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DOCUMENT AND ENTITY INFORMATION - USD ($)	12 Months Ended
DOCUMENT AND ENTITY INFORMATION - USD ($)	Sep. 30, 2011	Nov. 04, 2011	Apr. 02, 2011
Document and Entity Information [Abstract]
Entity Registrant Name	MERITOR INC
Entity Central Index Key	0001113256
Current Fiscal Year End Date	--09-30
Entity Filer Category	Large Accelerated Filer
Trading Symbol	mtor
Entity Common Stock, Shares Outstanding		94,620,102
Document Period End Date	Sep. 30, 2011
Document Type	10-K
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2011
Amendment Flag	false
Entity Well-Known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 1,542,572,181

CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Sales	$ 4,622	$ 3,530	$ 3,020
Cost of sales	(4,146)	(3,105)	(2,717)
GROSS MARGIN	476	425	303
Selling, general and administrative	(278)	(281)	(202)
Restructuring costs	(22)	(6)	(60)
Asset impairment charges	0	0	(14)
Other operating expense, net	(2)	(6)	(1)
OPERATING INCOME	174	132	26
Other income, net	10	2	0
Equity in earnings of affiliates	70	48	15
Interest expense, net	(95)	(106)	(93)
INCOME (LOSS) BEFORE INCOME TAXES	159	76	(52)
Provision for income taxes	(77)	(48)	(668)
INCOME (LOSS) FROM CONTINUING OPERATIONS	82	28	(720)
LOSS FROM DISCONTINUED OPERATIONS, net of tax	(2)	(2)	(456)
NET INCOME (LOSS)	80	26	(1,176)
Less: Net income attributable to noncontrolling interests	(17)	(14)	(12)
NET INCOME (LOSS) ATTRIBUTABLE TO MERITOR, INC.	63	12	(1,188)
NET INCOME (LOSS) ATTRIBUTABLE TO MERITOR, INC.
Net income (loss) from continuing operations	65	14	(729)
Loss from discontinued operations	(2)	(2)	(459)
Net income (loss)	$ 63	$ 12	$ (1,188)
BASIC EARNINGS (LOSS) PER SHARE
Continuing operations (in dollars per share)	$ 0.69	$ 0.16	$ (10.05)
Discontinued operations (in dollars per share)	(0.02)	(0.02)	(6.34)
Basic earnings (loss) per share (in dollars per share)	0.67	0.14	(16.39)
DILUTED EARNINGS (LOSS) PER SHARE
Continuing operations (in dollars per share)	0.67	0.16	(10.05)
Discontinued operations (in dollars per share)	(0.02)	(0.02)	(6.34)
Diluted earnings (loss) per share (in dollars per share)	$ 0.65	$ 0.14	$ (16.39)
Basic average common shares outstanding (in shares)	94.1	84.7	72.5
Diluted average common shares outstanding (in shares)	96.9	87.6	72.5

CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions	Sep. 30, 2011	Sep. 30, 2010
ASSETS
Cash and cash equivalents	$ 217	$ 343
Receivables, trade and other, net	712	579
Inventories	460	382
Other current assets	66	76
Assets of discontinued operations	4	341
TOTAL CURRENT ASSETS	1,459	1,721
NET PROPERTY	421	389
GOODWILL	431	432
OTHER ASSETS	352	337
TOTAL ASSETS	2,663	2,879
LIABILITIES AND EQUITY (DEFICIT)
Short-term debt	84	0
Accounts payable	841	670
Other current liabilities	327	358
Liabilities of discontinued operations	1	362
TOTAL CURRENT LIABILITIES	1,253	1,390
LONG-TERM DEBT	950	1,029
RETIREMENT BENEFITS	1,096	1,162
OTHER LIABILITIES	325	321
EQUITY (DEFICIT):
Common stock (September 30, 2011 and 2010, 94.6 and 94.1 shares issued and outstanding, respectively)	94	92
Additional paid-in capital	897	886
Accumulated deficit	(1,157)	(1,220)
Accumulated other comprehensive loss	(829)	(812)
Total deficit attributable to Meritor, Inc.	(995)	(1,054)
Noncontrolling interest	34	31
TOTAL DEFICIT	(961)	(1,023)
TOTAL LIABILITIES AND DEFICIT	$ 2,663	$ 2,879

CONSOLIDATED BALANCE SHEET [Parenthetical] - shares shares in Millions	Sep. 30, 2011	Sep. 30, 2010
Balance Sheet Paranthetical [Abstract]
Common stock, shares issued	94.6	94.1
Common stock, shares outstanding	94.6	94.1

CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
OPERATING ACTIVITIES
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES (see Note 25)	$ 41	$ 211	$ (295)
INVESTING ACTIVITIES
Capital expenditures	(105)	(55)	(82)
Other investing cash flows	2	5	9
Net investing cash flows used for continuing operations	(103)	(51)	(73)
Net investing cash flows provided by (used for) discontinued operations	(69)	(14)	87
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES	(172)	(64)	14
FINANCING ACTIVITIES
Payments on prior accounts receivable securitization program	0	0	(111)
Borrowings (payments) on new accounts receivable securitization program	0	(83)	83
Borrowings (payments) on revolving credit facility, net	0	(28)	28
Proceeds from debt issuance	0	245	0
Repayment of notes and term loan	0	(193)	(83)
Borrowings (payments) on lines of credit and other		5	(14)
Net change in debt	0	(54)	(97)
Proceeds from stock issuance	0	209	0
Debt and stock issuance and debt extinguishment costs	0	(45)	0
Other financing cash flows	6	(1)	(8)
Net financing cash flows provided by (used for) continuing operations	6	109	(105)
Net financing cash flows used for discontinued operations	0	(12)	(1)
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES	6	97	(106)
EFFECT OF CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS	(1)	4	(15)
CHANGE IN CASH AND CASH EQUIVALENTS	(126)	248	(402)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	343	95	497
CASH AND CASH EQUIVALENTS AT END OF YEAR	$ 217	$ 343	$ 95

CONSOLIDATED STATEMENT OF EQUITY (DEFICIT) - USD ($) $ in Millions	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Loss [Member]	Total Deficit Attributable To Meritor, Inc. [Member]	Noncontrolling Interest [Member]	Total
Beginning balance at Sep. 30, 2008	$ 72	$ 692	$ (16)	$ (3)	$ (225)	$ 520	$ 75	$ 595
Net income (loss)	0	0	(1,188)	0	0	(1,188)	12	(1,176)
Foreign currency translation adjustments	0	0	0	0	(63)	(63)	0	(63)
Employee benefit adjustments (net of tax of $2)	0	0	0	0	(465)	(465)	0	(465)
Adjustment upon adoption of retirement benefits guidance, net of tax	0	0	0	0	9	9	0	9
Unrealized gains (losses), net	0	0	0	0	10	10	0	10
Other	0	0	0	0	0	0	(21)	(21)
Adjustment upon adoption of retirement benefits guidance, net of tax	0	0	(20)	0	0	(20)	0	(20)
Comprehensive Income (loss)						(1,697)	12	(1,685)
Equity based compensation expense	0	10	0	0	0	10	0	10
Non-controlling interest dividends	0	0	0	0	0	0	(19)	(19)
Issuance of restricted stock	0	(3)	0	3	0	0	0	0
Cash dividend (per share $0.10)	0	0	(8)	0		(8)	0	(8)
Divestitures	0	0	0	0			(18)	(18)
Ending Balance at Sep. 30, 2009	72	699	(1,232)	0	(734)	(1,195)	29	(1,166)
Net income (loss)	0	0	12	0	0	12	14	26
Foreign currency translation adjustments	0	0	0	0	44	44	0	44
Impact of sale of business	0	0	0	0	31	31	0	31
Employee benefit adjustments (net of tax of $2)	0	0	0	0	(157)	(157)	0	(157)
Other	0	0	0	0	4	4	0	4
Comprehensive Income (loss)						(66)	14	(52)
Issuance of common stock	20	180	0	0	0	200	0	200
Equity based compensation expense	0	7	0	0	0	7	0	7
Non-controlling interest dividends	0	0	0	0	0	0	(12)	(12)
Ending Balance at Sep. 30, 2010	92	886	(1,220)	0	(812)	(1,054)	31	(1,023)
Net income (loss)	0	0	63	0	0	63	17	80
Foreign currency translation adjustments	0	0	0	0	(7)	(7)	0	(7)
Impact of sale of business	0	0	0	0	(53)	(53)	0	(53)
Employee benefit adjustments (net of tax of $2)	0	0	0	0	44	44	0	44
Other	0	0	0	0	(1)	(1)	0	(1)
Comprehensive Income (loss)						46	17	63
Equity based compensation expense	0	7	0	0	0	7	0	7
Exercise of stock options	2	4	0	0	0	6	0	6
Non-controlling interest dividends	0	0	0	0	0	0	(14)	(14)
Ending Balance at Sep. 30, 2011	$ 94	$ 897	$ (1,157)	$ 0	$ (829)	$ (995)	$ 34	$ (961)

CONSOLIDATED STATEMENT OF EQUITY (DEFICIT) [Parenthetical] - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Employee benefit related adjustment, tax portion	$ 2	$ 2	$ 2
Cash dividend , per share (in dollars per share)			$ 0.10

BASIS OF PRESENTATION	12 Months Ended
BASIS OF PRESENTATION	Sep. 30, 2011
Organization, Consolidation and Presentation Of Financial Statements [Abstract]
Organization, Consolidation and Presentation Of Financial Statements Disclosure [Text Block]	1. BASIS OF PRESENTATION Meritor, Inc. (the "company" or "Meritor"), headquartered in Troy, Michigan, is a premier global supplier of a broad range of integrated systems, modules and components to original equipment manufacturers (“OEMs”) and the aftermarket for the commercial vehicle, transportation and industrial sectors. The company serves commercial truck, trailer, off-highway, military, bus and coach and other industrial OEMs and certain aftermarkets. The consolidated financial statements are those of the company and its consolidated subsidiaries. Certain businesses are reported in discontinued operations in the consolidated statement of operations, statement of cash flows and related notes for all periods presented. Additional information regarding discontinued operations is discussed in Note 3. The company’s fiscal year ends on the Sunday nearest September 30. The 2011, 2010 and 2009 fiscal years ended on October 2, 2011, October 3, 2010, and September 27, 2009. All year and quarter references relate to the company’s fiscal year and fiscal quarters, unless otherwise stated. For ease of presentation, September 30 is used consistently throughout this report to represent the fiscal year end. The company has evaluated subsequent events through the date that the consolidated financial statements were issued.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 2-6
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Name Statement of Position (SOP)
-Publisher AICPA
-Number 94-6
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Number 46R
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+ Details

SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Sep. 30, 2011

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

2. SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (U.S.) (GAAP) requires the use of estimates and assumptions related to the reporting of assets, liabilities, revenues, expenses and related disclosures. Actual results could differ from these estimates. Significant estimates and assumptions were used to value goodwill and other long-lived assets, including impairment charges (see Notes 3, 4 and 10), costs associated with the company’s restructuring actions (see Note 5), product warranty liabilities (see Note 13), long-term incentive compensation plan obligations (see Note 18), retiree medical and pension obligations (see Notes 19 and 20), income taxes (see Note 21), and contingencies including asbestos and environmental matters (see Note 22).

Consolidation and Joint Ventures

The consolidated financial statements include the accounts of the company and those subsidiaries in which the company has control. All intercompany balances and transactions are eliminated in consolidation. The results of operations of controlled subsidiaries are included in the consolidated financial statements and are offset by a related noncontrolling interest recorded for the noncontrolling partners’ ownership. Investments in affiliates that are not controlled or majority-owned are reported using the equity method of accounting (see Note 12).

Foreign Currency

Local currencies are generally considered the functional currencies for operations outside the U.S. For operations reporting in local currencies, assets and liabilities are translated at year-end exchange rates with cumulative currency translation adjustments included as a component of Accumulated Other Comprehensive Loss in the consolidated balance sheet. Income and expense items are translated at average rates of exchange during the year.

