Week of January 29, 2001
  Snapshot from the Field

900 Employees Switch Employers
Novartis, Johnson Controls Finalize
Major European Outsourcing Pact

By JACK LYNESite Selection Executive Editor of Interactive Publishing

Johnson ControlsATLANTA AND BASEL, SWITZERLAND -- A wave of Central European workers are headed from the corporate to the service-provider side as part of a new seven-year agreement between Novartis AG (www.novartis.com) and Johnson Controls (www.johnsoncontrols.com).
      NovartisThe deal, previously announced but only finalized last week, has a broad reach, encompassing both facility management and infrastructure services.

Deal Spans 7 Million Sq. Ft.

Under the terms of the seven-year agreement, Johnson Controls' Atlanta-based Integrated Facility Management Division (IFM at www.johnsoncontrols.com/IFM) will provide services for four sites that are part of Novartis' headquarters complex in Basel, Switzerland. Together, the four sites span 17 million sq. ft. (1,530 sq. m.) of manufacturing, R&D and administrative space.
      Executives from both companies said that the pact "will deliver guaranteed savings to Novartis." Specifically, the agreement provides that Johnson Controls will "standardize facility management service delivery to Novartis," according to Johnson Controls' officials. They added that Johnson Controls will also provide Novartis with "technical services that include production support, fire, security, synthetics technology and company health services."

900 Employees Move to Johnson Controls

Another part of the pact provides that Novartis will have minority holdings in a joint venture, Johnson Controls IFM AG, for what officials from both companies jointly described as "a two-year transition period."
      In addition, as the agreement's broad range of services might suggest, the contract provides that 900 Novartis Basel-based employees will move over to become employees of Johnson Controls. Johnson Controls' executives have publicly declared that the company "plans to retain every Novartis employee impacted by the agreement."
      "We are excited about the level of talented people that are joining us from Novartis," Mike Friedl, CEO of Johnson Controls IFM AG, said as the final agreement was disclosed. "As our business grows in Central Europe, these employees will have many opportunities for further career growth with Johnson Controls."

'Track Record' Added Edge, Says Executive

Johnson Controls' record with other pharmaceutical clients, said IFM President Robert Netolicka, was a key in landing the contract with Novartis, which has more than 66,000 employees based in more than 140 worldwide nations.
      "Our performance track record with 12 pharmaceutical industry clients gave us the competitive edge in securing the Novartis contract," Netolicka said.
      Johnson Controls' IFM facility-management portfolio of more than 1 billion sq. ft. (9 million sq. m.) also includes a sizable representation of high-tech manufacturers. The company's high-tech facility-management portfolio includes the Paris-area headquarters complex of General Electric Medical Systems (GEMS at www.gemedicalsystems.com), which manufactures medical imagery equipment. The GEMS site covers more than 42.5 acres (17 hectares), with 2,000-plus engineers and technicians housed in 6.1 million sq. ft. (55,000 sq. m.) of corporate space.
      Johnson Controls' IFM officials call the Novartis pact "one of the largest outsourcing agreements in Central Europe."


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