As published in Toledo Business Journal - August 1, 2019

Clarios’ facility in Holland, Ohio, formerly Johnson Controls

Clarios’ facility in Holland, Ohio, formerly Johnson Controls

Clarios executing $10M expansion plan

Company has invested over $200M in Holland operations since 2012

Clarios, formerly Johnson Controls Power Solutions, recently launched as a new entity and a leader in advanced energy storage solutions. During 2019, Clarios is spending $10 million for capacity expansion at its Holland operations and – since 2012 – has invested over $200 million at the Holland site. The company sees opportunity to grow its lead-acid battery products further even as the business faces competition from the differing battery technology electric vehicles (EV).

According to Clarios, it will build on its market position in vehicle battery technologies – producing one-third of the automotive industry’s total output per year – while more aggressively exploring ways to meet the fast-growing energy storage needs of tomorrow. Clarios sees opportunities with its advanced lead-acid battery capabilities.

“At Clarios, our vision is to power progress by creating the world’s smartest energy storage solutions that benefit people, business, and the planet,” said Joe Walicki, president, Clarios. “As a global leader with a product used in virtually every vehicle from conventional to fully electric, we are well positioned to capitalize on market trends, including a move toward more electrified and autonomous vehicles which are elevating the critical role of the battery and accelerating the need for more advanced batteries. Under Brookfield’s ownership, we can better capitalize on these growing trends and operate with more focus and efficiency.”

Background as a global supplier

Clarios, headquartered in Wisconsin, was acquired by Brookfield Business Partners and operates as a global energy storage business generating $8 billion in revenues annually with more than 16,000 employees, 56 facilities worldwide, and 130 years of expertise.

In an interview with Toledo Busines Journal, Petar Oklobdzija, group vice president and general manager of the Americas for Clarios, explained that the company manufactures 154 million batteries globally on an annual basis through two major channels. This includes directly to 85% of the original equipment manufacturers (OEM) – such as General Motors, Hyundai, Kia, Toyota, Lexus, and Honda, among others – and also through the aftermarket – such as Auto Zone, Walmart, and Pep Boys, among others. In total, according to Oklobdzija, the company provides its battery solutions to 150 countries around the world.

“We’re the global market leader on the OEM side and we’re also the global market leader on the aftermarket side in terms of automotive batteries,” said Oklobdzija. “Our headquarters, which includes a BTC or Battery Technology Center, is based in Milwaukee and we also have a big development center in Hanover, Germany. So those are the two main campuses globally, but we cover four regions in total. One being the Americas, so North America and South America; one being EMEA, so Europe, the Middle East, and Africa; another being Asia Pacific, which is everything in Southeast Asia excluding China; and then China, because it’s so big and we’ve just entered that market in the last decade or so.”

Ford Motor Company recently awarded the Holland manufacturing plant its Q1 Certification – a foundational requirement for the automaker’s suppliers around the world. Clarios, according to the company, is the only battery supplier in the US to achieve this designation, which recognizes excellence across four categories: quality, performance, capable systems, and warranty.

“We’re proud to strengthen our ongoing relationship with Ford, and look forward to serving as a trusted supplier of advanced battery technologies into the future,” said the company.

Growth strategy and technology

Clarios is aware of the industry shift towards electrification, whether that be electric vehicles (EVs) or more amenities within a vehicle – start-stop engines, heated seats, cooled seats, powered seats, lane change correction, active parking support, and active cruise control, among various other features – but the company is confident in its advanced lead-acid battery capabilities. Clarios’ investment in the Holland plant, as well as other plants around the world, is due to the increasing demand for its advanced battery called Absorbent Glass Mat (AGM), a stronger, more robust type of battery.

“More has changed here in the last 10 to 15 years on the lead-acid side for automotive batteries than probably in the previous 50 years,” said Oklobdzija. “With the changes in the industry came the introduction of more advanced lead-acid batteries that have different functions and provide different capabilities for OEMs.”