Impairment of Long-Lived Assets

Long-lived assets, excluding goodwill, to be held and used are reviewed for impairment whenever adverse events or changes in circumstances indicate a possible impairment. An impairment loss is recognized when a long-lived asset’s carrying value exceeds the fair value. If business conditions or other factors cause the operating results and cash flows to decline, the company may be required to record impairment charges at that time (see Note 10).

Long-lived assets held for sale are recorded at the lower of their carrying amount or estimated fair value less cost to sell.

Discontinued Operations

A business component that either has been disposed of or is classified as held for sale is reported as discontinued operations if the cash flows of the component have been or will be eliminated from the ongoing operations of the company and the company will no longer have any significant continuing involvement in the business component. The results of discontinued operations are aggregated and presented separately in the consolidated statement of operations and consolidated statement of cash flows. Assets and liabilities of the disposal group, are aggregated and reported separately as assets and liabilities of discontinued operations in the consolidated balance sheet (see Note 3).

Revenue Recognition

Revenues are recognized upon shipment of product and transfer of ownership to the customer. Provisions for customer sales allowances and incentives are recorded as a reduction of sales at the time of product shipment.

Allowance for Doubtful Accounts

An allowance for uncollectible trade receivables is recorded when accounts are deemed uncollectible based on consideration of write-off history, aging analysis, and any specific, known troubled accounts.

Earnings per Share

Basic earnings (loss) per share is calculated using the weighted average number of shares outstanding during each year. The diluted earnings (loss) per share calculation includes the impact of dilutive common stock options, restricted stock, and convertible securities, if applicable.

A reconciliation of basic average common shares outstanding to diluted average common shares outstanding is as follows (in millions):

	Year Ended September 30,
	2011	2010	2009
Basic average common shares outstanding	94.1	84.7	72.5
Impact of stock options	0.1	—	—
Impact of restricted shares and share units	2.7	2.9	—
Diluted average common shares outstanding	96.9	87.6	72.5

At September 30, 2011 and 2010, options to purchase 0.5 million and 1.4 million shares of common stock, respectively, were not included in the computation of diluted earnings per share because their exercise price exceeded the average market price for the twelve month period and thus their inclusion would be anti-dilutive. The potential effects of restricted stock and stock options were excluded from the diluted earnings per share calculation for the fiscal year ended September 30, 2009 because their inclusion in a net loss period would reduce the net loss per share. Therefore, at September 30, 2009, options to purchase 1.7 million shares of common stock and 1.3 million shares of restricted stock were excluded from the computation of diluted earnings per share. The company’s convertible senior unsecured notes are excluded from the computation of diluted earnings per share for each period presented, as the company’s average stock price during each period is less than the conversion price.

Other

Other significant accounting policies are included in the related notes, specifically, inventories (Note 8), property and depreciation (Note 10), capitalized software (Note 11), product warranties (Note 13), financial instruments (Note 16), equity based compensation (Note 18), retirement medical plans (Note 19), retirement pension plans (Note 20), income taxes (Note 21) and environmental and asbestos-related liabilities (Note 22).

New accounting standards to be implemented

In September 2011, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (ASU) No. 2011-08: Testing Goodwill for Impairment. Under the revised guidance, entities testing for goodwill impairment have an option of performing a qualitative assessment before calculating the fair value for the reporting unit, i.e., Step 1 of the goodwill impairment test. If an entity determines, on a basis of qualitative factors, that the fair value of the reporting unit is more-likely-than-not less than the carrying amount, the first step of the two-step impairment test would be required. If it is not more-likely-than-not that the fair value of the reporting unit is less than the carrying value, then goodwill is not considered to be impaired. ASU No. 2011-08 does not change how goodwill is calculated or assigned to reporting units, nor does it revise the requirement to test goodwill at least annually for impairment. This ASU is effective for interim and annual periods beginning after December 15, 2011 with early adoption permitted. The company has not adopted ASU No. 2011-08 as of September 30, 2011 and does not believe the adoption will have a significant effect on the goodwill impairment assessments in the future.

In June 2011, the the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. The new guidance allows an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements. The guidance eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. While the new guidance changes the presentation of comprehensive income, there are no changes to the components that are recognized in net income or other comprehensive income under current accounting guidance. This new guidance is effective for fiscal years and interim periods beginning after December 15, 2011. The company does not believe the adoption of the new guidance will have a significant impact on the company’s consolidated financial statements.

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS). This ASU is intended to result in convergence between U.S. GAAP and IFRS requirements for measurement of and disclosures about fair value. The guidance amends current fair value measurement and disclosure guidance to include increased transparency around valuation inputs and investment categorization. This new guidance is effective for fiscal years and interim periods beginning after December 15, 2011. The company is currently evaluating the potential impact of this new guidance on its consolidated financial statements.

Accounting standards implemented in fiscal year 2011

In June 2009, the FASB issued guidance on accounting for transfer of financial assets, which changes the requirements for recognizing the transfer of financial assets and requires additional disclosures about a transferor’s continuing involvement in transferred financial assets. The guidance also eliminates the concept of a qualifying special purpose entity when assessing transfers of financial instruments. As required, the company adopted this guidance effective October 1, 2010. The adoption of this guidance did not have any impact on the company’s consolidated financial statements.

In June 2009, the FASB issued guidance for the consolidation of variable interest entities (VIEs) to address the elimination of the concept of a qualifying special purpose entity. This guidance replaces the quantitative-based risks and rewards calculation for determining which enterprise has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of the variable interest entity, and the obligation to absorb losses of the entity or the right to receive benefits from the entity. Additionally, the new guidance requires any enterprise that holds a variable interest in a variable interest entity to provide enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise’s involvement in a variable interest entity. As required, the company adopted this guidance effective October 1, 2010. The adoption of this guidance did not have any impact on the company’s consolidated financial statements other than additional disclosures as noted below.

The company holds a variable interest in a joint venture accounted for under the equity method of accounting. The joint venture manufactures components for commercial vehicle applications primarily on behalf of the company. The variable interest relates to a supply arrangement between the company and the joint venture whereby the company supplies certain components to the joint venture at a cost-plus basis. The company is not the primary beneficiary of the joint venture, as the joint venture partner has shared or absolute control over key manufacturing operations, labor relationships, financing activities and certain other functions of the joint venture. Therefore, the company does not consolidate the joint venture. At September 30, 2011, the company’s investment in the joint venture was $32 million, classified as Other Assets in the condensed consolidated balance sheet (see Note 11), representing the company’s maximum exposure to loss.

DISCONTINUED OPERATIONS

12 Months Ended

Sep. 30, 2011

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

3. DISCONTINUED OPERATIONS

Results of the discontinued operations are summarized as follows (in millions):

	Year Ended September 30,
	2011			2010			2009
Sales	$	368		$	1,353		$	1,597

Operating income (loss), net	$	11		$	27		$	(81	)
Net gain (loss) on sales of businesses		19			5			(10	)
Goodwill and long-lived asset impairment charges		—			(2	)		(265	)
Charge for indemnity obligation		(4	)		—			(28	)
Restructuring costs		(9	)		(6	)		(41	)
LVS Divestiture costs		(1	)		(9	)		(9	)
Other		(15	)		(15	)		1
Income (loss) before income taxes		1			—			(433	)
Provision for income taxes		(3	)		(2	)		(23	)
Net loss	$	(2	)	$	(2	)	$	(456	)
Net income attributable to noncontrolling interests		—			—			(3	)
Loss from discontinued operations attributable to Meritor, Inc.	$	(2	)	$	(2	)	$	(459	)

In conjunction with the company’s long-term strategic objective to focus on supplying the commercial vehicle on- and off-highway markets for original equipment manufacturers, aftermarket and industrial customers, the company previously announced its intent to divest its Light Vehicle Systems (LVS) businesses. After completion of the sale of the Body Systems and Gabriel Europe businesses in the second quarter of fiscal year 2011, as discussed in more detail below, the company has substantially completed its transformation. The remaining non-core business consists of a small damper business located in Leicester, England, which had sales of $9 million in fiscal year 2011. In November 2011, the company entered into an agreement with a buyer to sell this business. The company expects to close the sale transaction before the end of calendar year 2011. In the second quarter of fiscal year 2011, the company announced the planned closure of its European trailer (EU Trailer) business, which was completed during the fourth quarter of fiscal year 2011. Results of the company’s LVS and EU Trailer businesses are reflected in discontinued operations for all periods presented.

Completed Divestitures

EU Trailer

In the second quarter of fiscal year 2011, the company announced the planned closure of its EU Trailer business which was part of the company’s Aftermarket & Trailer segment. All manufacturing operations and use of productive assets ceased prior to September 30, 2011. The company sold certain long-lived and current assets of the business to a third party and recognized a loss of approximately $2 million during the fourth quarter of fiscal year 2011 in connection with the sale. In addition, the company recognized $8 million of restructuring charges associated with the closure of EU Trailer in fiscal year 2011. These charges are included in loss from discontinued operations in the accompanying consolidated statement of operations. Total sales from this business were $59 million, $64 million and $56 million in fiscal years 2011, 2010 and 2009, respectively.

Gabriel Europe

On February 6, 2011, the company sold its Gabriel Europe (Bonneval) facility to TRW Automotive Holdings France. Gabriel Europe manufactured ride control parts (shock absorbers) for sale in Europe. In connection with the sale, the company made a cash capital contribution of $15 million to Gabriel Europe prior to the completion of the sale transaction. This capital contribution is included in net investing cash flows used for discontinued operations in the accompanying consolidated statement of cash flows. In connection with the sale of Gabriel Europe business, the company recognized a pre-tax loss of $13 million ($13 million after tax) in the second quarter of fiscal year 2011.

Body Systems

On January 3, 2011, the company completed the sale of its Body Systems business to Inteva Products Holding Coöperatieve U.A., an assignee of 81 Acquisition LLC and an affiliate of Inteva Products, LLC. Pursuant to the sale agreement signed in August 2010, total consideration was approximately $35 million, subject to certain potential adjustments for items such as working capital fluctuations. The actual purchase price at the closing was $27 million (excluding estimated closing expenses for outside advisory fees of $12 million), consisting of $12 million in cash at closing (adjusted for estimated balances in working capital and other items at the time of the closing) and a five-year, 8-percent promissory note for $15 million, payable in five annual installments beginning in January 2012. The current portion of the promissory note is included in receivables, trade and other, net in the accompanying consolidated balance sheet. The long-term portion of the note is included in other assets in the accompanying consolidated balance sheet.

In addition to the purchase price, the company expects to receive the cash held at the time of the sale by the Body Systems entities operating in China and Brazil of approximately $33 million, before applicable taxes and other withholding, at such time as it becomes available for distribution, as provided in the sale agreement. At September 30, 2011, the company has recognized a receivable of approximately $28 million, net of applicable taxes and other withholding, for cash balances available for distribution based on the current distribution capacity. The company expects to recognize a receivable for the remaining amount of approximately $3 million, before applicable taxes and other withholding, at such time when the balance becomes available for distribution by the respective entities. The receivable recognized at September 30, 2011 is included in receivables, trade and other, net in the accompanying consolidated balance sheet. Cash outflows as a result of the sale of Body Systems are included in net investing cash flows used for discontinued operations in the accompanying consolidated statement of cash flows.

In connection with the sale of Body Systems business, the company recognized a pre-tax gain of $32 million ($32 million after tax) in the second quarter of fiscal year 2011. Upon sale of the Body Systems business, net accumulated foreign currency translation gains of $62 million were recognized into income and included in the gain on sale of this business. These net accumulated foreign currency translation gains were previously deferred and included in accumulated other comprehensive loss in the condensed consolidated statement of equity (deficit).

The sale agreement contains certain customary representations, warranties and covenants of the seller and the purchaser as further set forth in the agreement. The agreement also includes provisions governing post-closing indemnities between the seller and the purchaser for losses arising from specified events. At September 30, 2011, the company recognized estimates for such indemnities, primarily related to income tax matters, of $5 million. This amount is included in other liabilities in the accompanying consolidated balance sheet.

