ArvinMeritor to close 13 plants and eliminate 2,800 jobs

Auto parts supplier ArvinMeritor Inc. said May 3 it would close 13 plants in North America and Europe and cut 2,800 jobs globally in a restructuring plan expected to cost $325 million. The company said it will close nine plants in North America and four in Europe at a cost of 2,400 jobs. So far, it has only identified one plant — in Frankfurt, Germany — for closure.

The parts supplier said 400 jobs will be cut as part of global consolidations. ArvinMeritor has 27,500 employees and more than 110 manufacturing facilities worldwide.

Carsten Reinhardt, a senior vice president of ArvinMeritor and president of its commercial vehicle systems, said in a conference call that the company will create about 800 positions in what he called "low-cost sites," such as those in Mexico and Eastern Europe.

The company also announced it will freeze its pension plan for U.S. salaried and non-union employees effective January 1, 2008. The change will affect about 3,800 employees, including certain workers who will continue to accrue benefits for an additional transition period that ends June 30, 2011.

After the freeze dates, ArvinMeritor said it will instead make additional contributions to its defined contribution savings plan on behalf of the workers.

Details were released on the same day the Troy, Mich.-based supplier announced its fiscal second-quarter earnings. ArvinMeritor posted a net loss of $94 million, or $1.34 per share, compared with a profit of $45 million, or 65 cents per share, for the same quarter in 2006.

The company's loss from continuing operations totaled $13 million, or 19 cents per share, compared with a profit of $32 million, or 46 cents per share, for the same quarter in 2006. Those results exclude the company's emissions technologies business, which is being sold to private equity investors.

Excluding special items, the company posted an adjusted profit from continuing operations of $12 million, or 17 cents per share, compared with an adjusted profit of $24 million, or 34 cents per share, in the year-ago-period.

Revenue totaled $1.63 billion for both quarters.