ArvinMeritor, Inc. today announced its plans to divest the company's Light Vehicle Aftermarket (LVA) business group and to take a non-cash goodwill impairment charge of $190 million, or $2.77 per diluted share, in its LVA business in the fiscal fourth quarter of 2004.
In addition, the company announced its plan to divest its Roll Coater coil coating business, a wholly owned subsidiary. These moves are designed to sharpen ArvinMeritor's focus on supporting its growing list of global Light Vehicle Systems (LVS) original equipment manufacturing (OEM) customers and its Commercial Vehicle Systems (CVS) OEM and aftermarket customers.
"These divestitures will enable ArvinMeritor to leverage our core competencies in the global automotive and commercial truck markets to provide the innovative solutions that give our OE customers a competitive edge," said ArvinMeritor Chairman, CEO and President Charles G. "Chip" McClure. "By concentrating our resources -- and longstanding engineering and design expertise -- on our core competencies, we will continue to generate even more value for our customers and our shareowners.
"LVA has earned a strong reputation for providing some of the world's best-known brands to a diverse and global customer base," McClure added. "In order for LVA to reach its full potential and succeed in the future, however, it needs to move forward under new owners whose strategic priorities include building critical mass in the business and providing it with product development and brand support.
"This is a customer-focused business with a long track record of exemplary service and expertly managed logistics and distribution capabilities," said McClure. "During the sales process, we remain committed to providing excellent service, high-quality products and competitive prices. In doing so, we will continue to strengthen our long-term relationships with the leading Light Vehicle Aftermarket customers."
The company will report the LVA and coil coating businesses as discontinued operations when it reports its fourth-quarter earnings on Nov. 15. Additional information concerning these actions will be provided at that time. "We believe these decisions are necessary steps to improve our financial flexibility and strengthen our long-term profitability," said McClure.
The company plans to use the proceeds of the sales of the LVA and coil coating businesses to strengthen the balance sheet and selectively reinvest in ArvinMeritor's core LVS and CVS business segments. The company expects to complete the divestitures during the 2005 fiscal year.