Meritor Suspension Systems Company (MSSC)

On June 24, 2009, the company entered into a binding letter of intent to sell its 57 percent interest in MSSC, a joint venture that manufactured and supplied automotive coil springs, torsion bars and stabilizer bars in North America, to the joint venture partner, a subsidiary of Mitsubishi Steel Mfg. Co., LTD (MSM). The sale transaction closed in October 2009. The purchase price was $13 million, which included a cash dividend of $12 million received by the company in June 2009. The remaining purchase price was received by the company at the time of closing. In connection with the sale of its interest in MSSC, the company provided certain indemnifications to the buyer for its share of potential obligations related to taxes, pension funding shortfall, environmental and other contingencies, and valuation of certain accounts receivable and inventories. The company’s estimated exposure under these indemnities at September 30, 2011 is approximately $15 million and is included in other liabilities in the consolidated balance sheet.

Wheels

In September 2009, the company completed the sale of its Wheels business to Iochpe-Maxion S.A., a Brazilian producer of wheels and frames for commercial vehicles, railway freight cars and castings, and affiliates. The gross purchase price was $180 million. Net proceeds after taxes and adjustments for working capital and net debt were $167 million (net of cash on hand of $3 million). The cash proceeds from the sale of wheels business are included in net investing cash flows used for discontinued operations in the accompanying consolidated statement of cash flows.

Gabriel Ride Control Products North America

The company’s Gabriel Ride Control Products North America (Gabriel Ride Control) business supplied motion control products, shock absorbers, struts, ministruts and corner modules, as well as other automotive parts to the passenger car, light truck and sport utility vehicle aftermarket industries. In June 2009, the company completed the sale of Gabriel Ride Control to Ride Control, LLC, a wholly owned subsidiary of OpenGate Capital, a private equity firm.

Gabriel de Venezuela

The company’s former consolidated subsidiary, Gabriel de Venezuela, supplied shock absorbers, struts, exhaust systems and suspension modules to light vehicle industry customers, primarily in Venezuela and Colombia. On June 5, 2009, the company sold its 51 percent interest in Gabriel de Venezuela to its joint venture partner. The company was also released from its obligations of approximately $11 million under letters of credit.

Emissions Technologies

The company’s Emissions Technologies (ET) business supplied exhaust systems and exhaust system components, including mufflers, exhaust pipes, catalytic converters, diesel particulate filters and exhaust manifolds, primarily to original equipment manufacturers. On May 17, 2007, the company sold its ET business to EMCON Technologies Holdings Limited (EMCON), a private equity affiliate of J.P. Morgan Securities Inc. Total consideration was $310 million, including cash, a $20 million note and the assumption of certain liabilities, and adjustments for working capital and other items. Proceeds from the $20 million note receivable were received during fiscal year 2010, along with accrued interest thereon.

The following summarizes significant items included in income (loss) from discontinued operations in the consolidated statement of operations for the fiscal years ended September 30, 2011, 2010 and 2009:

Operating income (loss), net from discontinued operations represents income (loss) from normal operating activities of businesses included in discontinued operations.

Net gain (loss) on sale of business: During the second quarter of fiscal year 2011, the company recognized a pre-tax gain of $32 million ($32 million after tax) on the sale of its Body Systems business and a pre-tax loss of $13 million ($13 million after tax) on the sale of its Gabriel Europe business.

In connection with the sale of the company’s interest in MSSC, the company recognized a pre-tax gain on sale of $16 million ($16 million after tax), net of estimated indemnity obligations as described above during fiscal year 2010. The company recognized $3 million of pre-tax losses ($3 million after tax) on the sale of certain other LVS businesses during the fourth quarter of fiscal year 2010. Also included in net gain on sale of businesses for the fiscal year 2010 are $8 million of charges associated with the Gabriel Ride Control working capital adjustments recognized in the first quarter of fiscal year 2010.

In fiscal year 2009, the company sold its Wheels business and recognized a pre-tax gain of $50 million ($36 million after tax) on the sale. The company also sold Gabriel de Venezuela and Gabriel Ride Control in fiscal year 2009 and recognized pre-tax losses of $23 million ($23 million after-tax) and $42 million ($42 million after-tax) on these transactions, respectively. The company also recognized approximately $5 million of pre-tax income in fiscal year 2009, primarily associated with the fiscal year 2007 sale of its Emissions Technologies (ET) business, including adjustments related to changes in estimates for certain assets and liabilities.

Goodwill and long-lived asset impairment charges: During fiscal year 2010, the company recognized $2 million of long-lived asset impairment charges in its EU Trailer business. In the first quarter of fiscal year 2009, the company recognized $265 million ($253 million after-tax) of non-cash impairment charges associated with goodwill and certain long-lived assets of businesses included in discontinued operations (see Notes 4 and 10).

Charge for indemnity obligations: In December 2005, the company guaranteed a third party’s obligation to reimburse another party for payment of health and prescription drug benefits to a group of retired employees. The retirees were former employees of a wholly-owned subsidiary of the company prior to it being acquired by the company. The wholly-owned subsidiary, which was part of the company’s light vehicle aftermarket business, was sold by the company in fiscal year 2006. Prior to May 2009, except as set forth hereinafter, the third party met its obligations to reimburse the other party. In May 2009, the third party filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code requiring the company to recognize its obligations under the guarantee. The company recorded a $28 million liability in the third quarter of fiscal year 2009, of which approximately $6 million were related to claims not reimbursed by the third party prior to its filing for bankruptcy protection, and the remaining $22 million were related to the company’s best estimate of its future obligation under the guarantee. During the second quarter of fiscal year 2011, the company recognized additional charges of $4 million associated with this indemnity based on revised demographic data for the retiree population covered by the benefits. At September 30, 2011 and 2010, the remaining estimated liability for this matter was approximately $23 million and $21 million, respectively.

Restructuring costs: In fiscal year 2011, the company recognized $8 million of restructuring charges associated with the closure of its EU Trailer business. The remaining restructuring charges in fiscal year 2011 were related to employee severance costs at its Gabriel Europe business prior to the sale in the second quarter. Restructuring costs recognized in fiscal year 2010 relate to charges associated with actions in the company’s Body Systems business and other charges in the remaining chassis businesses.

In the second quarter of fiscal year 2009, the company announced the closure of its coil spring operations in Milton, Ontario, Canada (Milton), which was part of MSSC. In connection with the then planned closure, the company recognized approximately $16 million of employee severance and pension termination benefits. The remaining restructuring costs recognized during fiscal year 2009 were associated with the company’s Performance Plus program and its Fiscal Year 2009 Actions for reductions in workforce in its LVS businesses (see Note 5).

LVS divestiture costs are related to actions in connection with the separation of the LVS businesses from the company, and include third-party costs associated with divestiture activities and costs associated with the previously planned spin-off of the LVS business.

Other: During the fourth quarter of fiscal year 2011, the company recognized $2 million of losses associated with the sale of certain assets in connection with the closure of our EU Trailer business. The company also recognized $4 million of costs associated with the sale of Body Systems business to the sale of this business during the second quarter of fiscal year 2011. The remaining charges primarily relate to changes in estimates and adjustments related to certain assets and liabilities retained from previously sold businesses and indemnities provided at the time of sale.

- Definition

The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 144
-Paragraph 43-48
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6391110&loc=d3e2941-110230

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1361-107760

Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1510-107760

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 45
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1020-107759

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 45
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1012-107759

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 45
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e957-107759

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1474-107760

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-SubTopic 10
-Section 45
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6390789&loc=d3e2443-110228

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1436-107760

+ Details

GOODWILL

12 Months Ended

Sep. 30, 2011

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill Disclosure [Text Block]

4. GOODWILL

In accordance with FASB Accounting Standards Codification (ASC) Topic 350-20, “Intangibles – Goodwill and Other”, goodwill is reviewed for impairment annually during the fourth quarter of the fiscal year or more frequently if certain indicators arise. If business conditions or other factors cause the operating results and cash flows of a reporting unit to decline, the company may be required to record impairment charges for goodwill at that time. The goodwill impairment review is a two-step process. Step one consists of a comparison of the fair value of a reporting unit with its carrying amount. An impairment loss may be recognized if the review indicates that the carrying value of a reporting unit exceeds its fair value. Estimates of fair value are primarily determined by using discounted cash flows and market multiples on earnings. If the carrying amount of a reporting unit exceeds its fair value, step two requires the fair value of the reporting unit to be allocated to the underlying assets and liabilities of that reporting unit, resulting in an implied fair value of goodwill. If the carrying amount of the goodwill of the reporting unit exceeds the implied fair value, an impairment charge is recorded equal to the excess.

The impairment review is highly judgmental and involves the use of significant estimates and assumptions. These estimates and assumptions have a significant impact on the amount of any impairment charge recorded. Discounted cash flow methods are dependent upon assumptions of future sales trends, market conditions and cash flows of each reporting unit over several years. Actual cash flows in the future may differ significantly from those previously forecasted. Other significant assumptions include growth rates and the discount rate applicable to future cash flows.

For fiscal years 2011 and 2010, the fair value of the company’s reporting units exceeded their carrying values. During the first quarter of fiscal year 2009, both light and commercial vehicle industries experienced significant declines in overall economic conditions including tightening credit markets, stock market declines and significant reductions in current and forecasted production volumes for light and commercial vehicles. This, along with other factors, led to a significant decline in the company’s market capitalization subsequent to September 30, 2008. As a result, the company completed an impairment review of goodwill balances during the first quarter of fiscal year 2009 for each of its reporting units, which were Commercial Vehicle Systems (CVS) and LVS, at that time.

Step one of the company’s fiscal year 2009 first quarter goodwill impairment review indicated that the carrying value of the LVS reporting unit significantly exceeded its estimated fair value. As a result of the step two goodwill impairment analysis, the company recorded a $70 million non-cash impairment charge in the first quarter of fiscal year 2009 to write-off the entire goodwill balance of its LVS reporting unit. This charge is included in loss from discontinued operations in the consolidated statement of operations. The fair value of this reporting unit was estimated using earnings multiples and other available information, including indicated values from the then recent attempts to divest certain businesses.

A summary of the changes in the carrying value of goodwill is presented below (in millions):

	Commercial					Aftermarket
	Truck			Industrial		& Trailer			Total
Balance at September 30, 2009	$	154		$	109	$	175		$	438
Foreign currency translation		(3	)		—		(3	)		(6	)
Balance at September 30, 2010		151			109		172			432
Foreign currency translation		(1	)		—		—			(1	)
Balance at September 30, 2011	$	150		$	109	$	172		$	431

RESTRUCTURING COSTS

12 Months Ended

Sep. 30, 2011

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

5. RESTRUCTURING COSTS

At September 30, 2011 and 2010, $19 million and $11 million, respectively, of restructuring reserves primarily related to unpaid employee termination benefits remained in the consolidated balance sheet. Asset impairment charges relate to manufacturing facilities that will be closed or sold and machinery and equipment that became idle and obsolete as a result of these actions.

The following table summarizes changes in restructuring reserves (in millions).

	Employee						Plant
	Termination			Asset			Shutdown
	Benefits			Impairment			& Other			Total
Balance at September 30, 2008	$	30		$	—		$	—		$	30
Activity during the period:
Charges to continuing operations		39			4			17			60
Charges to discontinued operations, net of reversals of $3(1)		31			2			8			41
Asset write-offs		—			(6	)		—			(6	)
Retirement plan curtailment charges (see Note 20) (3)		—			—			(24	)		(24	)
Reclassifications to liabilities of discontinued operations		(8	)		—			—			(8	)
Cash payments – continuing operations		(26	)		—			(1	)		(27	)
Other (2)		(38	)		—			—			(38	)
Balance at September 30, 2009		28			—			—			28
Activity during the period:
Charges to continuing operations, net of reversals of $1		3			2			1			6
Charges to discontinued operations, net of reversals of $3(1)		6			—			—			6
Asset write-offs		—			(2	)		—			(2	)
Reclassifications to liabilities of discontinued operations		(6	)		—			—			(6	)
Cash payments – continuing operations		(13	)		—			(1	)		(14	)
Other (2)		(7	)		—			—			(7	)
Balance at September 30, 2010		11			—			—			11
Activity during the period:
Charges to continuing operations		19			2			1			22
Charges to discontinued operations, net of reversals of $1		7			—			2			9
Asset write-offs		—			(2	)		—			(2	)
Cash payments – continuing operations		(12	)		—			(1	)		(13	)
Other (2)		(6	)		—			(2	)		(8	)
Total restructuring reserves, end of year		19			—			—			19
Less: non-current restructuring reserves		(3	)		—			—			(3	)
Restructuring reserves – current, at September 30, 2011	$	16		$	—		$	—		$	16
____________________

	(1)		Charges to discontinued operations reserves are included in discontinued operations in the consolidated statement of operations.

