US: ArvinMeritor makes $430m in savings after 1,800 jobs go
Diverse autoparts maker ArvinMeritor has achieved savings of about US$430m on an annual basis since last October.
"The difficult conditions we continue to experience in our commercial and light vehicle markets has required us to take aggressive steps during the past six months to align our organisation to the lower capacity levels," said chairman, CEO and president Chip McClure in a statement.
"Many of these actions have regrettably impacted our employees, but [ArvinMeritor] is committed to successfully manage the company through the continuing economic turbulence. We identified and implemented these actions quickly and are pleased to report the savings are significant, which will help protect the long-term health of the company," he added.
Programmes begun in February and March, including the axing of nearly 250 employees and other cost reductions, will result in annual savings of $95m, or $64m in fiscal year 2009 which is incremental to the $335mn in savings the company announced during its fiscal first quarter report last February when it announced a loss and said working capital was expected to be a drain on liquidity in the current quarter after what it described as "very late changes to production schedules" by customers left it with higher inventory. Auto makers had been slashing production after decades-low sales.
Since October, ArvinMeritor said, it has sacked over 1,800 employees globally, introduced several plant furlough programmes, including some with government support; announced the closure of manufacturing facilities in Tilbury and Milton, Ontario; reduced pay for salaried employees worldwide through base salary adjustments and/or curtailed production schedules; eliminated matching contribution to US 401-K [retirement plans]; suspended merit increases for fiscal year 2009; reduced capital spending; extended shutdowns at all plants; eliminated company-paid education and training programs; reduced its contribution to the charitable trust; suspended its quarterly dividend; reduced directors' pay by 10% and eliminated all non-critical discretionary spending.
"Through the implementation of these actions, our team continues to demonstrate their commitment to do what is necessary to respond aggressively to the current difficult economic conditions," McClure said.