ArvinMeritor has reported a drastic fall in earnings in its first quarter, which is attributed to a fall in demand from its North American customers and to the strike at Volkswagen in Brussels. Net income was US$7m, compared to US$34m last year.

Sales from continuing operations were up 12% compared to a year ago, to US$2.3bn. The company said the impact of foreign currency translation and strong sales in Commercial Vehicle Systems (CVS) in North America and Europe were partially offset by a decrease in domestic light vehicle production and the struck in Belgium, which which temporarily shut down an ArvinMeritor door module facility.

The company reduced its fiscal year 2007 forecast for light vehicle production to 15.3m vehicles in North America, down from 15.8m forecasted last quarter. The company’s forecast for Western Europe is unchanged at 16.1m vehicles.

Chairman, CEO and President of ArvinMeritor, Chip McClure, said, “In an effort to address the ongoing challenges, and create value for our shareowners, we are making good progress and are on track with our recently announced initiative, Performance Plus. By proactively taking control of our future through this global transformational initiative, while at the same time maintaining focus on improving our operational and financial performance, we will emerge a stronger, more dynamic global organization.”