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Johnson Controls Awards $125 Million Supply Contract As Minority Entrepreneur Expands Into Tennessee

Leading supplier of automotive interior systems sources seating components to new venture

PLYMOUTH, Mich., June 24 /PRNewswire/ -- Detroit entrepreneur Oliver Isaac has expanded his manufacturing business into Tennessee -- with a $125 million automotive parts contract in hand -- thanks to Johnson Controls' (NYSE: JCI) innovative program to recruit and develop minority-owned suppliers.

Isaac, president of American Basic Industries of Detroit, worked closely with officials at Johnson Controls -- one of the world's leading suppliers of automotive interior systems -- to solve some business challenges. Isaac was seeking to expand his manufacturing business. And Johnson Controls was aiming to consolidate production of some key, outsourced seating components at one location.

The solution is Isaac's new venture in Lexington, Tennessee called Manufacturers Industrial Group. The company's 40,000-square-foot plant in that community launched operations last March. Under a five-year, $25 million per year agreement, Manufacturers Industrial Group supplies various seat adjuster components to Johnson Controls that are integrated into seats for Chrysler, Ford, General Motors, Honda and Mercedes-Benz vehicles.

"We had a very positive business relationship with Mr. Isaac in the Detroit area," said Larry Alles, vice president and general manager of purchasing worldwide at Johnson Controls. "He was encouraged to submit a business plan to meet our product needs in Tennessee, and we liked what we saw."

Alles says Johnson Controls has a strong minority supplier development initiative. The company has been recognized as an industry leader in using minority-owned sources. In 1997, the company was named "Corporation of the Year" -- for the second time in a row -- by the Michigan Minority Business Development Council. This award is designed to honor outstanding performance in assisting and doing business with minority suppliers.

The new facility in Tennessee employs 90 people today -- and expects that number to grow to approximately 300 employees by January 1999. It produces seat system pivot assemblies, swivels, frame assemblies and restraint brackets that are shipped to two Johnson Controls plants -- one in Linden, Tennessee and one in Lexington, Tennessee.

Isaac, principal owner and chief executive officer of Manufacturers Industrial Group, says expanding into Tennessee was a challenge -- but was less problematic than he anticipated.

"I received significant support and guidance from the people at Johnson Controls, as well as state and local officials in Tennessee," said Isaac. "From my perspective, the only way to survive today in the automotive industry is to go with and grow with your customers -- which is exactly the opportunity I've had with Johnson Controls."

The decision to source seating components to Isaac's new venture is producing benefits all around, according to Alles. He says Johnson Controls is providing Manufacturers Industrial Group significant assistance in project management, quality systems development and engineering support.

"Like virtually all of our minority sourcing efforts, this is a 'win-win' situation," he said. "Isaac is enhancing his business and providing jobs, and we're replacing multiple suppliers that were geographically dispersed -- with one highly reliable source that's very close to our production facilities."

For the past five years, recruiting and developing minority-owned suppliers has been an integral part of Johnson Controls' business strategy. It has implemented a formal minority supplier development program -- and provides mentoring, scholarship and training opportunities for minority business people. The company also has established strong relationships with many minority suppliers, including Bing Manufacturing, Plastech, Advantage Technologies and Grand Aire Express.

Johnson Controls, Inc., with headquarters in Milwaukee, Wisconsin, USA, is a global market leader in automotive systems and building controls. Founded in 1885, Johnson Controls had sales of US$11.1 billion in 1997 and operates in more than 500 locations around the world. See for more information.

The Plymouth, Michigan-based Automotive Systems Group of Johnson Controls is one of the world's largest suppliers of vehicle interior systems, and is a major supplier of batteries. In 1998, the company's worldwide operations will supply interior products for more than 22 million vehicles. The Automotive Systems Group employs more than 45,000 people at 157 facilities worldwide and achieved $8 billion in sales for the 1997 fiscal year.

SOURCE Johnson Controls
 -0- 06/24/98

/CONTACTS: Dave Roznowski of Johnson Controls, 734-254-5632; or Oliver Isaac of Manufacturers Industrial Group, 901-967-0001/

/Company News On-Call: or fax, 800-758-5804, ext. 473547/


CO: Johnson Controls ST: Michigan IN: AUT SU:


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Publication:PR Newswire
Date:Jun 24, 1998
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