ArvinMeritor, Inc. today said it has decided to discontinue talks of selling its Light Vehicle Systems (LVS) business, and instead reorganize it.
"We are firmly committed to our long-term strategy of focusing on the commercial vehicle on- and off-highway market segments for both original equipment manufacturers and aftermarket customers," said Chip McClure, chairman, CEO and president of ArvinMeritor. " … In light of the unprecedented challenges in the credit markets and the volume weakness in our industry, we have determined that in this financial environment we cannot capture the appropriate value for LVS by selling the business as a whole. We are confident that this decision will ultimately generate the best returns for our shareholders."
The company will reorganize its LVS business group to include:
- Body Systems. While the company continues to pursue a sale of the Body Systems business separately, it will be managed to continue to improve its financial performance and to ensure that a future sale will provide an acceptable return to ArvinMeritor shareholders.
- Chassis Systems. The company will continue to explore and evaluate strategic alternatives for a timely and orderly exit from this business.
- Wheels. As previously announced, ArvinMeritor expects to retain the Wheels business.
In May 2008, ArvinMeritor announced a plan to spin off its LVS business to its shareholders within twelve months, contingent upon satisfactory financial and automotive market conditions. Due to the challenging market environment, in October 2008 the company announced that while a spin-off was still an option, it was also investigating alternatives to achieve the separation, including a potential sale.
With today's announcement, ArvinMeritor remains committed to separating the businesses.
During an interim period, LVS Body Systems, as well as the LVS corporate staffs, will report to Jay Craig, ArvinMeritor's chief financial officer. LVS Chassis Systems will report to Jim Donlon, executive vice president, and the Wheels business will to report to Mary Lehmann, senior vice president, Strategic Initiatives, and Treasurer.
Effective immediately, Phil Martens former president of LVS will leave the company to pursue other opportunities.
At the ArvinMeritor 2008 Annual Analyst Day meeting held in New York on Dec. 9, the company provided 2009 first fiscal quarter guidance and a sensitivity analysis for certain financial metrics for expected continuing operations. Due to the changes announced today regarding LVS, the company expects the composition of continuing operations to be different than what was reflected in the news release and presentation distributed on Dec. 9, and assumed for the purposes of discussing the company's continuing operations on a going forward basis. For that reason only, the company is withdrawing the guidance and the sensitivity analysis that was provided at that time.