Johnson Controls Inc. on Monday announced a reorganization of its Milwaukee-based building efficiency business and the departure of that division’s president for the past nine years.
The company said it will separate its North Americanservice business from the global products business that the company is seeking to expand through acquisitions. Theservice business accounted for nearly half the $10.3 billion in sales reported last year by the overall building efficiencies business.
The move comes as the company prepares to start a new fiscal year Oct. 1, the second year with Alex Molinaroli as chairman and chief executive. He has led an overhaul of the state’s largest company by sales, seeking to rely less on the auto industry and invest to expand the building business, based in downtown Milwaukee at 507 E. Michigan St.
Sales of heating, ventilation and air-conditioning products “will drive profitable growth through investments” including the recent acquisition of Air Distribution Technologies Inc. and its planned joint venture with Hitachi for highly efficient variable refrigerant flow technology, the company said.
Dave Myers, president of the building business since 2005, “has resigned and is leaving the company to pursue other interests,” Johnson Controls’ statement said.
Myers had moved up through the ranks at Pennsylvania-based York International, where he became president and chief executive in 2003, two years before Johnson Controls bought York for $3.2 billion and named him the leader of the building business.
Bill Jackson, who joined Johnson Controls in 2011, is the new president of the building efficiency business, the company said. Jackson served most recently as executive vice president of corporate development.
The company said its North America building service business will continue to provide heating, ventilation and air-conditioning systems and services to customers in more than 120 locations in the United States and Canada.
Trent Nevill, vice president and general manager of the branch business, will continue in that role, reporting for now to Molinaroli.
In an interview Monday, Molinaroli said the changes will help simplify the Johnson Controls building business for investors and customers, as well as provide new direction for the building business at a pivotal point.
“It’s time,” he said. “We’ve been going at the current set of strategies for almost a decade and I think that as we acquire these new companies, and as we focus on becoming a products business, along with this shift in focus, being able to bring in some fresh eyes and experience is the right thing to do.”
Molinaroli said he tapped Jackson to lead building efficiency because “he’s a change agent, he’s a strategy guy and he’s into the details.”
Jackson, who spent 20 years as a business consultant, joined Johnson Controls in 2011 as vice president of innovation. Since then he’s worked closely with retired Chairman Steve Roell and Molinaroli in the Glendale corporate office on key changes in the company’s portfolio, including the move to divest automotive electronics as well as the Hitachi joint venture and purchase of ADT.
It’s the second move in as many years that Molinaroli has made to split up the building business. A year ago, he split off the $4 billion global workplace solutions business that manages real estate and energy use for large multinational corporations.
The building service business now being split off “is the original Johnson Controls, it’s a legacy business for us that developed over decades, and it’s working fine. It does really well,” Molinaroli said.
Molinaroli emphasized there is no plan to divest the service business, saying both that division and the building efficiency division are “core businesses” that the company wants to expand.
In addition, he rejected as “inaccurate” speculation by Wall Street analysts that Monday’s move is a signal that the company will sell off its residential York brand heating and cooling equipment business.
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