The negative results are due to the appreciation of the Romanian currency and an increase in work force costs, say industry analysts.
“The appreciation of the RON was quite consistent last year, and component producers, exporters par excellence, were greatly affected by this,” market analysts told Business Standard. The price of oil reached a historic high last year and lead to increases in transportation costs, they added. Company representatives refused to comment on the Romanian subsidiary’s financial results.
In 2005, Johnson Controls Romania had profits of €4.8 million, according to data provided by the Ministry of Economy and Finance, the first positive results since 2000, when the company established a subsidiary in Romania. In 2006, the company registered €93 million worth of business, compared to €82 million in 2005.
The company’s three Romanian factories employ 1,600 workers (up from 1,200 in 2005).
Johnson Controls is the largest automotive interiors producer in Romania and the sole supplier of Dacia. Two of the factories, located in Mioveni and Pitesti, are dealing exclusively with the Dacia-Renault group. The factory in Ploiesti produces exportable automotive interiors for Ford, Opel and Nissan.
The Johnson Controls Group also provides batteries for automobiles and hybrid-electric vehicles, along with systems engineering and service expertise. Bosch, Varta and Caranda dominate the Romanian battery market.
Johnson Controls is one of the largest consortiums on the automotive market, with sales up to €15.3 billion ($20 billion) and some 77,000 employees.
Industry
The automotive industry is the second most dynamic in the Romanian economy, with a 21.2 percent increase in 2006. Some 120,000 Romanians work in the auto parts industry, which generated four percent of GDP in 2006.
