1. 2008 Morgan Stanley
Global Automotive
Conference
Phil Martens
President, Light Vehicle Systems
1
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; the
outcome of actual and potential 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. ArvinMeritor a Most Admired Company
• Outside validation from March 17 edition of
Fortune magazine
• ArvinMeritor ranked number #3 among
the best global automotive suppliers
• Rated for 8 key attributes of reputation:
1. Innovation
2. People management
3. Use of corporate assets
4. Social responsibility
5. Quality of management
6. Financial soundness
7. Long-term investment
8. Quality of products/services
3
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. Light Vehicle Systems
is a globally integrated
Tier 1 systems supplier with
a robust business portfolio
that limits geographic and
customer risk exposure
5
6. Light Vehicle Systems
CHASSIS BODY
Roof
SYSTEMS SYSTEMS
Systems
Latches
Window
Vehicle
Regulators
Dynamics
Door Modules
Springs
Motors
Suspension Modules
smart systems™ smart systems™ smart systems™ smart systems ™ smart systems™ smart sys
Steel Wheels
WHEELS
6
7. Characteristics of the Best Automotive
Suppliers
1. Truly global business model and footprint
2. A diverse product portfolio of new technologies
3. Diverse portfolio of leading customers and
platforms
LVS positioned to be one of the best
7
8. Global Business Model and Footprint
Geographic Sales Mix
2005 2007
AP AP
SA
4% 6%
5%
SA
10%
North
North
America
America
38%
50%
Europe
Europe
46%
44%
Shifting global reach and capability
8
9. Full Product Pipeline
2008 2009 2010
HIP NAL LER
Body Systems
EDCM
PSD
NAM
NEM
LFI
Launching 45 CG
Launching 45
programs
programs
in 2008
in 2008 Launching 30
Launching 30
Chassis
AA programs
programs
50% of LVS
50% of LVS
in 2009
AS in 2009 revenue projected
revenue projected
AD
to come from new
to come from new
products by 2010
products by 2010
Wheels
780
HVA HVA
CLAD
CC
EUF
smart systemsTM products coming to market by 2010
9
10. Strength in Customer and Platform Mix
Customer Mix Top Platforms Key Vehicles
(2007 Value-Added Sales)
VW PQ34/35 Golf, Touareg, Audi A1
Other
Hyundai NF/CM Santa Fe, Sonata
Honda
VW PQ24/25 Polo, Ibiza, Audi A2
Toyota
VW Renault C Megane, Scenic
Fiat
issan
Ford Europe C1 Focus, C-MAX, S40/V50
BMW
Dodge DR-DE Ram
Hyundai
Chrysler VW 7L Audi Q7
Renault
Peugeot PF1 207
Ford
GM
GME Gamma Opel Corsa
PSA
Chrysler WK Cherokee, Commander
High concentration with customers based outside N.A.
10
11. The Power of Capability
Global Business Model
Leading global customer seeks moon roof supplier-partner with engineering
and manufacturing strength in Asia, Europe and North America
Products and Pipeline
Needs innovative new product
with added features and
competitive cost
Right Customers & Platforms
ArvinMeritor sourced for new global program
using global motor architecture; grows with hot new platform with key
Asian derivative; all sourcing in LCCC, including new plant in China
Leadership in all three areas allows us to win
11
12. Delivering on Priorities for 2008
1. Radically improve cost base through restructuring
of supply chain and manufacturing network.
2. Improve Free Cash Flow by institutionalizing
ArvinMeritor Production System (APS), program
management and working capital improvement
programs.
3. Capitalize on aggressive growth opportunities in
emerging regions with profitable expansion plans.
4. Global alignment of LVS businesses with market-
leading OEMs.
5. Improve long-term earnings power of portfolio through
launch of smart systems™ applications.