	(2)		Includes $8 million, $8 million and $38 million of payments associated with restructuring reserves for discontinued operations in fiscal years 2011, 2010 and 2009, respectively.

	(3)		Retirement plan curtailment charges relate to pension termination benefits of $16 million and $8 million associated with the closure of the company’s Commercial Truck brakes plant in Tilbury, Ontario, Canada and Milton, respectively.

Restructuring costs included in the company’s business segment results during fiscal years 2011, 2010 and 2009 are as follows (in millions):

	Commercial
	Truck		Industrial		Total(1)
Fiscal year 2011:
Performance Plus actions	$	16	$	—	$	16

Fiscal year 2010:
Performance Plus actions	$	5	$	—	$	5
Other		—		1		1
Total restructuring costs	$	5	$	1	$	6

Fiscal year 2009:
Performance Plus actions	$	32	$	—	$	32
Fiscal year 2009 actions (reductions in workforce)		20		2		22
Total restructuring costs	$	52	$	2	$	54

____________________
	(1)		Total segment restructuring costs do not include those recorded in unallocated corporate expense, net. These costs were $6 million in each of the fiscal years 2011 and 2009, primarily related to employee termination benefits. There were no corporate restructuring costs in fiscal year 2010. The company’s Aftermarket & Trailer segment had no restructuring costs in fiscal years 2011, 2010 and 2009.

Performance Plus: During fiscal year 2007, the company launched a long-term profit improvement and cost reduction initiative called “Performance Plus.” As part of this program, the company identified significant restructuring actions which would eliminate up to 2,800 positions in North America and Europe and consolidate and combine certain global facilities. The company’s continuing operations recognized restructuring costs in its Commercial Truck segment of $16 million, $5 million and $32 million in fiscal years 2011, 2010 and 2009, respectively, related to Performance Plus. The 2011 and 2010 costs were related to the rationalization of one manufacturing facility in Europe and primarily consist of employee headcount reductions and asset write-downs. The company is currently in negotiations to transfer its manufacturing facility located in St. Priest, France to one of its customers. The transaction involves the transfer of employees as well as the sale of the land and building and certain machinery and equipment. Based on the current status of the negotiations, it is possible the company may recognize a loss upon completion of this transaction.

During fiscal year 2009, the company closed its Commercial Truck brakes plant in Tilbury, Ontario, Canada (Tilbury) and recognized restructuring costs of approximately $30 million associated with this closure for estimated employee severance benefits, pension termination benefits under the terms of the Tilbury retirement plans and certain asset impairment charges. Also in fiscal year 2009, the company announced the closure of its Commercial Truck facility in Carrollton, Kentucky (Carrollton) and recognized approximately $2 million of restructuring costs. The company completed this closure during the fiscal year 2010.

Cumulative restructuring costs recorded for this program as of September 30, 2011 are $162 million, including $93 million reported in discontinued operations in the consolidated statement of operations. These costs primarily relate to employee severance and related costs of $114 million, asset impairment charges of $22 million and $26 million primarily associated with pension termination benefits. The company’s Commercial Truck segment has recognized cumulative restructuring costs associated with Performance Plus of $58 million. Cumulative restructuring costs of $11 million were recognized by corporate locations and the company’s Aftermarket & Trailer segment. Majority of the restructuring actions associated with Performance Plus were complete as of September 30, 2011, with remaining costs of approximately $7 million expected to be incurred in fiscal year 2012 in the company’s Commercial Truck segment.

Fiscal Year 2009 Actions: During fiscal year 2009, the company approved certain restructuring actions in response to a significant decline in global market conditions. These actions primarily related to the reduction of approximately 2,850 salaried, hourly and temporary positions worldwide (including discontinued operations). The company recorded restructuring costs of $46 million (including $18 million for businesses reported in discontinued operations) associated with these actions during fiscal year 2009. The company’s Fiscal Year 2009 Actions were complete as of September 30, 2010.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

+ References + Details

ACCOUNTS RECEIVABLE FACTORING	12 Months Ended
ACCOUNTS RECEIVABLE FACTORING	Sep. 30, 2011
Accounts Receivable Securitization and Factoring Disclosure [Abstract]
Accounts Receivable Securitization and Factoring [Text Block]	6. ACCOUNTS RECEIVABLE FACTORING Off-balance sheet arrangements Swedish Factoring Facility: In 2006, the company entered into an arrangement to sell trade receivables due from AB Volvo through one of its European subsidiaries. In June 2011, the company renewed this agreement through June 2012. Under this arrangement, the company can sell up to, at any point in time, €150 million of eligible trade receivables. The receivables under this program are sold at face value and are excluded from the consolidated balance sheet. The gross amount of proceeds received from the sale of receivables under this arrangement was $429 million and $336 million for fiscal years 2011 and 2010, respectively. The company had utilized €107 million ($146 million) and €62 million ($84 million) of this accounts receivable factoring facility as of September 30, 2011 and 2010, respectively. The company had notes receivable from the purchaser of the receivables of $2 million and $3 million under this program at September 30, 2011 and 2010, respectively. Under the renewed agreement, the company will not have any notes receivable from the purchaser as the full amount of purchased receivables will be paid at the time of transfer of receivables to the purchaser. French Factoring Facility: In November 2007, the company entered into an arrangement to sell trade receivables through one of its French subsidiaries. Under this arrangement, the company can sell up to, at any point in time, €125 million of eligible trade receivables. The receivables under this program are sold at face value and excluded from the consolidated balance sheet. The company had utilized €47 million ($63 million) and €36 million ($49 million) of this accounts receivable securitization facility as of September 30, 2011 and September 30, 2010, respectively. Both of the above facilities are backed by 364-day liquidity commitments from Nordea Bank which were renewed through June 2012 for both the French and Swedish facilities. The commitments are subject to standard terms and conditions for these types of arrangements (including, in the case of the French commitment, a sole discretion clause whereby the bank retains the right to not purchase receivables, which to the company’s knowledge has never been invoked). U.S. Factoring Facility: In October 2010, the company entered into a two-year arrangement to sell trade receivables from AB Volvo and its subsidiaries. Under this arrangement, the company can sell up to, at any point in time, €60 million ($82 million) of eligible trade receivables. The receivables under this program are sold at face value and are excluded from the consolidated balance sheet. The company had utilized €46 million ($62 million) of this accounts receivable factoring facility as of September 30, 2011. In addition, several of the company’s European subsidiaries factor eligible accounts receivable with financial institutions. Certain receivables are factored without recourse to the company and are excluded from accounts receivable in the consolidated balance sheet. The amount of factored receivables excluded from accounts receivable was $8 million and $5 million at September 30, 2011 and 2010, respectively. Total costs associated with these off-balance sheet arrangements were $10 million, $3 million and $5 million in fiscal years 2011, 2010 and 2009, respectively, and are included in selling, general and administrative expenses in the consolidated statement of operations. On-balance sheet arrangements In September 2009 the company entered into a new, two-year, $125 million U.S. receivables financing arrangement which is provided on a committed basis by a syndicate of financial institutions led by Ally Commercial Finance LLC (formerly GMAC Commercial Finance LLC). In October 2010, the company extended the expiration of the program to October 2013. Under this program, the company has the ability to sell substantially all of the trade receivables of certain U.S. subsidiaries to Meritor Receivables Corporation (ARC), a wholly-owned, special purpose subsidiary. ARC funds these purchases with borrowings under a loan agreement with participating lenders. Amounts outstanding under this agreement are collateralized by eligible receivables purchased by ARC and are reported as short-term debt in the consolidated balance sheet. No amount was outstanding under this program at September 30, 2011 or September 30, 2010. This program does not have specific financial covenants; however, it does have a cross-default provision to the company’s revolving credit facility agreement.

OTHER OPERATING INCOME (EXPENSE), net AND OTHER INCOME (EXPENSE), net	12 Months Ended
	Sep. 30, 2011
Other Income and Expenses [Abstract]
Other Income and Other Expense Disclosure [Text Block]	7. OTHER OPERATING INCOME (EXPENSE), net AND OTHER INCOME (EXPENSE), net Other operating income (expense) for fiscal years 2011, 2010 and 2009 relates to environmental remediation costs incurred by the company (see Note 22). Other income for fiscal year 2011 includes a $5 million non-operating gain on the collection of a note receivable related to a previously divested business and a $5 million non-operating gain on the termination of certain foreign currency option contracts.

INVENTORIES

12 Months Ended

Sep. 30, 2011

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

8. INVENTORIES

Inventories are stated at the lower of cost (using FIFO or average methods) or market (determined on the basis of estimated realizable values) and are summarized as follows (in millions):

	September 30,
	2011		2010
Finished goods	$	183	$	156
Work in process		63		62
Raw materials, parts and supplies		214		164
Total	$	460	$	382

OTHER CURRENT ASSETS

12 Months Ended

Sep. 30, 2011

Other Current Assets Disclosure [Abstract]

Other Current Assets [Text Block]

9. OTHER CURRENT ASSETS

Other current assets are summarized as follows (in millions):

	September 30,
	2011		2010
Current deferred income tax assets (see Note 21)	$	28	$	46
Asbestos-related recoveries (see Note 22)		9		11
Deposits and collateral		11		3
Prepaid and other		18		16
Other current assets	$	66	$	76

NET PROPERTY AND IMPAIRMENTS OF LONG-LIVED ASSETS

12 Months Ended

Sep. 30, 2011

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

10. NET PROPERTY AND IMPAIRMENTS OF LONG-LIVED ASSETS

Property is stated at cost. Depreciation of property is based on estimated useful lives, generally using the straight-line method. Estimated useful lives for buildings and improvements range from 10 to 50 years and estimated useful lives for machinery and equipment range from 3 to 20 years. Significant improvements are capitalized and disposed or replaced property is written off. Maintenance and repairs are charged to expense in the period they are incurred. Company-owned tooling is classified as property and depreciated over the shorter of its expected life or the life of the related vehicle platform, generally not to exceed three years.

In accordance with the FASB guidance on property, plant and equipment, the company reviews the carrying value of long-lived assets, excluding goodwill, to be held and used, for impairment whenever events or changes in circumstances indicate a possible impairment. An impairment loss is recognized when a long-lived asset’s carrying value is not recoverable and exceeds estimated fair value.

At December 31, 2008, management determined certain impairment reviews were required due to declines in overall economic conditions including tightening credit markets, stock market declines and significant reductions in current and forecasted production volumes for light and commercial vehicles. As a result, the company recognized pre-tax, non-cash impairment charges of $209 million in the first quarter of fiscal year 2009, primarily related to the LVS businesses, which are presented in discontinued operations. Accordingly, $195 million of impairment charges are included in loss from discontinued operations in the consolidated statement of operations (see Note 3). The remaining impairment charges were for specific long-lived assets in the company’s Commercial Truck segment ($8 million) and a certain corporate long-lived asset ($6 million). The charges recorded in the company’s Commercial Truck segment were for specific land and buildings and other assets (primarily machinery and equipment) of $5 million and $3 million, respectively. The estimated fair value of long-lived assets was calculated based on probability weighted cash flows taking into account current expectations for asset utilization and life expectancy. In addition, liquidation values were considered where appropriate, as well as indicated values from divestiture activities.

Net property at September 30, 2011 and 2010 is summarized as follows (in millions):

	September 30,
	2011			2010
Property at cost:
Land and land improvements	$	47		$	42
Buildings		264			267
Machinery and equipment		897			909
Company-owned tooling		153			150
Construction in progress		74			40
Total		1,435			1,408
Less accumulated depreciation		(1,014	)		(1,019	)
Net property	$	421		$	389

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References + Details

OTHER ASSETS

12 Months Ended

Sep. 30, 2011

Other Assets, Noncurrent [Abstract]

Other Assets Disclosure [Text Block]

11. OTHER ASSETS

Other assets are summarized as follows (in millions):

	September 30,
	2011		2010
Investments in non-consolidated joint ventures (see Note 12)	$	174	$	164
Asbestos-related recoveries (see Note 22)		67		55
Unamortized debt issuance costs (see Note 15)		25		32
Capitalized software costs, net		23		21
Non-current deferred income tax assets (see Note 21)		12		23
Assets for uncertain tax positions (see Note 21)		5		4
Prepaid pension costs (see Note 20)		9		8
Other		37		30
Other assets	$	352	$	337

In accordance with FASB ASC Topic 350-40, costs relating to internally developed or purchased software in the preliminary project stage and the post-implementation stage are expensed as incurred. Costs in the application development stage that meet the criteria for capitalization are capitalized and amortized using the straight-line basis over the estimated economic useful life of the software.

INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES

12 Months Ended

Sep. 30, 2011

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments Disclosure [Text Block]

12. INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES

The company’s non-consolidated joint ventures and related direct ownership interest at September 30, 2011 are as follows:

Meritor WABCO Vehicle Control Systems (Commercial Truck)	50	%
Master Sistemas Automotivos Limitada (Commercial Truck)	49	%
Suspensys Sistemas Automotivos Ltda. (1) (Aftermarket & Trailer)	24	%
Sistemas Automotrices de Mexico S.A. de C.V. (Commercial Truck)	50	%
Ege Fren Sanayii ve Ticaret A.S. (Commercial Truck)	49	%
Automotive Axles Limited (Industrial)	36	%

____________________

(1)

Total direct and indirect ownership interest of 50 percent.

The company’s investments in non-consolidated joint ventures are as follows (in millions):

	September 30,
	2011		2010
Commercial Truck	$	123	$	117
Industrial		19		17
Aftermarket & Trailer		32		30
Total investments in non-consolidated joint ventures	$	174	$	164

The company’s equity in earnings of non-consolidated joint ventures is as follows (in millions):

	Year Ended September 30,
	2011		2010		2009
Commercial Truck	$	51	$	33	$	8
Industrial		5		3		1
Aftermarket & Trailer		14		12		6
Total equity in earnings of affiliates	$	70	$	48	$	15

The summarized financial information presented below represents the combined accounts of the company’s non-consolidated joint ventures related to its continuing operations (in millions):

			September 30,
			2011		2010
Current assets			$	652	$	542
Non-current assets				273		256
Total assets			$	925	$	798

Current liabilities			$	387	$	258
Non-current liabilities				124		152
Total liabilities			$	511	$	410

	Year Ended September 30,
	2011		2010		2009
Sales	$	1,977	$	1,474	$	868
Gross profit		274		216		111
Net income		177		126		42

Dividends received from the company’s non-consolidated joint ventures were $45 million in fiscal year 2011, $11 million in fiscal year 2010 and $25 million in fiscal year 2009.

The company had sales to its non-consolidated joint ventures of approximately $8 million, $5 million and $10 million in fiscal years 2011, 2010 and 2009, respectively. These sales exclude sales of $182 million, $96 million and $48 million in fiscal years 2011, 2010 and 2009, respectively, to a joint venture in the company’s Commercial Truck segment, which are eliminated as the company purchases these components back after value add provided by the joint venture. The company had purchases from its non-consolidated joint ventures of approximately $1,161 million, $612 million and $493 million in fiscal years 2011, 2010 and 2009, respectively. Additionally, the company leases space and provides certain administrative and technical services to various non-consolidated joint ventures. The company collected $1 million, $1 million and $2 million for such leases and services during fiscal years 2011, 2010 and 2009, respectively.

Amounts due from the company’s non-consolidated joint ventures were $48 million and $19 million at September 30, 2011 and 2010, respectively, and are included in Receivables, trade and other, net in the consolidated balance sheet. Amounts due to the company’s non-consolidated joint ventures were $125 million and $79 million at September 30, 2011 and 2010, respectively and are included in Accounts payable in the consolidated balance sheet.

The fair value of the company’s investment in its Automotive Axles Limited joint venture is approximately $42 million based on quoted market prices as this investment is listed and publicly traded on the Bombay Stock Exchange in India.

- Definition

The entire disclosure for equity investment, or group of investments, for which combined disclosure is appropriate, including: (a) the name of each investee and percentage of ownership of common stock, (b) accounting policies for investments in common stock, (c) difference between the amount at which the investment is carried and the amount of underlying equity in net assets and the accounting treatment of the difference, (d) the total fair value of each identified investment for which a market value is available, (e) summarized information as to assets, liabilities, and results of operations of the investees (for investments in unconsolidated subsidiaries, common stock of joint ventures, or other investments using the equity method), and (f) material effects of possible conversions, exercises, or contingent issuances of the investee. Other disclosures include (a) the names of any investee in which the investor owns 20 percent or more of the voting stock and investment is not accounted for using the equity method, and the reasons why not, and (b) the names of any investee in which the investor owns less than 20 percent of the voting stock and the investment is accounted for using the equity method, and the reasons why it is.

+ References + Details

OTHER CURRENT LIABILITIES

12 Months Ended

Sep. 30, 2011

Other Current Liabilities Disclosure [Abstract]

Other Current Liabilities [Text Block]

13. OTHER CURRENT LIABILITIES

Other current liabilities are summarized as follows (in millions):

	September 30,
	2011		2010
Compensation and benefits	$	148	$	179
Income taxes		23		18
Taxes other than income taxes		38		32
Product warranties		19		28
Restructuring (see Note 5)		16		11
Asbestos-related liabilities (see Note 22)		18		18
Other		65		72
Other current liabilities	$	327	$	358

The company records estimated product warranty costs at the time of shipment of products to customers. Warranty reserves are primarily based on factors that include past claims experience, sales history, product manufacturing and engineering changes and industry developments. Liabilities for product recall campaigns are recorded at the time the company’s obligation is known and can be reasonably estimated. Product warranties, including recall campaigns, not expected to be paid within one year are recorded as a non-current liability.

A summary of the changes in product warranties is as follows (in millions):

	2011			2010			2009
Total product warranties – beginning of year	$	54		$	109		$	102
Accruals for product warranties		23			23			33
Payments		(22	)		(28	)		(34	)
Change in estimates and other		(7	)		(11	)		(10	)
Product warranty activity related to discontinued operations(1)		—			1			18
Reclassifications to liabilities of discontinued operations		—			(40	)		—
Total product warranties – end of year		48			54			109
Less: non-current product warranties (see Note 14)		(29	)		(26	)		(51	)
Product warranties – current	$	19		$	28			58
____________________

(1)

Product warranty activity related to discontinued operations includes accruals for product warranties of $10 million and $27 million in fiscal years 2010 and 2009, respectively; and payments of $9 million in each of the fiscal years 2010 and 2009, respectively.

OTHER LIABILITIES

12 Months Ended

Sep. 30, 2011

Other Liabilities Disclosure [Abstract]

Other Liabilities Disclosure [Text Block]

14. OTHER LIABILITIES

Other liabilities are summarized as follows (in millions):

	September 30,
	2011		2010
Asbestos-related liabilities (see Note 22)	$	78	$	66
Non-current deferred income tax liabilities (see Note 21)		92		94
Liabilities for uncertain tax positions (see Note 21)		35		47
Product warranties (see Note 13)		29		26
Environmental (see Note 22)		9		13
Indemnity obligations (see Note 22)		41		32
Other		41		43
Other liabilities	$	325	$	321

LONG-TERM DEBT

12 Months Ended

Sep. 30, 2011

Debt Disclosure [Abstract]

Long-term Debt [Text Block]

15. LONG-TERM DEBT

Long-Term Debt, net of discounts where applicable, is summarized as follows (in millions):

	September 30,
	2011			2010
8-3/4 percent notes due 2012	$	84		$	84
8-1/8 percent notes due 2015		250			250
10-5/8 percent notes due 2018		246			245
4.625 percent convertible notes due 2026(1)		300			300
4.0 percent convertible notes due 2027(1)		200			200
Lines of credit and other		8			9
Unamortized gain on interest rate swap termination		14			18
Unamortized discount on convertible notes		(68	)		(77	)
Subtotal		1,034			1,029
Less: current maturities		84			—
Long-term debt	$	950		$	1,029
____________________

(1)

The 4.625 percent and 4.0 percent convertible notes contain a put and call feature, which allows for earlier redemption beginning in 2016 and 2019, respectively (see Convertible Securities below).

Debt Securities

On March 3, 2010, the company completed a public offering of debt securities consisting of the issuance of $250 million 8-year fixed rate 10-5/8 percent notes due March 15, 2018. The offering was made pursuant to a shelf registration statement filed with the Securities and Exchange Commission on November 20, 2009, which became effective December 23, 2009 (the “Shelf Registration Statement”), registering $750 million aggregate debt and/or equity securities that may be offered in one or more series on terms to be determined at the time of sale. The notes were issued at a discounted price of 98.024 percent of their principal amount. The proceeds from the sale of the notes, net of discount, were $245 million and were primarily used to repurchase $175 million of the company’s previously outstanding $276 million 8-3/4 percent notes due 2012.

On March 23, 2010, the company completed the debt tender offer for its 8-3/4 percent notes due March 1, 2012. The notes were repurchased at 109.75 percent of their principal amount. The repurchase of $175 million of 8-3/4 percent notes was accounted for as an extinguishment of debt and, accordingly, the company recognized a net loss on debt extinguishment of approximately $13 million, which is included in interest expense, net in the consolidated statement of operations. The loss on debt extinguishment primarily relates to the $17 million paid in excess of par to repurchase the $175 million of 8-3/4 percent notes, partially offset by a $6 million gain associated with the acceleration of previously deferred unamortized interest rate swap gains associated with the 8-3/4 percent notes.

On June 15, 2010, the company purchased in the open market $17 million of its 8-3/4 percent notes due March 1, 2012. The notes were repurchased at 104.875 percent of their principal amount. On June 17, 2010, the company purchased in the open market $1 million of its 8-1/8 percent notes due September 15, 2015. The notes were repurchased at 94.000 percent of their principal amount.

Revolving Credit Facility

On February 5, 2010 the company signed an agreement to amend and extend the revolving credit facility, which became effective on February 26, 2010. Pursuant to the revolving credit facility as amended, the company had a $539 million revolving credit facility at September 30, 2010 which excluded approximately $28 million of commitments that were unavailable due to the bankruptcy of Lehman Brothers in 2008. On March 31, 2011, the company exercised the accordion feature of the agreement, which allowed it to increase the size of the revolving credit facility with an additional revolving credit loan with a new lender in the amount of $30 million. On April 13, 2011 the company exercised an additional $15 million of the accordion feature. On June 23, 2011, $143 million of the revolving credit facility (including $2 million available under letters of credit) matured for banks that elected not to extend their original commitments (non-extending banks). The remaining revolving credit facility balance of $441 million matures in January 2014. The availability under this facility is dependent upon various factors, including principally performance against certain financial covenants. At September 30, 2011 and September 30, 2010, there were no borrowings outstanding under the revolving credit facility. The $441 million revolving credit facility includes $100 million of availability for the issuance of letters of credit. At September 30, 2011, no amount was outstanding on the letters of credit. At September 30, 2010, $26 million of letters of credit were outstanding under this facility.

Availability under the revolving credit facility is subject to a collateral test, pursuant to which borrowings on the revolving credit facility cannot exceed 1.0x the collateral test value. The collateral test is performed on a quarterly basis and under the most recent collateral test, the full amount of the revolving credit facility was available for borrowing at September 30, 2011. Availability under the revolving credit facility is also subject to certain financial covenants based on (i) the ratio of the company’s priority debt (consisting principally of amounts outstanding under the revolving credit facility, U.S. accounts receivable securitization and factoring programs, and third-party non-working capital foreign debt) to EBITDA and (ii) the amount of annual capital expenditures. The company is required to maintain a total priority debt-to-EBITDA ratio, as defined in the agreement, of (i) 2.25 to 1 as of the last day of each fiscal quarter commencing with the fiscal quarter ended September 30, 2011 through and including the fiscal quarter ended June 30, 2012 and (ii) 2.00 to 1 as of the last day of each fiscal quarter thereafter through maturity. At September 30, 2011, the company was in compliance with all covenants under its credit agreement with a ratio of approximately 0.19x for the priority debt-to-EBITDA covenant.

