ArvinMeritor to Keep Light Vehicle Systems Unit
Tight credit, weak automotive sector scuttle sale plan
Tight credit, weak automotive sector scuttle sale plan
ArvinMeritor Inc. has called off its plan to sell its Light Vehicle Systems (LVS) business, citing the unavailability of credit financing and overall weakness in the automotive sector. Instead, it will reorganize the unit, hoping to improve its contribution to the organization’s revenues.
"We are firmly committed to our long-term strategy of focusing on the commercial vehicle on- and off-highway market segments for both original equipment manufacturers and aftermarket customers," stated chairman, CEO, and president Chip McClure.
The plant to sell the division was announced in 2008, and McClure reported the company had entered into negotiations toward a sale. "However, in light of the unprecedented challenges in the credit markets and the volume weakness in our industry, we have determined that in this financial environment we cannot capture the appropriate value for LVS by selling the business as a whole. We are confident that this decision will ultimately generate the best returns for our shareholders."
According to the new plan, ArvinMeritor will reorganize its LVS business group to include the Body Systems, Chassis Systems, and Wheels operations. Plans to sell the Body Systems operations as a unit remain in place.
In addition, ArvinMeritor said it would continue to explore strategies for exiting the Chassis Systems business. The company intends to keep the Wheels business.
The original plan had been to sell the LVS business within one year of May 2008, but in October 2008 the strategy was restated to include a potential spin-off.
"We are firmly committed to our long-term strategy of focusing on the commercial vehicle on- and off-highway market segments for both original equipment manufacturers and aftermarket customers," stated chairman, CEO, and president Chip McClure.
The plant to sell the division was announced in 2008, and McClure reported the company had entered into negotiations toward a sale. "However, in light of the unprecedented challenges in the credit markets and the volume weakness in our industry, we have determined that in this financial environment we cannot capture the appropriate value for LVS by selling the business as a whole. We are confident that this decision will ultimately generate the best returns for our shareholders."
According to the new plan, ArvinMeritor will reorganize its LVS business group to include the Body Systems, Chassis Systems, and Wheels operations. Plans to sell the Body Systems operations as a unit remain in place.
In addition, ArvinMeritor said it would continue to explore strategies for exiting the Chassis Systems business. The company intends to keep the Wheels business.
The original plan had been to sell the LVS business within one year of May 2008, but in October 2008 the strategy was restated to include a potential spin-off.
