ArvinMeritor announced Tuesday, Nov. 18, that it will focus on selling its Light Vehicle Systems unit as part of its aggressive response to the current weakness in global business conditions. J.P. Morgan is the company’s financial adviser related to the separation of the business.
“Declining global market and credit conditions are the primary factors that have led us to expand our options for separating the LVS business group, excluding the Wheels business located in South America and Mexico,” says Chip McClure, chairman, president and chief executive officer of Troy, Mich.-based ArvinMeritor. “After a comprehensive review of those options, we have determined that a sale will be our primary focus.”
In May 2008, ArvinMeritor first announced its plan to spin off its LVS business to its shareholders within 12 months, contingent upon satisfactory financial and automotive market conditions. On Oct. 31, ArvinMeritor said that it was investigating other alternatives to achieve the separation, including a potential sale. ArvinMeritor also announced at that time that it would be executing comprehensive restructuring and cost-reduction initiatives and expected that in fiscal year 2009 that it would achieve $125 million in annualized savings related to those actions.
ArvinMeritor also said on Oct. 31 that it was implementing proactive cost-reduction actions to keep a strong focus on cash flow by maintaining tight controls on global inventory, pursuing working capital improvements and significantly reducing discretionary spending.