They offer major advantages in terms of power generation, size, weight, cycle life and cost – weighing up to 50 percent less and taking up one-third less space.    Johnson Controls is a global leader in developing and bringing this technology – including both the system capability for power management as well as the cell chemistry – to the global automotive community.
The global market for HEVs has increased steadily during the past year, fueling demand for enhanced power-storage and power-management technologies for hybrid cars and trucks. According to industry projections, sales of HEVs in the U.S. and European automotive markets could reach 6 million units within a decade.
AI: What is your strategy to expand in developing economies like China, India, Brazil and Russia?
Mr. Roell: Our strategies vary based upon the business, the market, the regulatory environment and the realities of doing business in these countries. But in general, we focus on anticipating and meeting the needs of our customers, just as we do in other parts of the world. The main differences stem from the fact that their needs are somewhat different in these markets.
In the automotive business, it’s been our practice over the last decade to pursue joint ventures with local suppliers to provide global expertise in seating, interiors, and electronic components. We focus on enhancing our customer / partner relationships, and try to leverage our footprint to grow with the OEMs as they build their businesses in these countries. We’re also developing new products, such as economical seating options specifically designed for these markets, to better accommodate our customers’ marketing objectives.
In the power solutions business, we’re expanding our manufacturing and distribution capabilities. We also have great opportunities to help emerging markets develop a “closed loop” system for lead reclamation and battery recycling. Last year, we took a number of Chinese officials on a global tour to show them what we think are the best practices in this arena. And just as in the developed markets, we’re working to bring hybrid battery technology to China and are supporting that by forming alliances with government entities, automotive manufacturers, suppliers, universities and research centers accelerating technology growth.
As we see GDP increase in developing economies, we’ll see increased demand for air conditioning and refrigeration services – which will of course benefit our building efficiency business. So we’re looking to expand our coverage of these systems, and subsequent service support, and fill out our product line in these growth markets.
AI: How is this strategy different from that used to boost revenues in markets in Europe, North America and other developed countries?
Mr. Roell: Some of the elements are similar, but in the more mature markets automotive industry customer relationships are typically longer, broader – involving more people in both Johnson Controls and in the customer organizations — and therefore are somewhat more complex.   
In these markets, we’re continuing to build our relationships with customers on an ongoing basis. There’s a lot that goes into that – we need to leverage our scale, manage our footprint, use our “best business practice” approach to drive operational excellence and reduce overhead, streamline our product and process portfolio, optimize capacity, and strengthen technical competence and product design capabilities to ensure continued competitiveness. That’s largely true for both the automotive interiors business and the power solutions business. This has required us to become adept in supporting our aftermarket customers through marketing, category management and other merchandising programs.
In our building efficiency business, we see lots of opportunity to grow in the energy services arena. We’re focused on growing in both the complex market (i.e. hospitals, universities) as well as in the mid-market (i.e. schools, office buildings). These markets are larger in the developed world than they are in the developing markets, and the technology requirements are different, too. Additionally, the service and retrofit markets in North America and Western Europe are larger than they are elsewhere, and continue to grow as businesses decide to improve their existing buildings vs. engaging in new construction.