Company Taking Necessary Actions to Offset Surging Steel and Energy Prices
TROY, Mich., May 13 /PRNewswire-FirstCall/ -- ArvinMeritor, Inc.
(NYSE: ARM) today reported that it plans to initiate a new commodity surcharge
starting June 1, 2008.
"As a result of the sudden and extraordinary surges in the price of steel,
energy and other commodities, we are implementing a monthly review and
adjustment process on all products," said Chip McClure, chairman, CEO and
president of ArvinMeritor. "We have a portfolio of complex products that
require varying levels of commodities. We plan to adjust the surcharge as
appropriate for each product line."
In ArvinMeritor's second-quarter earnings report issued on April 29, 2008,
the company stated that the unprecedented volatility in the commodity
markets -- including a global shortage of scrap steel, a rapid escalation in
the price of critical raw materials such as iron ore, coking coal and metal
alloys, and higher fuel and energy costs, would require it to take recovery
actions to mitigate a significant impact to the company's financial results.
McClure continued, "We remain diligent in the performance improvement
actions and cost reduction initiatives we are driving throughout our worldwide
operations, however, these will not be enough to offset the level of cost
increases we are experiencing. Our global team has worked hard to improve the
company's financial results, and we have the responsibility to take the
necessary actions to protect our bottom line.
The Commercial Vehicle Systems and Light Vehicle Systems business groups
have conducted an extensive analysis to determine the magnitude of this
situation and its potential effect on the business," said McClure. "Results of
that analysis clearly indicate that immediate actions are necessary."
The company has begun discussions with its customers prior to implementing
ArvinMeritor, Inc. is a premier global supplier of a broad range of
integrated systems, modules and components to the motor vehicle industry. The
company serves commercial truck, trailer and specialty original equipment
manufacturers and certain aftermarkets, and light vehicle manufacturers.
Headquartered in Troy, Mich., ArvinMeritor employs approximately 19,000 people
in 24 countries. ArvinMeritor common stock is traded on the New York Stock
Exchange under the ticker symbol ARM. For more information, visit the
company's Web site at: http://www.arvinmeritor.com/.
This press release contains statements relating to future results of the
company (including certain projections and business trends) that are
"forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are typically identified by
words or phrases such as "believe," "expect," "anticipate," "estimate,"
"should," "are likely to be," "will" and similar expressions. Actual results
may differ materially from those projected as a result of certain risks and
uncertainties, including but not limited to global economic and market cycles
and conditions; the demand for commercial, specialty and light vehicles for
which the company supplies products; availability and sharply rising cost of
raw materials, including steel and oil; risks inherent in operating abroad
(including foreign currency exchange rates and potential disruption of
production and supply due to terrorist attacks or acts of aggression); OEM
program delays; demand for and market acceptance of new and existing products;
successful development of new products; reliance on major OEM customers; labor
relations of the company, its suppliers and customers, including potential
disruptions in supply of parts to our facilities or demand for our products
due to work stoppages; the financial condition of the company's suppliers and
customers, including potential bankruptcies; possible adverse effects of any
future suspension of normal trade credit terms by our suppliers; potential
difficulties competing with companies that have avoided their existing
contracts in bankruptcy and reorganization proceedings; successful integration
of acquired or merged businesses; the ability to achieve the expected annual
savings and synergies from past and future business combinations and the
ability to achieve the expected benefits of restructuring actions; success and
timing of potential divestitures; potential impairment of long-lived assets,
including goodwill; potential adjustment of the value of deferred tax assets;
competitive product and pricing pressures; the amount of the company's debt;
the ability of the company to continue to comply with covenants in its
financing agreements; the ability of the company to access capital markets;
credit ratings of the company's debt; the outcome of existing and any future
legal proceedings, including any litigation with respect to environmental or
asbestos-related matters; the outcome of actual and potential product
liability and warranty and recall claims; rising costs of pension and other
post-retirement benefits and possible changes in pension and other accounting
rules; as well as other risks and uncertainties, including but not limited to
those detailed herein and from time to time in other filings of the company
with the SEC. These forward-looking statements are made only as of the date
hereof, and the company undertakes no obligation to update or revise the
forward-looking statements, whether as a result of new information, future
events or otherwise, except as otherwise required by law.
(Logo: http://www.newscom.com/cgi-bin/prnh/20010524/ARVINLOGO )
SOURCE ArvinMeritor, Inc.
CONTACT: Media, Krista McClure, +1-248-435-7115,
email@example.com, or Investors, Terry Huch, +1-248-435-9426,
firstname.lastname@example.org, both of ArvinMeritor, Inc.
Web site: http://www.arvinmeritor.com