ArvinMeritor has reported a $52m loss for the quarter ended March 31. That compares with net income of $24m in the same quarter of last year.

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In common with other suppliers, ArvinMeritor was hit by reduced sales – especially in North America – with revenues down 38% on last year at $1.1bn.


EBITDA, before special items, was $36m, down $68 million from the same period last year. The unfavourable impact of lower sales on EBITDA was partially offset by aggressive cost reduction efforts and demand for specialty and aftermarket products, driven by the company’s military contracts and expanding remanufacturing business.


“We are proud of the strong performance from our global operations teams despite continued low volumes in the commercial and light vehicle markets,” said Chip McClure, chairman, CEO and president. “While revenues are down in the OE light vehicle, truck and trailer businesses, compared to the first quarter, we are reporting more favourable earnings due to a continued focus on cost reduction efforts and strong performance from our specialty and aftermarket groups.”


Commercial vehicle sales were $739m, down 38 percent from the same period last year.

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In January, ArvinMeritor announced that difficulties in the credit markets and continued volume weakness in most markets prevented the sale of Body and Chassis as one entity at an acceptable value. Therefore, the company has remained intensely focused on managing both the Body Systems and Chassis businesses for maximum cost efficiencies, it says.


The firm also said that it has $7m of outstanding receivables subject to Chrysler US bankruptcy proceedings. Of that amount, only $3m are expected to be outside of administrative claim status.


ArvinMeritor said it will be impacted by Chrysler’s announcement to idle its facilities during the bankruptcy process. The company anticipates a 30-60 day shutdown to have a negative impact on EBITDA in the range of $2m to $5m.


While current market conditions remain depressed, North America and South America are showing signs of stabilisation, ArvinMeritor maintains, and certain markets in Asia are indicating slight signs of improvement, offsetting continued declines in Europe.


For the next quarter the company expects revenue to be ‘about flat’ but loss per share to be greater.


“ArvinMeritor was proactive in taking aggressive steps to preserve liquidity through this downturn and continues to be diligent in maintaining all of the actions put into place in the past six months,” said McClure. “We will continue to operate with that same rigour, while maintaining a constant focus on the company’s financial position. We anticipate that we will begin to see positive signs of improvement in some markets during the second half of this year.”