Johnson Controls & Hitachi Finalize Global Air Conditioning Joint Venture

Johnson Controls & Hitachi Finalize Global Air Conditioning Joint Venture

Hitachi Appliances supplies HVAC products including residential room air conditioning to variable refrigerant flow systems, and other air conditioning equipment for commercial and industrial use. 

Oct. 1, 2015 — Johnson Controls, Hitachi, Ltd., and Hitachi Appliances, Inc. today announced the companies have completed their global joint venture agreement and will immediately commence operations of Johnson Controls-Hitachi Air Conditioning, to provide global customers with a full range of world class air conditioning products and technology.

Johnson Controls has acquired a 60 percent ownership stake of the new entity, which has more than approximately $2.8 billion in annual worldwide sales. Hitachi Appliances retains ownership of the remaining 40 percent of the company.

The joint venture means that 14,000 employees in 24 global locations will now be dedicated to design, engineering and manufacturing throughout Asia, Europe and Latin America. Sources say the joint venture will build on both organizations' technology, research and development leadership, and will serve to expand marketing channels.

Customers globally will now have the most diverse range of air conditioning products in the industry, including Hitachi’s world-class variable refrigerant flow systems, residential air-conditioning solutions, high-efficiency chillers and leading-edge rotary and scroll compressors – in addition to Johnson Controls’ industry leading HVAC and building automation solutions.

The joint venture’s management team will be led by Franz Cerwinka, chief executive officer, and Shinichi Iizuka, chief operating officer and president. Cerwinka has 20 years of experience with Johnson Controls, including four years in Japan as vice president of finance with the company’s automotive business and work with more than ten joint ventures. Iizuka has been with Hitachi for over 35 years, having spent eight years in India as the president of Hitachi Home & Life Solutions India Ltd. He has led Hitachi’s air conditioning business since 2013.

“We are very pleased to start operations and are anxious to serve our customers with an unmatched global network of channels and technology,” said Cerwinka. “Johnson Controls and Hitachi are a perfect match with our complementary product lines, unparalleled brands and rich 100-year histories.”

“I have spent my career with Hitachi and know that combining with Johnson Controls will propel us forward to outperform the competition,” added Iizuka. “Just as Hitachi and Johnson Controls have each made innovation the foundation of their separate success, innovation will now be the cornerstone of Johnson Controls – Hitachi Air Conditioning’s success.”

Johnson Controls is a global multi-industrial company with 130 years of history in supplying heating, ventilation, air-conditioning, building controls, refrigeration and security systems for buildings. Through its Building Efficiency business, the company delivers solutions that increase energy efficiency and lower operating costs for over a million customers who are served through nearly 700 offices in more than 150 countries. Through a previous OEM agreement, Johnson Controls has already begun selling Hitachi Variable Refrigerant Flow (VRF) systems in North America and recently opened a VRF training center in Dallas, Texas.
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Competitive Advantage: an Interview with Bill Jackson

Bill Jackson

"We're very excited," said Bill Jackson, president of Johnson Controls' Building Efficiency business, commenting on the news of the JCI/Hitachi joint venture. "We've already launched Hitachi VRF products in North America, and it's going better than we expected," Jackson said, adding that since March, VRF sales have already reached approximately $40 million.

Jackson made his remarks during an exclusive interview with Terry McIver of ContractingBusiness.com, a leading magazine for the HVACR industry.

The joint venture unites two long-established brands with significant histories of product research and development, and extensive market reach.

"Hitachi has a great presence in Taiwan, China, Japan, and India. Johnson Controls has a significant air conditioning business in China on the applied side, and now, with the VRF business, we'll be the number one player in China on the commercial AC side," Jackson said.

Jackson said the Hitachi joint venture adds an additional capability to JCI's already comprehensive HVAC-related split system product lines, which include products by York, Coleman, Luxaire, and the recently released Champion LX line.

"We've launched a new York product for the residential market, which is getting great reviews," he said, referring to the new York LX series packaged unit. "Its packaging is better, it fits into spaces better and has an improved SEER rating (14 SEER).

Jackson continued, to say that the joint venture will offer strategic technology sharing opportunities between the two companies.

"That's one of the great things we have going for us," Jackson said. "We're putting our embedded controls across all of our products. We have a few thousand chillers now online, and we can track more than 200,000 control points. So we're solidly into 'Internet of Things' applications."

Additionally, Jackson said a multiple brand and segment player such as JCI offers significant turnkey advantages for building customers.

"If the customer is using our chillers and our Metasys system, and then needs a VRF installation, we're able to oblige. It's a competitive market, and this joint venture offers another great opportunity for our branches to win in the marketplace, and is a solution to address competitive issues for a number of players," Jackson said. — Terry McIver

 

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