ArvinMeritor bills for commodity price increases

TROY, Mich. — In an effort to offset the surging cost of steel and oil, ArvinMeritor is introducing a new, monthly commodity surcharge starting June 1, 2008.

“We have a portfolio of complex products that require varying levels of commodities. We plan to adjust the surcharge as appropriate for each product line,” said Chip McClure, chairman, CEO and president of ArvinMeritor.

The Commercial Vehicle Systems and Light Vehicle Systems business groups have analyzed the situation and its potential effect on business,” said McClure. “Results of that analysis clearly indicate that immediate actions are necessary.”

In ArvinMeritor’s second-quarter earnings report issued last month, the company stated that the unprecedented volatility in the commodity markets — including a global shortage of scrap steel, a rapid escalation in the price of critical raw materials such as iron ore, coking coal and metal alloys, and higher fuel and energy costs — would require it to take recovery actions to mitigate a significant impact to the company’s financial results.

“We remain diligent in the performance improvement actions and cost reduction initiatives we are driving throughout our worldwide operations, however, these will not be enough to offset the level of cost increases we are experiencing,” McClure continued.

The company has begun discussions with its customers prior to implementing the surcharge.

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