Constancy of purpose
12
13. 1. Radically Improve Cost Base
Through Restructuring
Difficult Decisions: Fix, Sell or Close Roofs
• Few competitors, technology
Why fix?
leadership, good customer mix,
significant growth opportunities
• Eliminate $20 million annual
Goal
operating cost
• Maximize synergies with Doors, close
Actions
Frankfurt plant, consolidate global
engineering through off-shore
engineering center, revisit customer
terms, win new business
• Eliminated 160 positions in Germany
Results
and France through consolidation of
shared functions, achieved
benchmark ER&D and SG&A levels,
100% of Roofs capacity in LCCCs
Aiming for breakeven in 2008 and profitability in 2009
13
14. 1. Radically Improve Cost Base
Through Restructuring
Footprint Optimization and Increasing
Engineering Capability in Growth Regions
N. America S. America Europe Asia Pacific
•Toronto •Brussels
•Restructure •Frankfurt
Out some labor
agreements
Production •Expand •Expand Brazil •Expand •Changchun
Puebla Body Systems Lozorno •Pune
In •Expand San •Extend •Romania •Waigaoqaio
Luis Potosi offering from •Wuhu
Venezuela JV
•S. America •Consolidate •Offshore
Tech Center Body Engineering
Engineering
Engineering Center
Dramatic shift to LCCCs: 7 new facilities & 4 expansions
14
15. 1. Radically Improve Cost Base
Through Restructuring
Record Year for Cost Reductions
• First quarter labor and burden performance
substantially exceeded prior year’s
achievement.
• Material performance more than 100% higher
than the previous year
• APS overdelivering
• Stretching for additional material cost
reductions
Operational improvements accelerating and improving bottom line
15
16. 1. Radically Improve Cost Base
Through Restructuring
Addressing Steel Costs Head-On
• Steel suppliers asking for substantial price increases,
but supplying according to long-term contracts
• Planning for cost increase when contracts reset
• Exploring alternate supply
• Good track record of recovery with most customers,
including some indexed contracts
• Challenging discussions ahead with other customers
Will do what is needed to protect our business
16
17. 2. Improve Free Cash Flow
2008 Cash Flow Recovery Actions
• Scour inventories for efficiencies
– Eliminate warehousing costs
– Streamline pipeline costs
– Implement more consigned inventory
– Increase turns in plants through APS
• Heightened cash management with customers
– Enforce terms of existing contracts
– Negotiate better terms
– Aggressive actions on past due accounts receivable
– Carefully monitoring customer credit-worthiness
• Seasonal factors will benefit second half of year
Reversing Q1 working capital outflow
17
18. 3. Profitable Growth in Emerging
Markets
Expanding Rapidly in Asia Pacific
• Able to offer the full product
portfolio in China
• Launching 20 new programs
in FY 2008
• Building 3 plants
– Chassis JV with Chery in
Wuhu - $100 million
projected by 2010
– Body Systems roofs facility
in Waigaoqiao, China
– Body Systems doors
facility in Pune, India
• Tech Center opening in Pune,
India
18
19. 3. Profitable Growth in Emerging
Markets
Growing from Strong Base in South America
• YTD sales up 24% in Brazil
– Mercosur now the world's 6th largest automotive market
• Potential to double business from all
LVS businesses within region
• Leverage existing footprint in the
region to grow presence
– Wholly-owned facilities in Brazil
(steel wheels and body system
components)
– Existing JV partnership in Andean
market (chassis components and
modules)
• Announcing new technical center
New LVS Innovation & Technical
Center for LVS South America in
Limeira, Brazil
19
20. Light Vehicle Systems: Subtitle
4. Global Alignment with the Right
OEM Customers
Hyundai: A Strategic Partner Globally
• Already 3rd largest customer in North America before
recent awards
• Also supplying a significant amount of business in Korea
• New awards expand the relationship and leverage global
capability
– Four million smart systemsTM window motors per
year, benefiting from global commonality and reach
– First North America application of smart systemsTM
Highly-Integrated Plastic (HIP) door module for the
new Hyundai Sonata
– Next generation corporate Hyundai Global Latch to be
launched on Sonata; adaptable to other platforms
Innovation and delivery build strategic relationships
20
21. 5. Improve Portfolio through Launch
of smart systems Products
Capability, Collaboration and Commercialization
Capability
• Globally networked engineering team focused on improving
vehicle systems’ performance and integration
• Emphasis on materials engineering generating value
– Example: New crash-resistant material for panoramic roofs
improves safety and integrates luxury features
Collaboration
• Development contracts for advanced chassis products with four
OEMs from multiple regions
– Example: Military chassis applications addressing vertical
load management
Commercialization
• Launching 45 new programs this year, including the HIP module
for both North America and Europe, a new Chinese latch and
global large-opening roof system production
21
22. 5. Improve Portfolio through Launch
of smart systems Products
Composite Coil Spring
• Improved fuel economy through weight reduction
– 50 to 60% weight reduction vs. steel equivalent
– Typical weight savings for a passenger car with
four coils is 12 – 14 lbs.
