Johnson Controls to stop lead battery production at Shanghai plant

Sept 24 Mon Sep 24, 2012 10:24am EDT

Sept 24 (Reuters) - Johnson Controls Inc, which makes batteries and interiors for automobiles, said it would stop manufacturing lead-acid batteries at its Kangqiao plant in China, eight months after the Shanghai municipal government ordered it to suspend production at the unit on alleged contamination-related issues.

The government had ordered the unit in February to halt the production of lead-acid batteries after the plant was linked to incidents of contamination in Shanghai that sickened some children.

The company said in a statement that it will shift lead-acid battery manufacturing to other Johnson Controls facilities in China, and that customers would not be impacted.

Storage, labeling, prepping, and shipping of batteries manufactured in other facilities will continue, it said.

Johnson Controls also said the operational change would require it to cut jobs.

The company said it is working with interested employees to explore the possibility of transferring them to other facilities, and offering severance packages "that are well above legal requirements".

Shares of Johnson Controls were down about 1 percent at $28.25 on Monday morning on the New York Stock Exchange.