Clarios’ Q1 Certification celebration at its Holland manufacturing plant

Clarios’ Q1 Certification celebration at its Holland manufacturing plant

Oklobdzija explained how a traditional battery worked within a vehicle and how increased fuel economy regulations around the world, new electrification within vehicles, safety within EVs, the current assets on the ground for OEMs, the cost of designing various vehicles over and over again, and the downsizing of engines, among a range of other variables working with and against each other, created the need for a new, stronger battery – the AGM battery.

“With this AGM technology, what you’re able to do is kill the engine and all the accessories that you have within your vehicle – your air conditioning, your radio, your wipers, etc. – run off the battery. So the usable energy in that battery is becoming more and more of a critical feature, as well as the ability to cycle a battery up and down and the speed at which you can do that. With these factors, the traditional flooded batteries that I grew up with would kill that battery pretty quickly. The AGM batteries are designed to cycle thousands and thousands and thousands of times without harming the battery over time,” said Oklobdzija. “The fundamental difference between the two batteries is that you have no suspended acid in the AGM batteries. Instead, you have an Absorbent Glass Mat that separates the positive and negative plates. The acid gets absorbed in there, so if you drill the hole in the side of that AGM battery, you might get two or three drops of acid that comes out of it versus the traditional one. So what that does is the active material is then better utilized. So you’ve got a much more robust design, you have a better cycling capability, you get more usable energy out of it, and you also get a safer product as well.”

Oklobdzija also noted that since the AGM batteries are safer, more reliable, and more robust, the battery can be placed in various places other than under the hood, which in turn allows OEMs to use that space or elsewhere for different features, which is an important benefit.

“If the whole world went electric tomorrow, we really don’t care, and that’s actually a good thing,” said Oklobdzija. “As you go through the features and benefits of AGM batteries, there’s a long list in terms of why that technology is becoming more and more prevalent in the marketplace.”

Sustainability

According to Clarios, it will build on decades of leadership where it designs, builds, recovers, and recycles batteries to help create a more efficient and sustainable approach to energy storage.

Clarios batteries are designed and made so up to 99% of the materials can be recovered and reused in the new batteries it makes. Through innovative collaboration with the company’s customers and partners, Clarios has pioneered a closed-loop collection system that is a model for the circular economy that it continues to share across the globe.

“If someone asks me what I do, the easy answer is we manufacture and we sell batteries, but we do more than that as a company. We’re helping the environment by reducing CO2 emissions. From a sustainability perspective, people have got to get to work every morning and their car has to start. Doctors have to get to hospitals, school buses have to get kids to school,” said Oklobdzija. “We’re trying to create a sustainable world for the generation that’s behind us in everything that we do and we partner with our customers to find a way to improve the overall sustainability of the environment. We also beat all the regulations by more than 50% in terms of emissions and employee health and safety performance. So when you talk about sustainability and environmental responsibility, that’s core to our values.”

Clarios’ $10M Holland plant capacity expansion

Now, as AGM technology becomes more and more prevalent in the industry, Clarios has had to invest in its operations and grow with its business. Since 2012, the company has invested over $200 million in its Holland facility and created 300 jobs. The company has taken this plant from 250,000 square feet to 500,000 square feet, has nine AGM lines operating, and now has an additional $10 million being invested in 2019 for its AGM technology, as well as 30 new jobs.

“Before you drop $200 million, you’re going to want to make sure that investment isn’t for the next five years, it’s for the next 50. We’re very committed to this location as we have continued to make the investments,” said Oklobdzija. “This plant has been here since 1981, and since that time, we’ve shipped 100 million-plus batteries out of this facility. We have a skilled workforce here with a pool of labor in this community that we know we can continue to tap into. And when we make these investment decisions, we don’t make them lightly.”

Oklobdzija explained that the capacity plan entails multiple steps, as the company has had to line everything up in terms of the overall capacity for each of the processes within the plant.

“As we put the lines in for assembly, there are multiple steps. We have to make the plates, then we have to assemble the batteries, then we have to activate those batteries, fill them with acid, then boost charge them to get them active. Basically, as you bring up the assembly, you’ve got to bring up the oxide capacity, the plate making capacity, the formation capacity, etc. So we’ve just been getting everything lined up in terms of the overall capacity for each of the process steps within the plant over the last seven years, and we are now putting on the final touches,” said Oklobdzija.

 

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