Automobile Equipment Manufacturer ArvinMeritor to Sell Light Vehicles Segment

ArvinMeritor (Troy, MI), a global automobile equipment manufacturer, announced its fourth quarter and fiscal year 2008 earnings on November 18. The company's sales were up somewhat, rising from $1.59 billion in 4Q07 to $1.72 billion in 4Q08. For the year, sales were $7.17 billion, compared with $6.45 billion in 2007. According to a report from Industrial Info Resources (Sugar Land, TX), the sales increase was largely from increased sales outside of the North American market, particularly in the company's commercial vehicle systems (CVS) sector, which manufactures trucks, trailers, buses, military and other vehicles not intended for domestic use.

President and CEO Chip McClure, in a conference call regarding the company's earnings, stated, "Throughout 2008, CVS achieved record sales in all of the regions outside North America. We also maintained our focus on growing our CVS off-highway, military and aftermarket businesses, where we also broke sales records this year. We saw our commercial vehicle aftermarket sales grow by 6 percent in the U.S., 30 percent in Europe, 48 percent in South America and 49 percent in Asia Pacific."

Sales in ArvinMeritor's light vehicle systems sector were less than half of the CVS sales. CVS sales for the year were $4.82 billion, compared with $2.35 billion for the light vehicle sector. "From where we sit in Michigan, we are surrounded by an industry that is reeling from the downturn in the economy," said McClure. "It's clear that conditions could continue to worsen. Given the steps we've taken over the last several years, as well as the initiatives we're executing now, we believe that when the global economies and our industry stabilize, we'll be a stronger, more focused company. But to succeed in today's uncertain global environment requires swift and decisive action. We'll continue to be flexible through the ongoing changes in the market and be responsible to our shareholders by being proactive and taking the necessary steps, as we have demonstrated in 2008, to adjust, adapt and move quickly."

Part of this adaptation includes major restructuring of the company. ArvinMeritor announced that the company intends to sell the entire light vehicles segment of the business, with the exception of the wheels-manufacturing portion. "After careful review," said McClure, "we now believe that selling the LVS [light vehicle systems] business is the best way to maximize its value." The company is also restructuring manufacturing locales through more than $20 million of projects in the U.S. and Canada that belong to ArvinMeritor and its subsidiaries. One of the current projects being monitored is the closure of the company's shock absorber plant in Etobicoke, Ontario. The company is dismantling and removing equipment from the plant in order to be used at a plant in Queretaro, Mexico. The company recently began operation of an axle-manufacturing facility in Cienega de Flores, Nuevo Leon, Mexico. In 2005, the company closed its strut and manufacturing facility in Chickasa, OK, relocating it to Queretaro. The Etobicoke plant began the closure process in June. The entire process is expected to take about a year. The estimated total investment value of the closure of the plant, which will be put up for sale, is $3 million.

www.arvinmeritor.com