Meritor Forms Repair Shop Network, Posts 1Q Gain in Net Income
Meritor made the announcement here Jan. 27 during Heavy Duty Aftermarket Week. It also announced several new products and the launch of an effort to assist military veterans.
The Troy, Michigan-based company supplies drivetrain, mobility, braking and aftermarket solutions for the commercial vehicle and industrial markets.
Separately, Meritor said its first-quarter profit surged, and it announced a seven-year supply agreement with truck maker Paccar Inc.
The Paccar agreement “secures preferred product positioning for rear axles in North America and Australia,” Meritor said, adding that it now has enhanced optional positioning for brakes, drivelines and front axles.
“We are excited to enter into this long-term agreement with Paccar and further strengthen our relationship in such a significant way,” Meritor CEO Ike Evans said in a statement.
Bellevue, Washington-based Paccar makes Peterbilt and Kenworth brand trucks in North America.
Officials at Meritor said the approved repair shops will carry company signage and promote all of its brands.
“Fleets taking their vehicles to a garage approved for the Meritor Service Point program will benefit from Meritor parts that are engineered for quality and installed by technicians trained with Meritor’s deep product knowledge,” said Terry Livingston, general manager of category management for the aftermarket.
The garages will need to have current tools and equipment for Meritor-approved services, and technicians must train with Meritor either online or in person.
Livingston also said the shops will continue to purchase Meritor products from distributors as they have been.
On Jan. 28, Meritor reported first-quarter fiscal 2015 earnings of $29 million, or 29 cents per share, compared with $11 million, or 11 cents, a year ago. Revenue for the quarter, ended Dec. 31, slipped to $879 million from $900 million.
Meritor’s commercial truck and industrial sales declined $24 million to $703 million on lower truck production in Europe and South America as well as lower revenue from Meritor’s defense business, which was partially offset by gains in the North American Class 8 market.
That segment’s earnings before interest, taxes, depreciation and amortization rose $3 million to $56 million.
Meritor lowered its fiscal-year 2015 revenue guidance slightly, to $3.7 billion from $3.8 billion, while holding its adjusted earnings-per-share outlook at $1.20 to $1.30. And the company said that capital expenditures would be in the range of $80 million to $90 million.
“Securing new contracts, such as with Paccar, is a result of the effort the Meritor team has put forth to drive the company toward greater shareholder value,” Evans said.
Meritor also announced it is adding three new wheel-end products: the Doctor Preload Bearing Adjustment Tools, Temper-Loc spindle nuts and Meritor-brand hubcaps.
The adjustment tools will reduce seal failures and increase tire life, said Tim Bauer, director of remanufacturing.
Meritor also announced the expansion of its air disc brake product line, along with an updated parts catalog.
The new selection of AllFit products includes pads, calipers, rotors, brake chambers and service kits covering the most widely used air disc brake models.
It also said it was celebrating the 75th anniversary of its Euclid-branded suspension product line by adding 200 new parts to its portfolio of more than 2,000 in-stock parts.
Meanwhile, a significant portion of the press conference was devoted to promoting the “Shoes for Soldiers” program, which helps severely wounded, injured or ill veterans transition to the business community.
The company said it will donate up to $50,000, which includes a $20,000 match from the Meritor Trust Fund, to the Boise, Idaho-based Wyakin Warrior Foundation.
Veteran Greg Nickel, who was wounded in combat and witnessed the death of several fellow servicemen, shared with journalists his own difficulties, including a brief stint in jail.
However, he credited the program for helping get him back on track, and he is now a staff member with the program.
The media event began with a moment of silence in remembrance of Mike Pennington, the longtime Meritor public relations and trucking industry spokesman, who died unexpectedly in December. Craig Frohock, vice president of aftermarket and trailer, said Meritor was creating the Mike Pennington Excellence Award, which will be given to a team member each year who “demonstrates excellence in marketing and communications.”
Additionally, Frohock said Meritor will make an annual donation in Pennington’s name to Northwood University’s aftermarket management program.
Staff reporter Michael G. Malloy contributed to this story.
