2008 AANY
          Conference

                 Chip McClure
    Chairman, CEO and President




1
Forward-Looking Statements
      This presentation contains statements relating to future results of the company (includin...
Key Messages

     • N.A. Class 8 industry showing some favorable signs
        – November tonnage up slightly year-over-y...
Customer Base
    2007 Sales

    Commercial Vehicle Customers                 Light Vehicle Customers
                   ...
LVS Business Portfolio
    2007 Sales
                                  $2.2 Billion
          Geographic Mix             ...
CVS Business Portfolio
    2007 Sales
                                    $4.2 Billion
          Geographic Mix           ...
Challenges

    • North American economic outlook
       – Weak growth
       – Uncertainty about second half of the year
...
2008 Industry Planning Assumptions
    Calendar Year Basis


                 North America                      Other Reg...
North America Class 8 Truck Net New
    Orders
                                60,000
     Net new orders per month




  ...
November Freight Tonnage
  Seasonally adjusted monthly index, 2000 = 100.0


   125                                       ...
North America Class 8 Production

              FY2007 = 246K          FY2008 = 210K - 230K
                 vehicles     ...
Opportunities

        • Capitalize on growth in European commercial
          truck market
        • Prepare for upturn i...
Priorities

         1. Implementing Performance Plus cost
            improvements

         2. Continuing global growth ...
Performance Plus Profit Improvements
     Not Linked to U.S. Economic Growth
     • Performance Plus Overhead initiatives ...
Grow Globally
     •   Expansion of axles joint venture in India
     •   Launch of Chery joint venture
     •   Capacity ...
Commercial Vehicle Aftermarket
     • Remanufacturing
        – Acquired Mascot, a Canadian remanufacturer with 6 producti...
Growing Relationship with Hyundai
     • Announced a new award at Analyst Day on December 11
         – Over four million ...
Performance Plus - Specialty Products Growth

     • China off-highway business
       continues to be strong
     • New M...
FAQ: Insider Buying and Selling
     • On December 12, a series of Forms 4 were filed showing
       sales of small amount...
Wrap Up

     1. Continue emphasis on operational improvement through
        ArvinMeritor Production System and improved ...
Q&A




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arvinmeritor 2008_AANY_ArvinMeritor_FINAL_011708

