Tough times force ArvinMeritor to reorganize LVS biz

TROY, Mich. — Instead of selling its Light Vehicle Business group, ArvinMeritor has decided to reorganize the business.

In May 2008, ArvinMeritor said it would 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.

ArvinMeritor remains committed to separating the businesses.

"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."

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 make a future sale more attractive.

The company will continue to explore and evaluate strategic alternatives for a timely and orderly exit from the cassis systems business.

As previously announced, ArvinMeritor expects to retain the Wheels business.

Effective immediately, Phil Martens, former president of LVS, will leave the company to pursue other opportunities.