ArvinMeritor Says Cuts Have Saved $430 Million

Truck components maker ArvinMeritor said Monday it has saved about $430 million on an annual basis in cost-reduction measures taken since 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 organization to the lower capacity levels,” said Chip McClure, the company’s chairman and chief executive officer.

In February and March, ArvinMeritor implemented initiatives, including the reduction of about 250 employees and other cost-reduction actions, that will result in annual savings of $95 million.

That includes $64 million in fiscal year 2009 which is incremental to the $335 million in savings the company announced in its first-quarter earnings report in February.

The cost-cutting measures have included:

• Workforce reduction of more than 1,800 global employees;

• Plant-level furlough programs, including government supported programs;

• The closure of two manufacturing facilities (Tilbury and Milton, in Ontario, Canada);

• Pay reductions for salaried employees worldwide, which was achieved through base salary adjustments and/or curtailed production schedules;

• Eliminating matching contribution to the U.S. 401 (k) plan;

• Suspended merit increases for fiscal year 2009;

• Reduced capital spending;

• Extended shutdowns at all plants; and

• Elimination of company-paid education and training programs.