ArvinMeritor to Consolidate Plants, Reports Quarterly Loss

(Akron/Tire Review) Automortive and commercial truck component maker ArvinMeritor said it will consolidate 11 of its manufacturing plants this year in a move to cut costs. The expected plant closure will result in a reduction of hundreds of salaried and hourly jobs. Most of the labour cutbacks are expected to come from its automotive product unit, where costs and margins remain depressed.

The company, which reported that it’s fiscal second quarter sales were up 14 per cent year-over-year to $2.3 billion, trimmed its fiscal 2005 earnings outlook. Second quarter profits dropped from $41 million in 2004 to a loss of $33 million for this year’s second quarter. Its light vehicle systems group posted a loss of $54 million for the quarter, down from a $50 million profit a year ago.

Raw material costs – particularly steel – have hurt the company’s performance. ArvinMeritor said rising steel prices will increase its raw material outlay by $100 million in fiscal 2005.