ArvinMeritor, Inc. (NYSE: ARM) today announced that it has taken actions since October 2008 which will result in savings of approximately $430 million on an annual basis.
"The difficult conditions we continue to experience in our commercial and light vehicle markets has required us to take aggressive steps during the past six months to align our organization to the lower capacity levels," said Chip McClure, chairman, CEO and president. "Many of these actions have regrettably impacted our employees, but the ArvinMeritor leadership team is committed to successfully manage the company through the continuing economic turbulence. We identified and implemented these actions quickly and are pleased to report the savings are significant, which will help protect the long-term health of the company."
In the months of February and March, the company implemented initiatives - including the reduction of nearly 250 employees and other cost reduction actions - that will result in annual savings of $95 million, or $64 million in fiscal year 2009 which is incremental to the $335 million in savings the company announced during its first quarter earnings report on Feb. 5, 2009.
Since October, ArvinMeritor has announced the following cost-reduction actions:
- Workforce reduction of more than 1,800 global employees
- Plant-level furlough programs, including government supported programs
- Announced the closure of two manufacturing facilities (Tilbury and Milton, Ontario, Canada)
- Pay reductions for salaried employees worldwide, which was achieved through base salary adjustments and/or curtailed production schedules
- Eliminated matching contribution to the U.S. 401-K
- Suspended merit increases for fiscal year 2009
- Reduced capital spending
- Extended shutdowns at all plants
- Eliminated company-paid education and training programs
- Reduced contribution to the charitable trust
- Suspended quarterly dividend
- Reduced annual Board of Directors compensation by 10 percent
- Eliminated all non-critical discretionary spending
"Through the implementation of these actions, our team continues to demonstrate their commitment to do what is necessary to respond aggressively to the current difficult economic conditions," said McClure.