Johnson Controls Moves to Dissolve Advanced Battery Joint Venture With Saft
Johnson Controls, Inc. took legal action in the Delaware Chancery Court to dissolve the Johnson Controls-Saft (JCS) joint venture. The joint venture was formed in 2006 to develop and manufacture lithium-ion motive battery solutions.
"Johnson Controls and Saft have a fundamental disagreement about the future direction and appropriate scope of the joint venture," said Alex Molinaroli, President, Johnson Controls Power Solutions. "The industry is evolving rapidly and the investments needed to achieve market leadership require us to do more than the joint venture has done or can do."
Johnson Controls believes that as vehicle power train technologies continue to evolve and new markets emerge for advanced batteries, the company must have access to multiple alternative technologies and be able to flexibly participate more broadly across the energy storage space.
"We are confident we will continue to provide our customers with quality products that meet and exceed their needs. Our commitment to our customers and this market is not changed. All of this activity reflects our long-term commitment to be a leader in the advanced battery space," said Molinaroli.
Neither Johnson Controls-Saft, nor any of its subsidiaries, are an active party to the legal action. While the legal issues raised by Johnson Controls are being resolved in the Delaware Chancery Court, JCS states that it remains committed to ensuring that it fulfills all its contractual agreements, including, for example, on-going customer development and related investments, and all supply agreements.
According to Saft, Johnson Controls wishes to expand the scope of JCS beyond the limits set within the 2006 Agreement. Saft has advised JCI that it intends to oppose this filing as it sees no legitimate grounds for the dissolution. Saft has confidence in the strategy, the technological positioning, the management and employees of JCS and sees a profitable future for the venture as outlined in the current Business Plan.
Saft states that it has made a number of constructive proposals to try to reach a compromise agreement with JCI and avoid any legal procedure. According to Saft, these proposals have been rejected by JCI. Nevertheless, Saft states that it remains open to reaching a settlement that avoids protracted legal action and is in the best interests of its shareholders, customers and employees of JCS.
Saft believes that, whilst some adjustments in the scope of the JCS could be considered, it would not be in its strategic interest to address through JCS certain lithium-ion markets where Saft is already strongly positioned and enjoys a rapid development.
