TROY, Mich. — ArvinMeritor yesterday issued an update on its plans to reorganize and possibly spin-off its Light Vehicle Systems (LVS) business.
"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. "As previously announced, we were in negotiations to sell the LVS business group in its entirety. However, 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 three divisions body systems, chassis systems and wheels. The company plans to retain the Wheels business and explore the sale of the body systems business. ArvinMeritor said it will also explore strategic alternatives for a “timely and orderly exit” from the chassis systems business.
In May 2008, ArvinMeritor announced a plan to spin off its LVS business to its shareholders within 12 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 said it 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.
"We appreciate Phil’s commitment, dedication and many contributions to the LVS organization," said McClure. "Phil’s comprehensive industry insight, international experience and focus on new product development have been valuable assets to our company."