Borrowings under the revolving credit facility are collateralized by approximately $671 million of the company’s assets, primarily consisting of eligible domestic U.S. accounts receivable, inventory, plant, property and equipment, intellectual property and the company’s investment in all or a portion of certain of its wholly-owned subsidiaries.

Borrowings under the revolving credit facility are subject to interest based on quoted LIBOR rates plus a margin, and a commitment fee on undrawn amounts, both of which are based upon the company’s current credit rating for the senior secured facility. At September 30, 2011, the margin over LIBOR rate was 425 basis points and the commitment fee was 50 basis points.

Certain of the company’s subsidiaries, as defined in the credit agreement, irrevocably and unconditionally guarantee amounts outstanding under the amended revolving credit facility. Similar subsidiary guarantees are provided for the benefit of the holders of the publicly-held notes outstanding under the company’s indentures (see Note 26).

Letter of Credit Facilities

The company entered into a five-year credit agreement dated as of November 18, 2010 with Citicorp USA, Inc., as administrative agent and issuing bank, the other lenders party thereto and the Bank of New York Mellon, as paying agent. Under the terms of this credit agreement, as amended, the company has the right to obtain the issuance, renewal, extension and increase of letters of credit up to an aggregate availability of $30 million. This facility contains covenants and events of default generally similar to those existing in the company’s public debt indentures. At September 30, 2011, $30 million of letters of credit were outstanding under this facility. In addition, the company had $2 million of letters of credit outstanding through other letters of credit facilities at each of September 30, 2011 and 2010.

Convertible Securities

In February 2007, the company issued $200 million of 4.00 percent convertible senior unsecured notes due 2027 (the 2007 convertible notes). In March 2006, the company issued $300 million of 4.625 percent convertible senior unsecured notes due 2026 (the 2006 convertible notes). The 2007 convertible notes bear cash interest at a rate of 4.00 percent per annum from the date of issuance through February 15, 2019, payable semi-annually in arrears on February 15 and August 15 of each year. After February 15, 2019, the principal amount of the notes will be subject to accretion at a rate that provides holders with an aggregate annual yield to maturity of 4.00 percent. The 2006 convertible notes bear cash interest at a rate of 4.625 percent per annum from the date of issuance through March 1, 2016, payable semi-annually in arrears on March 1 and September 1 of each year. After March 1, 2016, the principal amount of the notes will be subject to accretion at a rate that provides holders with an aggregate annual yield to maturity of 4.625 percent.

In May 2008, the FASB issued guidance contained in Accounting Standards Codification (ASC) Topic 470-20, “Debt with Conversion and Other Options” which applies to all convertible debt instruments that have a “net settlement feature”, which means that such convertible debt instruments, by their terms, may be settled either wholly or partially in cash upon conversion. This topic requires issuers of convertible debt instruments that may be settled wholly or partially in cash upon conversion to separately account for the liability and equity components in a manner reflective of the issuers’ nonconvertible debt borrowing rate.

This guidance impacted the company’s accounting for the 2006 convertible notes and the 2007 convertible notes. On October 1, 2009, the company adopted this guidance and applied its impact retrospectively to all periods presented. Upon adoption, the company recognized the estimated equity component of the convertible notes of $108 million ($69 million after tax) in additional paid-in capital. In addition, the company allocated $4 million of unamortized debt issuance costs to the equity component and recognized this amount as a reduction to additional paid-in capital. The company also recognized a discount on convertible notes of $108 million, which is being amortized as non-cash interest expense over periods of ten and twelve years for the 2006 convertible notes and 2007 convertible notes, respectively.

Upon recognition of the equity component of the convertible notes, the company also recognized a deferred tax liability of $39 million as the tax effect of the basis difference between carrying and notional values of the convertible notes. The carrying value of this deferred tax liability was offset with certain net deferred tax assets in the first quarter of fiscal year 2009 for determining valuation allowances against those deferred tax assets (see Note 21).

At September 30, 2011 and 2010, the carrying amount of the equity component recognized upon adoption was $67 million. The following table summarizes the principal amounts and related unamortized discount on convertible notes (in millions):

	September 30,			September 30,
	2011			2010
Principal amount of convertible notes	$	500		$	500
Unamortized discount on convertible notes		(68	)		(77	)
Net carrying value	$	432		$	423

The following table summarizes other information related to the convertible notes:

	2006 Convertible Notes		2007 Convertible Notes
Total amortization period for debt discount (in years):	10		12
Remaining amortization period for debt discount (in years):	5		8
Effective interest rates on convertible notes:	7.0	%	7.7	%

The following table summarizes interest costs recognized on convertible notes (in millions):

	Year Ended September 30,
	2011		2010		2009
Contractual interest coupon	$	22	$	22	$	22
Amortization of debt discount		9		8		8
Total	$	31	$	30	$	30

Conversion Features – convertible securities

The 2007 convertible notes are convertible into shares of the company’s common stock at an initial conversion rate, subject to adjustment, equivalent to 37.4111 shares of common stock per $1,000 initial principal amount of notes, which represents an initial conversion price of approximately $26.73 per share. If converted, the accreted principal amount will be settled in cash and the remainder of the company’s conversion obligation, if any, in excess of such accreted principal amount will be settled in cash, shares of common stock, or a combination thereof, at the company’s election. Holders may convert their notes at any time on or after February 15, 2025. The maximum number of shares of common stock the 2007 convertible notes are convertible into is approximately 7 million.

The 2006 convertible notes are convertible into shares of the company’s common stock at an initial conversion rate, subject to adjustment, equivalent to 47.6667 shares of common stock per $1,000 initial principal amount of notes, which represents an initial conversion price of approximately $20.98 per share. If converted, the accreted principal amount will be settled in cash and the remainder of the company’s conversion obligation, if any, in excess of such accreted principal amount will be settled in cash, shares of common stock, or a combination thereof, at the company’s election. Holders may convert their notes at any time on or after March 1, 2024. The maximum number of shares of common stock the 2006 convertible notes are convertible into is approximately 14 million.

Prior to February 15, 2025 (2007 convertible notes) and March 1, 2024 (2006 convertible notes), holders may convert their notes only under the following circumstances:

during any calendar quarter, if the closing price of the company’s common stock for 20 or more trading days in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter exceeds 120 percent of the applicable conversion price;
during the five business day period after any five consecutive trading day period in which the average trading price per $1,000 initial principal amount of notes is equal to or less than 97 percent of the average conversion value of the notes during such five consecutive trading day period;
upon the occurrence of specified corporate transactions; or
if the notes are called by the company for redemption.

Redemption Features – convertible securities

On or after February 15, 2019, the company may redeem the 2007 convertible notes, in whole or in part, for cash at a redemption price equal to 100 percent of the accreted principal amount plus any accrued and unpaid interest. On each of February 15, 2019 and 2022, or upon certain fundamental changes, holders may require the company to purchase all or a portion of their 2007 convertible notes at a purchase price in cash equal to 100 percent of the accreted principal amount plus any accrued and unpaid interest.

On or after March 1, 2016, the company may redeem the 2006 convertible notes, in whole or in part, for cash at a redemption price equal to 100 percent of the accreted principal amount plus any accrued and unpaid interest. On each of March 1, 2016, 2018, 2020, 2022 and 2024, or upon certain fundamental changes, holders may require the company to purchase all or a portion of their 2006 convertible notes at a purchase price in cash equal to 100 percent of the accreted principal amount plus any accrued and unpaid interest.

The 2007 and 2006 convertible notes are fully and unconditionally guaranteed by certain subsidiaries of the company that currently guarantee the company’s obligations under its senior secured credit facility and other publicly-held notes (see Revolving Credit Facility above).

Accounts Receivable Securitization

In September 2009 the company entered into a new, two-year, $125 million U.S. receivables financing arrangement which is provided on a committed basis by a syndicate of financial institutions led by Ally Commercial Finance LLC (formerly, GMAC Commercial Finance LLC). In October 2010, the company extended the expiration of the program to October 2013 (see Note 6). The weighted average interest rate on borrowings under this arrangement was approximately 6.25 percent at September 30, 2011. At September 30, 2011 and 2010, no amount was outstanding under this program. This program does not have specific financial covenants; however, it does have a cross-default provision to the company’s revolving credit facility agreement.

Interest Rate Swap Agreements

In March 2010, the company entered into an interest rate swap agreement that effectively converted $125 million of the company’s 8-1/8 percent notes due 2015 to variable interest rates. The swap had been designated as a fair value hedge and the impact of the changes in its fair values was offset by an equal and opposite change in the carrying value of the related notes. Under the terms of the swap agreement, the company received a fixed rate of interest of 8-1/8 percent on notional amounts of $125 million and paid a variable rate based on U.S. dollar six-month LIBOR plus a spread of 4.61 percent. The payments under the swap agreement coincided with the interest payment dates on the hedged debt instrument, and the difference between the amounts paid and received is included in interest expense, net. In July 2010, the company terminated the interest rate swap agreement and received proceeds from the termination of approximately $7 million.

The unamortized fair value adjustment of the notes associated with terminated interest rate swaps was $14 million and $18 million at September 30, 2011 and 2010, respectively. The fair value adjustment of the notes is classified as long-term debt in the consolidated balance sheet and is amortized to earnings as a reduction of interest expense over the remaining term of the debt.

Leases

The company has various operating leasing arrangements. Future minimum lease payments under these operating leases are $16 million in 2012, $13 million in 2013, $12 million in 2014, $11 million in 2015, $11 million in 2016 and $28 million thereafter.

FINANCIAL INSTRUMENTS

12 Months Ended

Sep. 30, 2011

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

16. FINANCIAL INSTRUMENTS

The company’s financial instruments include cash and cash equivalents, short-term debt, long-term debt, interest rate swaps, interest rate cap and foreign exchange forward contracts. The company uses derivatives for hedging and non-trading purposes in order to manage its interest rate and foreign exchange rate exposures.

Foreign Exchange Contracts

As a result of the company’s substantial international operations, it is exposed to foreign currency risks that arise from normal business operations, including in connection with transactions that are denominated in foreign currencies. In addition, the company translates sales and financial results denominated in foreign currencies into U.S. dollars for purposes of its consolidated financial statements. As a result, appreciation of the U.S. dollar against these foreign currencies generally will have a negative impact on reported revenues and operating income while depreciation of the U.S. dollar against these foreign currencies will generally have a positive effect on reported revenues and operating income. For fiscal years 2011 and 2010, the company’s reported financial results have benefited from depreciation of the U.S. dollar against foreign currencies whereas during fiscal year 2009, reported financial results have been adversely affected by appreciation of the U.S. dollar against foreign currencies.

The company has a foreign currency cash flow hedging program to reduce the company’s exposure to changes in exchange rates on foreign currency purchases and sales. The company uses foreign currency forward contracts to manage the company’s exposures arising from foreign currency exchange risk. Gains and losses on the underlying foreign currency exposures are partially offset with gains and losses on the foreign currency forward contracts. Under this foreign currency cash flow hedging program, the company has designated the foreign exchange contracts (the “contracts”) as cash flow hedges of underlying forecasted foreign currency purchases and sales. The effective portion of changes in the fair value of the contracts is recorded in Accumulated Other Comprehensive Loss (AOCL) in the consolidated balance sheet and is recognized in operating income when the underlying forecasted transaction impacts earnings. The terms of the foreign exchange contracts generally require the company to place cash on deposit as collateral if the fair value of these contracts represents a liability for the company. The fair values of the foreign exchange derivative instruments and any related collateral cash deposits are presented on a net basis as the derivative contracts are subject to master netting arrangements. The company’s foreign exchange contracts generally mature within twelve months.

At September 30, 2011, the company’s foreign exchange contracts outstanding under its foreign currency cash flow hedging program were not significant. At September 30, 2010, the company had no foreign exchange contracts outstanding under its foreign currency cash flow hedging program. The company classifies the cash flows associated with the contracts in cash flows from operating activities in the consolidated statement of cash flows. This is consistent with the classification of the cash flows associated with the underlying hedged item.

