Johnson Controls promises stability

Executives from the former York International Corp. and Johnson Controls Inc. appeared together at a recent national trade show under the slogan, "Together we can do more."

The catchphrase was coined to convince 60,000 attendees at the International Air Conditioning, Heating & Refrigeration Exposition in Chicago last month that the merger of the multibillion dollar companies would help their business.

"Everyone wanted to know what we were going to do as a combined team," said C. David Myers, president of the building efficiency business at what is now called -York, a division of Johnson Controls." Myers had been York International's president and chief executive officer.

Many HVAC representatives wanted to know if York would continue to serve its residential customers, said Darryll Fortune, director of public relations with Johnson Controls Group.

"That was the biggest question. And the answer is, 'Yes.' We'll keep it as it is," Fortune said.

But for local York employees, the largest question is whether the corporate giant will keep its business in Central Pennsylvania.

"We have a wait-and-see attitude," said Blaine Cunningham, president of United Auto Workers Local 1872, which represents 267 workers at York's Grantley facility "We're trying to set up meetings to see what direction they're going to take the plant in."

In December, Johnson Controls purchased York International for $3.2 billion. The deal was not only big in Central Pennsylvania; it was one of largest in the state last year, said David Taylor, vice president of communications with the Pennsylvania Manufacturers' Association.

Johnson Controls is one of the world's largest suppliers of automotive components. It also is a major manufacturer of building infrastructure systems. The Milwaukee-based firm has about 120,000 employees worldwide.

York employs about 1,700 workers in Central Pennsylvania, according to Business Journal records. The two companies started discussing a merger about nine months ago and announced their plans in August. The deal was finalized in December.

The merger of the two companies will allow each company to supply products and services to the other's customers. For instance, Johnson can offer its own integrated controls and York's HVAC/refrigeration systems. York can offer its residential customers fire and security controls for their buildings.

Hospitals, schools and other facilities are independently shopping for HVAC and building control systems today, Myers said. The merger will allow customers the opportunity for "one-stop shopping."

It also will give Johnson a stronger position in growing international. markets, especially China, Central Europe, Latin America and the Middle East.

It is still uncertain what will happen in Central Pennsylvania. The exact implications of York's sale will become clear in the next 18 months, Johnson executives said.

While the merger is expected to increase business, it did not come without some difficulty.

Since December, more than 200 workers have been laid off at York International's former headquarters in Spring Garden Township. Most of the positions were administrative, attorneys, accountants and senior managers who duplicated jobs at Johnson's Milwaukee headquarters. A dozen union employees were among those who lost their jobs, Cunningham said.

While Myers acknowledged morale was down collectively at the York County facility, most employees in the rest of the company understood some layoffs had to occur. Many workers are pleased about the merger.

"For the people directly impacted, certainly this has been a tougher situation," Myers said.

The company sponsored a job fair earlier this month to help the displaced professionals find new employment.

Local industry analysts are withholding judgment on the merger, but they say it appears the deal may be a positive thing for Central Pennsylvania.

The fact that Johnson viewed the York International purchase as a complement to its own business instead of as a competitor they were trying to eliminate is an encouraging sign, Taylor said.

Ken Slaysman, associate professor of business with York College of Pennsylvania, pointed out that IndustryWeek magazine identified Johnson Controls as one of its 50 Best Manufacturing Companies in 2005.

Becoming part of such an outstanding performer may mean that York International's performance in its sector may improve. That's great for the region, Slaysman said.

But not being headquartered in York may reduce the company's stake in the community.

"I stress may because only time will tell," Slaysman wrote in an email response.