  1. 1. 2008 AANY Conference Chip McClure Chairman, CEO and President 1
  2. 2. Forward-Looking Statements This presentation contains statements relating to future results of the company (including certain projections and business trends) that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by words or phrases such as “believe,” “expect,” “anticipate,” “estimate,” “should,” “are likely to be,” “will” and similar expressions. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to global economic and market cycles and conditions; the demand for commercial, specialty and light vehicles for which the company supplies products; risks inherent in operating abroad (including foreign currency exchange rates and potential disruption of production and supply due to terrorist attacks or acts of aggression); availability and cost of raw materials, including steel and oil; OEM program delays; demand for and market acceptance of new and existing products; successful development of new products; reliance on major OEM customers; labor relations of the company, its suppliers and customers, including potential disruptions in supply of parts to our facilities or demand for our products due to work stoppages; the financial condition of the company’s suppliers and customers, including potential bankruptcies; possible adverse effects of any future suspension of normal trade credit terms by our suppliers; potential difficulties competing with companies that have avoided their existing contracts in bankruptcy and reorganization proceedings; successful integration of acquired or merged businesses; the ability to achieve the expected annual savings and synergies from past and future business combinations and the ability to achieve the expected benefits of restructuring actions; success and timing of potential divestitures; potential impairment of long-lived assets, including goodwill; potential adjustment of the value of deferred tax assets; competitive product and pricing pressures; the amount of the company’s debt; the ability of the company to continue to comply with covenants in its financing agreements; the ability of the company to access capital markets; credit ratings of the company’s debt; the outcome of existing and any future legal proceedings, including any litigation with respect to environmental or asbestos-related matters; product liability and warranty and recall claims; rising costs of pension and other post-retirement benefits and possible changes in pension and other accounting rules; as well as other risks and uncertainties, including but not limited to those detailed herein and from time to time in other filings of the company with the SEC. These forward- looking statements are made only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as otherwise required by law. 2
  3. 3. Key Messages • N.A. Class 8 industry showing some favorable signs – November tonnage up slightly year-over-year – December net new orders of 20,800 represent third consecutive month of 20,000+ • Light vehicle industry production forecast holding up, but with some signs of weakness • Continuing to execute strategies to improve cost position, optimize capacity and grow in key areas 3
  4. 4. Customer Base 2007 Sales Commercial Vehicle Customers Light Vehicle Customers Volkswagen 65% 7% Chrysler Commercial Other CVS 6% 18% Vehicle Asian Based OEMs 5% Ford 1% Ford 2% PSA 2% Volkswagen 2% General Motors 1% General Motors 2% Fiat 3% PACCAR 3% Other LVS 12% International 4% 35% Light Asian Based Vehicle OEMs 7% Volvo 16% Daimler 9% 4
  5. 5. LVS Business Portfolio 2007 Sales $2.2 Billion Geographic Mix Customer Mix (Value-Added Sales) (Value-Added Sales) Other Asia South Pacific Honda America 6% Toyota 10% VW Fiat North Nissan America BMW 38% Hyundai Chrysler Europe Renault 46% Ford GM PSA 5
  6. 6. CVS Business Portfolio 2007 Sales $4.2 Billion Geographic Mix Customer Mix South America Asia 6% Pacific 11% Volvo Group Aftermarket, North Trailers and America Other Europe 54% 28% Daimler Trucks ITE Hino XCMG Tata Ashok Leyland Fiat/Iveco VW PACCAR GM BAE 6
  7. 7. Challenges • North American economic outlook – Weak growth – Uncertainty about second half of the year • Fully loaded management agenda – Performance Plus implementation – Execution of European operational improvements – Capacity additions – Continuing efforts to right-size • Allocating capital resources among high-return projects – Capacity, efficiency actions, new ventures , new products 7
  8. 8. 2008 Industry Planning Assumptions Calendar Year Basis North America Other Regions/Metrics U.S. GDP growth 2.2% Europe GDP growth 1.9% U.S. light vehicle industry W. Europe light vehicle 15.5 17.1 sales (millions) industry sales (millions) Europe medium & heavy Class 8 truck production (000) 235-255 540-550 truck production (000) Class 5-7 truck production 180 Europe trailer production 165 (000) Asia medium & heavy truck Trailer production (000) 250 1,340 production (000) CV aftermarket industry Flat Steel price change Increasing growth ex. pricing South America light vehicle MRAP production 11,900 3.8 production (millions) 8
  9. 9. North America Class 8 Truck Net New Orders 60,000 Net new orders per month 50,000 40,000 2005 30,000 2007 20,000 2006 10,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec December is the third straight month with over 20,000 new orders Source: ACT Research 9
  10. 10. November Freight Tonnage Seasonally adjusted monthly index, 2000 = 100.0 125 3 MMA Monthly 10-Year Trend • Nov. ’07 index – 112.1 Up 0.9% from October 2007 120 Up 3.5% from November 2006 115 110 105 100 Jan Apr Jul Oct Jan Apr Jul Oct 2006 2006 2006 2006 2007 2007 2007 2007 November freight was somewhat encouraging Source: ATA
  11. 11. North America Class 8 Production FY2007 = 246K FY2008 = 210K - 230K vehicles vehicles 89 310 71 70 65 60 50 220 44 43 42 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY FY 2009 2010 CY2007 = 200K CY2008 = 235K – 255K vehicles vehicles 11
  12. 12. Opportunities • Capitalize on growth in European commercial truck market • Prepare for upturn in North America • Leverage assets and team in Asia to improve business structure globally • Pursue OPEB funding deal 12
  13. 13. Priorities 1. Implementing Performance Plus cost improvements 2. Continuing global growth initiatives 3. Expanding Commercial Vehicle Aftermarket 4. Growing business with Asian OEMs 5. Increasing participation in specialty commercial vehicles 13
  14. 14. Performance Plus Profit Improvements Not Linked to U.S. Economic Growth • Performance Plus Overhead initiatives – not volume- dependent • Performance Plus Direct Material Optimization – shifting resources to implement Europe actions first • Performance Plus Footprint Optimization – announced closure of Brussels and Frankfurt and opening of new plant in Romania as part of Body Systems transformation • Performance Plus Lean Manufacturing – accelerated implementation in Europe to support higher volume requirements • Capacity actions – will increase European operational efficiency in second half of the year • Performance Plus Product Strategy – improvements in terms with some customers outside the U.S. 14
  15. 15. Grow Globally • Expansion of axles joint venture in India • Launch of Chery joint venture • Capacity expansion for China off-highway axles and brakes • Launch of new plant in Pune, India to support light vehicle customers • Launch of new plant in Romania to support Dacia and export • CVS capacity expansion to support customer sales to Central and Eastern Europe • Launch of new gears and axles plant in Monterrey, Mexico • Significant growth in Venezuela through new program with a global OEM 15
  16. 16. Commercial Vehicle Aftermarket • Remanufacturing – Acquired Mascot, a Canadian remanufacturer with 6 production facilities and 25 distribution points, in December – Provides capability and IP to remanufacture non-ARM components – Greatly enhances regional distribution for next-day availability – Improves access to non-ARM cores • Europe – Grew sales 18% last year, even though supply was constrained – Opportunities for organic and inorganic growth • Asia – Distribution in the region currently served through Australia – Become a strong commercial vehicle aftermarket provider with a recognizable brand in India and China – Opportunities for both organic and inorganic growth 16
  17. 17. Growing Relationship with Hyundai • Announced a new award at Analyst Day on December 11 – Over four million smart systems™ GM3 window regulator motors worldwide per year – Launches early 2010 • Announcing two new awards for the new Hyundai Sonata launching in the first half of 2010 – An innovative plastic door module that replaces the current steel version saving up to 25% in weight • First application of plastic door module technology at Hyundai • First such ArvinMeritor product in North America – A next generation corporate Hyundai Global Latch • Adaptable global concept based upon robust ArvinMeritor functional modules – Both to be manufactured in North America with an annual volume of over 700k 17
  18. 18. Performance Plus - Specialty Products Growth • China off-highway business continues to be strong • New MRAP awards late in December added to 2008 production, with high share going to our customers • Some substitution between MRAP and other, pre-existing programs 18
  19. 19. FAQ: Insider Buying and Selling • On December 12, a series of Forms 4 were filed showing sales of small amounts of stock by executives – Sales represented withholding tax amounts for vesting under executive stock programs – Executed by plan administrator under pre-specified plan rules and elections • Executives have strong ownership guidelines • Short-term compensation tied to EBITDA and cash flow • Long-term compensation tied to ROIC and total returns to shareholders – Half of long-term compensation paid in stock 19
  20. 20. Wrap Up 1. Continue emphasis on operational improvement through ArvinMeritor Production System and improved capacity management 2. Radically improve cost base through Performance Plus • Relentless reduction of overhead costs • Material optimization and other supply chain improvements • Restructuring of manufacturing network 3. Capitalize on growth opportunities in specialty, aftermarket and emerging regions 20
  21. 21. Q&A 21
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