The company generally has not hedged against its foreign currency exposure related to translations to U.S. dollars of its financial results denominated in foreign currencies. However, in the fourth quarter of fiscal years 2011 and 2010, due to the volatility of the Brazilian real as compared to the U.S. dollar, the company entered into foreign currency option contracts to mitigate volatility in the translation of Brazilian real earnings to U.S. dollars. Gains and losses on these option contracts are recorded in other income (expense), net, in the consolidated statement of operations, generally reducing the exposure to translation volatility during a full-year period. During fiscal year 2011, the company recognized net gains of approximately $5 million associated with its Brazilian real foreign currency option contracts which are included in other income in the consolidated statement of operations. The company did not have any outstanding option contracts at September 30, 2011.

The following table summarizes the impact of the company’s derivatives instruments on comprehensive income for fiscal years ended September 30 (in millions):

	Location of
	Gain (Loss)	2011			2010			2009
Derivatives designated as hedging instruments:
Amount of gain (loss) recognized in AOCL
(effective portion)	AOCL	$	—		$	3		$	(15	)
Amount of gain (loss) reclassified from AOCL
into income (effective portion)	Cost of Sales		(1	)		1			(20	)

Derivatives not designated as hedging instruments:
Amount of gain (loss) recognized in income	Other Income		5			(1	)		(3	)

Fair Value

Fair values of financial instruments are summarized as follows (in millions):

	September 30,				September 30,
	2011				2010
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Cash and cash equivalents	$	217	$	217	$	343	$	343
Short-term debt		84		83		—		—
Long-term debt		950		844		1,029		1,132

Cash and cash equivalents — All highly liquid investments purchased with an original maturity of three months or less are considered to be cash equivalents. The carrying value approximates fair value because of the short maturity of these instruments.

Foreign exchange forward contracts — The company uses foreign exchange forward purchase and sale contracts with terms of one year or less to hedge its exposure to changes in foreign currency exchange rates. The fair value of foreign exchange forward contracts is based on a model which incorporates observable inputs including quoted spot rates, forward exchange rates and discounted future expected cash flows utilizing market interest rates with similar quality and maturity characteristics.

Short-term debt and long-term debt — Fair values are based on interest rates that would be currently available to the company for issuance of similar types of debt instruments with similar terms and remaining maturities.

- Definition

The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 45
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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-Paragraph 2
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-URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993

+ Details

SHAREOWNERS' EQUITY

12 Months Ended

Sep. 30, 2011

Equity [Abstract]

Comprehensive Income (Loss) Note [Text Block]

17. SHAREOWNERS’ EQUITY

Common Stock

The company is authorized to issue 500 million shares of Common Stock, with a par value of $1 per share, and 30 million shares of Preferred Stock, without par value, of which two million shares are designated as Series A Junior Participating Preferred Stock (Junior Preferred Stock). No shares of Junior Preferred Stock have been issued. The company’s Rights Plan, under which Preferred Share Purchase Rights were issued, expired by its terms on July 7, 2010 and the Rights under such Plan expired as well.

In March 2010, the company completed an equity offering of 19,952,500 common shares, par value of $1 per share, at a price of $10.50 per share. The proceeds of the offering of $200 million, net of underwriting discounts and commissions, were primarily used to repay outstanding indebtedness under the revolving credit facility and under the U.S. accounts receivable securitization program. The offering was made pursuant to the Shelf Registration Statement, registering $750 million aggregate debt and/or equity securities that may be offered in one or more series on terms to be determined at the time of sale.

The company has reserved approximately 4.9 million shares of Common Stock in connection with its 2010 Long-Term Incentive Plan, as amended (LTIP) for grants of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, performance shares, restricted share units and stock awards to key employees and directors. At September 30, 2011, there were 3.5 million shares available for future grants under these plans.

Accumulated Other Comprehensive Loss

The components of AOCL as reported in the Consolidated Balance Sheet and Statement of Shareowners’ Equity are as follows (in millions):

	September 30
	2011			2010			2009
Foreign currency translation	$	110		$	179		$	139
Employee benefit related adjustments		(942	)		(995	)		(873	)
Unrealized gains, net		3			4			—
Accumulated Other Comprehensive Loss	$	(829	)	$	(812	)	$	(734	)

- Definition

The entire disclosure for comprehensive income. Includes, but is not limited to, the following: 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income. Components of comprehensive income include: (1) foreign currency translation adjustments; (2) gains (losses) on foreign currency transactions that are designated as, and are effective as, economic hedges of a net investment in a foreign entity; (3) gains (losses) on intercompany foreign currency transactions that are of a long-term-investment nature, when the entities to the transaction are consolidated, combined, or accounted for by the equity method in the reporting enterprise's financial statements; (4) change in the market value of a futures contract that qualifies as a hedge of an asset reported at fair value; (5) unrealized holding gains (losses) on available-for-sale securities and that resulting from transfers of debt securities from the held-to-maturity category to the available-for-sale category; (6) a net loss recognized as an additional pension liability not yet recognized as net periodic pension cost; and (7) the net gain (loss) and net prior service cost or credit for pension plans and other postretirement benefit plans.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 130
-Paragraph 14-26
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Paragraph 1
-Subparagraph (SX 210.3-04)
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
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+ Details

EQUITY BASED COMPENSATION

12 Months Ended

Sep. 30, 2011

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

18. EQUITY BASED COMPENSATION

Stock Options

Under the company’s incentive plans, stock options are granted at prices equal to the fair value on the date of grant and have a maximum term of 10 years. Stock options vest over a three-year period from the date of grant. No stock options were granted during fiscal years 2011, 2010 and 2009.

The following is a rollforward of stock options for fiscal year 2011 (shares in thousands, exercise price and remaining contractual term represent weighted averages and aggregate intrinsic values in millions):

					Remaining	Aggregate
			Exercise		Contractual	Intrinsic
	Shares		Price		Life (years)	Value
Outstanding — beginning of year	1,402		$	17.22
Exercised	(321	)		17.92
Cancelled or expired	(129	)		19.23
Outstanding — end of year	952		$	16.71	3.1	—

Exercisable — end of year	952		$	16.71	3.1	—

The following table provides additional information about outstanding stock options at September 30, 2011 (shares in thousands, exercise price represents a weighted average):

	Outstanding				Exercisable
		Remaining
		Contractual	Exercise			Exercise
	Shares	Life (years)	Price		Shares	Price
$12.00 to $16.00	410	5.3	$	13.46	410	$	13.46
$16.01 to $21.00	515	1.4		18.83	515		18.83
$21.01 to $26.00	27	0.4		25.65	27		25.65
Total	952				952

Compensation expense is recognized for the non-vested portion of previously issued stock options. Compensation expense associated with the expensing of stock options was not significant in fiscal years 2011, 2010 and 2009. Options exercised in fiscal year 2011 were approximately 321,000. No options were exercised in fiscal years 2010 and 2009.

Restricted Stock and Restricted Units

The company has granted shares of restricted stock and restricted share units to certain employees and non-employee members of the Board of Directors in accordance with the existing plans. The company measures the grant price fair value of these stock based awards at the market price of the company’s common stock as of the date of the grant. Employee awards typically vest at the end of three years and are subject to continued employment by the employee. Compensation cost associated with stock based awards is recognized ratably over the vesting period. Cash dividends on the restricted stock, if any, are reinvested in additional shares of common stock during the vesting period.

In fiscal years 2011, 2010 and 2009, the company granted, in thousands, 465,488, 965,480 and 2,507,700 shares of stock based awards, respectively. The grant date weighted average fair value of these shares was $18.89, $8.57 and $2.84 for shares granted in fiscal years 2011, 2010 and 2009, respectively.

The following is a rollforward of the company’s non-vested restricted shares and share units as of September 30, 2011, and the activity during fiscal year 2011 are summarized as follows (shares in thousands):

			Weighted-Average
	Number of		Grant-Date Fair
Non-vested Shares	Shares		Value
Non-vested - beginning of year	1,458		$	4.30
Granted	465			18.89
Vested	(1,160	)		7.76
Forfeited	(305	)		7.24
Non-vested - end of year	458			8.41

As of September 30, 2011, there was $4 million of total unrecognized compensation costs related to non-vested equity compensation arrangements. These costs are expected to be recognized over a weighted average period of 1 year. Total compensation expense recognized for restricted stock and restricted share units was $7 million in each of fiscal years 2011 and 2010 and $10 million in fiscal year 2009.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 50
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+ Details

RETIREMENT MEDICAL PLANS

12 Months Ended

Sep. 30, 2011

Postretirement Medical Plans With Prescription Drug Benefits [Abstract]

Postretirement Medical Plans With Prescription Drug Benefits [Text Block]

19. RETIREMENT MEDICAL PLANS

The company has retirement medical plans that cover certain of its U.S. and non-U.S. employees, including certain employees of divested businesses, and provide for medical payments to eligible employees and dependents upon retirement. These plans are unfunded.

The company approved amendments to certain retiree medical plans in fiscal years 2002 and 2004. The cumulative effect of these amendments was a reduction in the accumulated postretirement benefit obligation (APBO) of $293 million, which was being amortized as a reduction of retiree medical expense over the average remaining service period of approximately 12 years. These plan amendments have been challenged in three separate class action lawsuits that have been filed in the United States District Court for the Eastern District of Michigan (District Court). The lawsuits allege that the changes breach the terms of various collective bargaining agreements entered into with the United Auto Workers (the UAW lawsuit) and the United Steel Workers (the USW lawsuit) at facilities that have either been closed or sold. The complaints also allege a companion claim under the Employee Retirement Income Security Act of 1974 (ERISA) essentially restating the alleged collective bargaining breach claims and seeking to bring them under ERISA. Plaintiffs sought injunctive relief requiring the company to provide lifetime retiree health care benefits under the applicable collective bargaining agreements.

On December 22, 2005, the District Court issued an order granting a motion by the UAW for a preliminary injunction. The order enjoined the company from implementing the changes to retiree health benefits that had been scheduled to become effective on January 1, 2006, and ordered the company to reinstate and resume paying the full cost of health benefits for the UAW retirees at the levels existing prior to the changes approved in 2002 and 2004. On August 17, 2006, the District Court denied a motion by the company and the other defendants for summary judgment; granted a motion by the UAW for summary judgment; and granted the UAW’s request to make the terms of the preliminary injunction permanent (the injunction). Due to the uncertainty related to the ongoing lawsuits and because the injunction has the impact of at least temporarily changing the benefits provided under the existing postretirement medical plans, the company has accounted for the injunction as a rescission of the 2002 and 2004 plan amendments that modified UAW retiree healthcare benefits. The company recalculated the APBO as of December 22, 2005, which resulted in an increase in the APBO of $168 million. The company began recording the impact of the injunction in March 2006. In addition, the injunction ordered the defendants to reimburse the plaintiffs for out-of-pocket expenses incurred since the date of the earlier benefit modifications. The company has recorded a $5 million reserve at September 30, 2011 and 2010 as the best estimate of its liability for these retroactive benefits. The company continues to believe it has meritorious defenses to these actions and has appealed the District Court’s order to the U.S. Court of Appeals for the Sixth Circuit. The ultimate outcome of the UAW lawsuit may result in future plan amendments. The impact of any future plan amendments cannot be currently estimated.

On November 12, 2008, the company settled the USW lawsuit with the United Steel Workers with respect to certain retiree medical plan amendments for approximately $28 million. This settlement was paid in November 2008 and increased the accumulated postretirement benefit obligation (APBO) by approximately $23 million. The increase in APBO has been reflected in the company’s actuarial valuations as an increase in actuarial losses and is being amortized into periodic retiree medical expense over an average expected remaining service life of approximately 10 years.

The company’s retiree medical obligations were measured as of September 30, 2011 and 2009. The following are the assumptions used in the measurement of the APBO and retiree medical expense:

	2011		2010		2009
Discount rate	4.60	%	4.60	%	5.60	%
Health care cost trend rate (weighted average)	7.50	%	7.75	%	7.85	%
Ultimate health care trend rate	5.00	%	5.00	%	5.00	%
Year ultimate rate is reached	2023		2023		2021

The assumptions noted above are used to calculate the APBO for each fiscal year end and retiree medical expense for the subsequent fiscal year.

