LOUISVILLE, Ky. (April 4, 2005) — ArvinMeritor’s new boss says his company is no longer experiencing the major supply chain disruptions much of the parts and components industry was battling over the last couple years.

Charles “Chip” McClure, chairman, CEO and President of ArvinMeritor, told journalists at the Mid-America Trucking show in Louisville last week business in the heavy-duty market is strong again. The company has seen gains of 30 percent in class 8; 20 percent in medium duty; and 15 percent in the trailer business.

While he attributes the surge mainly to strong demand and growing freight volumes, he did add the raw materials shortage that was keeping the reigns on suppliers is now coming under control. “What we found is we can overcome this issue,” he said.

China’s — and to a lesser extent, Russia’s — insatiable appetite for raw materials such as steel, aluminum, rubber, and concrete has pinched supply of finished products in the West. It’s estimated that on any given day, as high as 20 per cent of bulk freighter capacity in the world is booked for China.

The result has had a ripple effect on commodity supplies and prices all over the world. North American supply chains, including in trucking and automotive sectors, have been hit as hard as any industry. Truckmakers and component suppliers were having trouble getting steel, and when they did get their hands on it, the price was as much as 40 percent higher.

Although McClure doesn’t foresee steel prices falling to what they were two years ago, he does think the spike has steadied. He said that investing in composite materials and signing long-term deals with customers have helped ArvinMeritor overcome the raw materials crunch.