– Typical weight savings for a light truck with two
coils is 12 – 15 lbs.
• Material cost and durability are competitive with steel
• Corrosion protection is not required
• Environmentally friendly: no quench and temper
• Flexible design
• Scalable manufacturing can be located close to OEM
Innovation begins with understanding customer needs
22
23. Delivering on Priorities for 2008
1. Radically improve cost base through restructuring
of supply chain and manufacturing network.
2. Improve Free Cash Flow by institutionalizing
ArvinMeritor Production System (APS), program
management and working capital improvement
programs.
3. Capitalize on aggressive growth opportunities in
emerging regions with profitable expansion plans.
4. Global alignment of LVS businesses with market-
leading OEMs.
5. Improve long-term earnings power of portfolio through
launch of smart systems™ applications.
Constancy of purpose
23
24. Financial Review
Mary Lehmann
Senior VP, Strategic Initiatives, and
Treasurer
24
25. 2008 Industry Planning Assumptions
Calendar Year Basis
North America Other Regions/Metrics
1.5% 1.7%
U.S. GDP growth 2.2% Europe GDP growth 1.9%
U.S. light vehicle industry sales W. Europe light vehicle industry
15.5 17.1
15.5 17.1
(millions) sales (millions)
Europe medium & heavy truck
220-240 560-570
Class 8 truck production (000) 235-255 540-550
production (000)
180-195
160-175 Europe trailer production
Class 5-7 truck production (000) 180 165
Asia medium & heavy truck
195-210
Trailer production (000) 250 1,340
production (000)
Much
CV aftermarket industry growth
Flat Steel price change Increasing
ex. pricing Worse
South America light vehicle
Higher
MRAP production 11,900 3.8
production (millions)
25
26. 2008 Internal Planning Assumptions
Year-to-Date Trends
Initiative Progress
Improve CVS Europe Operational Effectiveness
Performance Plus Cost Reductions
Direct Material
Overhead
Manufacturing Labor & Burden
Commercial Vehicle Aftermarket Growth
Commercial and Legal Dispute with Customer
26
27. Performance Plus Achievement of
Run-Rate Cost Savings in 2008
Annualized EBITDA Impact from Cost Saving Actions
$ Millions
240
$232M
Ideas that will save
220 Team Targets
$75 million per year
200 had been
$197M
implemented by the
180 end of February December
Implementation
Plan
160
Period savings for
140
the first fiscal
Risk Adjustment
quarter were $12
120
$115 M
million
100
80
60
$75M Period Savings
40
20
0
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct
27
28. Forecast Update
Fiscal Q2 Compared to Q1
Performance Plus Cost Reductions
+
Direct Material
+
Overhead
+
Labor & Burden
+
Europe Truck Production and Productivity
+
Military, Off-Highway and Aftermarket
+
Normal Tax Rate
-
Steel Prices
• Reaffirming full-year guidance at $1.40-$1.60 EPS from continuing ops
before special items and cash flow guidance of $(75)-$(125) million
Operational improvements overwhelming market factors
28