The discount rate is used to calculate the present value of the APBO. This rate is determined based on high-quality fixed income investments that match the duration of expected retiree medical benefits. The company has used the corporate AA/Aa bond rate for this assumption. The health care cost trend rate represents the company’s expected annual rates of change in the cost of health care benefits. The company’s projection for fiscal year 2012 is an increase in health care costs of 7.50 percent.

The APBO as of the September 30, 2011 and 2010 measurement dates are summarized as follows (in millions):

	2011		2010
Retirees	$	521	$	564
Employees eligible to retire		9		10
Employees not eligible to retire		15		15
Total	$	545	$	589

The following reconciles the change in APBO and the amounts included in the consolidated balance sheet for years ended September 30, 2011 and 2010, respectively (in millions):

	2011			2010
APBO — beginning of year	$	589		$	633
Service cost		1			1
Interest cost		26			32
Participant contributions		3			3
Actuarial loss (gain)		(32	)		14
Divestitures (1)		—			(49	)
Foreign currency rate changes		1			2
Benefit payments		(43	)		(47	)
APBO — end of year		545			589
Other (2)		5			5
Retiree medical liability	$	550		$	594

____________________
	(1)	The decrease in APBO represents retiree medical liabilities of MSSC which were assumed by the buyer as part of the sale transaction that closed in the first quarter of fiscal year 2010 (see Note 3).

	(2)	The company recorded a $5 million reserve for retiree medical liabilities at September 30, 2011 and 2010 as its best estimate for retroactive benefits related to the previously mentioned injunction.

Actuarial losses relate to changes in the discount rate and earlier than expected retirements due to certain plant closings and restructuring actions. In accordance with FASB ASC Topic 715, “Compensation – Retirement Benefits”, a portion of the actuarial losses is not subject to amortization. The actuarial losses that are subject to amortization are generally amortized over the average expected remaining service life, which is approximately 10 years. Union plan amendments are generally amortized over the contract period, or three years.

The Medicare Prescription Drug Improvement and Modernization Act of 2003 provides for a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit at least actuarially equivalent to the benefit established by the law. The company provides retiree medical benefits for certain plans that exceed the value of the benefits that are provided by the Medicare Part D plan. Therefore, management concluded that these plans are at least actuarially equivalent to the Medicare Part D plan and the company is eligible for the federal subsidy. The impact of the subsidy was a reduction in the fiscal year 2011 and 2010 retiree medical expense of $6 million. In September 2011, in connection with the Health Care and Education Reconciliation Act of 2010, the company converted its current prescription drug program for certain retirees to a group-based company sponsored Medicare Part D program, or Employer Group Waiver Plan (EGWP). Beginning in 2013, the company will use the Part D subsidies delivered through EGWP each year to reduce its net retiree medical costs. As a result of this change in assumption, the company reduced its APBO by approximately $35 million, which will be amortized over an average expected remaining service life of approximately 10 years.

The retiree medical liability is included in the consolidated balance sheet as follows (in millions):

	September 30,
	2011		2010
Current — included in compensation and benefits	$	44	$	45
Long-term — included in retirement benefits		506		549
Retiree medical liability	$	550	$	594

The following table summarizes the amounts included in Accumulated Other Comprehensive Loss net of tax related to retiree medical liabilities as of September 30, 2011 and 2010 and changes recognized in Other Comprehensive Loss net of tax for the year ended September 30, 2011.

				Prior
				Service
	Net Actuarial			Cost
	Loss			(Benefit)			Total
Balance at September 30, 2010	$	250		$	(24	)	$	226
Net actuarial loss for the year		(32	)		—			(32	)
Amortization for the year		(29	)		9			(20	)
Deferred tax impact (1)		14			—			14
Balance at September 30, 2011	$	203		$	(15	)	$	188

Balance at September 30, 2009	$	285		$	(33	)	$	252
Net actuarial loss for the year		14			—			14
Amortization for the year		(35	)		9			(26	)
Divestiture of business		(14	)		—			(14	)
Balance at September 30, 2010	$	250		$	(24	)	$	226

____________________

(1)

Tax expense recorded against the income in other comprehensive loss resulting from the year-end re-measurement of retiree healthcare obligations (see Note 21).

The net actuarial loss and prior service benefit that is estimated to be amortized from accumulated other comprehensive loss into net periodic retiree medical expense in fiscal year 2012 are $26 million and $9 million, respectively.

The components of retiree medical expense for years ended September 30 are as follows (in millions):

	2011			2010			2009
Service cost	$	1		$	1		$	2
Interest cost		26			32			37
Amortization of:
Prior service benefit		(9	)		(9	)		(9	)
Actuarial losses		29			35			27
Termination benefits (1)		—			—			2
Retiree medical expense – total company		47			59			59
Less: Retiree medical expense of discontinued operations		—			—			5
Retiree medical expense included in continuing operations	$	47		$	59		$	54

____________________
	(1)		In 2009, the company recorded termination benefits of $2 million associated with the announced closure of its Commercial Truck brakes plant in Tilbury, Ontario. This expense is included in restructuring costs (see Note 5) in the consolidated statement of operations.

A one-percentage point change in the assumed health care cost trend rate for all years to, and including, the ultimate rate would have the following effects (in millions):

	2011			2010
Effect on total service and interest cost
1% Increase	$	3		$	3
1% Decrease		(2	)		(2	)
Effect on APBO
1% Increase		65			60
1% Decrease		(53	)		(52	)

The company expects future benefit payments as follows (in millions):

	Gross		Gross
	Benefit		Medicare
	Payments		Receipts(1)
Fiscal 2012	$	46	$	3
Fiscal 2013		46		5
Fiscal 2014		45		5
Fiscal 2015		44		5
Fiscal 2016		44		5
Fiscal 2017 – 2021		214		30

____________________

(1)

Consists of Medicare Part D - retiree drug subsidy in fiscal year 2012 and through December 31, 2012 and, subsidies and rebates available under EGWP beginning January 1, 2013.

RETIREMENT PENSION PLANS

12 Months Ended

Sep. 30, 2011

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

20. RETIREMENT PENSION PLANS

The company sponsors defined benefit pension plans that cover the majority of its U.S. employees and certain non-U.S. employees. Pension benefits for salaried employees are based on years of credited service and compensation. Pension benefits for hourly employees are based on years of service and specified benefit amounts. The company’s funding policy provides that annual contributions to the pension trusts will be at least equal to the minimum amounts required by ERISA in the U.S. and the actuarial recommendations or statutory requirements in other countries.

On August 1, 2010, Meritor amended its defined benefit pension plan in the United Kingdom to cease the accrual of future benefits for all of its active plan participants. Subsequent to the freeze date, the company began making contributions to its defined contribution savings plan on behalf of the affected employees. The amount of the savings plan contribution will be based on a percentage of the employees’ pay. These changes do not affect current retirees. The company began recording the impact of the plan freeze in the fourth quarter of fiscal year 2010. The amendment to freeze the plan triggered a curtailment in the fourth quarter of fiscal year 2010 reducing pension expense by $7 million. The reduction in expense was primarily attributable to the required immediate recognition of negative prior service costs which were previously being amortized into net periodic pension expense over the active participants remaining average service life. Subsequent to the plan freeze, accumulated actuarial losses are being amortized into net periodic pension expense over the average life expectancy of inactive plan participants of approximately 28 years rather than over their remaining average service life.

On February 24, 2009, the company announced the closure of its commercial truck brakes plant in Tilbury, Ontario, Canada. All salaried and hourly employees at this facility participate in both a salaried or hourly pension plan and a retiree medical plan. The expected closure of this facility triggered plan curtailments requiring the remeasurement of each plan. The measurement date of these valuations was February 28, 2009. The FASB’s retirement benefits guidance requires a plan curtailment loss to be recognized in earnings when it is probable that a curtailment will occur and the effects are reasonably estimable. Including pension termination benefits of approximately $14 million required to be paid under the terms of the plans, the company recognized plan curtailment losses of approximately $16 million, which include $2 million of retiree medical benefits, recorded in restructuring costs (see Note 5) in the consolidated statement of operations.

On March 5, 2009, the company announced its plans to close its coil spring operations in Milton, Ontario, Canada, which is part of MSSC. As noted in Note 3, the company sold its 57 percent interest in MSSC in October 2009. The company recognized an $8 million curtailment charge, primarily related to pension termination benefits, which is included in loss from discontinued operations in the consolidated statement of operations.

In April 2007, the company announced a freeze of its defined benefit pension plan for salaried and non-represented employees in the United States, effective January 1, 2008. The change affected approximately 3,800 employees including certain employees who continued to accrue benefits for an additional transition period, ending June 30, 2011. After these freeze dates, the company is instead making additional contributions to its defined contribution savings plan on behalf of the affected employees. The amount of the savings plan contribution is based on a percentage of the employees’ pay, with the contribution percentage increasing as a function of employees’ age. These changes do not affect current retirees or represented employees. Subsequent to the June 30, 2011 freeze date, accumulated actuarial losses are being amortized into net periodic pension expense over the average life expectancy of inactive plan participants of approximately 28 years. Prior to June 30, 2011, accumulated actuarial losses were being amortized over the remaining average service life of approximately 9 years.

The company’s pension obligations were measured as of September 30, 2011, 2010 and 2009. The U.S. plans include a qualified and non-qualified pension plans. The company’s significant non-U.S. plan is located in the United Kingdom. Other non-U.S. plans include plans primarily in Canada, Germany and Switzerland.

The following are the assumptions used in the measurement of the projected benefit obligation (PBO) and net periodic pension expense:

	U.S. Plans
	2011		2010		2009
Discount Rate	4.85	%	4.90	%	5.70	%
Assumed return on plan assets (beginning of the year)	8.50	%	8.50	%	8.50	%
Rate of compensation increase	3.75	%	3.75	%	3.75	%

	Non-U.S. Plans
	2011		2010		2009
Discount Rate (1)	2.25% —5.20	%	2.50% —5.00	%	3.00% — 6.25	%
Assumed return on plan assets (beginning of the year) (1)	2.50% —8.00	%	3.00% —8.00	%	3.00% — 8.00	%
Rate of compensation increase	2.00% —3.50	%	2.00% —3.50	%	2.00% — 3.50	%

____________________

(1)

The discount rate for the company’s U.K. pension plan was 5.00 percent, 5.00 percent and 5.50 percent for 2011, 2010 and 2009, respectively. The assumed return on plan assets for this plan was 8.00% percent for fiscal years 2011, 2010 and 2009.

The assumptions noted above are used to calculate the PBO reported in each fiscal year and net periodic pension expense for the subsequent fiscal year.

The discount rate is used to calculate the present value of the PBO. The rate used reflects a rate of return on high-quality fixed income investments that match the duration of expected benefit payments. The company uses a portfolio of long-term corporate AA/Aa bonds that match the duration of the expected benefit payments to establish the discount rate for this assumption.

The assumed return on plan assets is used to determine net periodic pension expense. The rate of return assumptions are based on projected long-term market returns for the various asset classes in which the plans are invested, weighted by the target asset allocations. An incremental amount for active plan asset management and diversification, where appropriate, is included in the rate of return assumption. The return assumption is reviewed annually.

The rate of compensation increase represents the long-term assumption for expected increases to salaries for pay-related plans. The accompanying disclosures include pension obligations associated with businesses classified as discontinued operations.

The following table reconciles the change in the PBO, the change in plan assets and amounts included in the consolidated balance sheet for the years ended September 30, 2011 and 2010, respectively (in millions):

	2011									2010
	U.S.			Non- U.S.			Total			U.S.			Non- U.S.			Total
PBO — beginning of year	$	1,201		$	762		$	1,963		$	1,047		$	806		$	1,853
Service cost		5			2			7			6			10			16
Interest cost		57			36			93			58			37			95
Participant contributions		—			1			1			—			2			2
Actuarial loss (gain)		19			(27	)		(8	)		154			42			196
Divestitures (1)		—			(38	)		(38	)		—			(78	)		(78	)
Benefit payments		(64	)		(36	)		(100	)		(64	)		(45	)		(109	)
Foreign currency rate changes		—			(2	)		(2	)		—			(12	)		(12	)
PBO — end of year		1,218			698			1,916			1,201			762			1,963
Change in plan assets
Fair value of assets — beginning of year		765			589			1,354			726			610			1,336
Actual return on plan assets		57			15			72			60