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ArvinMeritor Merger Creates Major Player

THE MERGER of Arvin Industries Inc and Meritor Automotive Inc created a premier $7.5-billion global transportation industry supplier of a broad range of integrated systems, modules, and components, serving light vehicle, commercial truck, trailer and specialty original equipment manufacturers, and related aftermarkets. The merger was announced July 10.

Through a larger, more diversified product, service, and market portfolio, ArvinMeritor offers a broader range of solutions and services for original equipment manufacturers (OEM), new vehicle, and aftermarket end-users. The combined operation will be a much stronger global competitor, according to company officials.

ArvinMeritor has formed a new light vehicle systems (LVS) corner module assembly group to integrate its complete line of undercarriage components and to market the corner module to light vehicle OEM customers. The new group's goal is to be an industry-leading tier one supplier of coil springs, shock absorbers, struts, stabilizer bars, and torsion bars.

New Environmental Protection Agency (EPA) proposals, aimed at reducing heavy truck and bus emissions, present a significant opportunity for ArvinMeritor Exhaust Systems to transfer proven emissions-reduction and acoustics technologies from the light vehicle markets to the commercial vehicle side.

The EPA's new regulations call for significant reductions in diesel sulfur, nitrogen oxide, and non-methane hydrocarbon levels in heavy commercial trucks over the next 10 years. Developing new systems to meet these more stringent emission standards is a major area of potential growth for ArvinMeritor.

"Our merger links Meritor's strong and long-standing understanding of the global commercial vehicle industry and our many customer relationships with Arvin's proven emissions-management technology, creating an expertise unrivaled among commercial heavy-duty exhaust suppliers," said Wes Vance, president, ArvinMeritor Exhaust Systems. "With our product and engineering expertise, we have a significant opportunity to take a leadership role at the very time market forces are demanding new levels of emissions performance."

According to Vance, Exhaust Systems has proven its expertise to balance engineering with enhanced performance and noise reduction against the packaging and weight restrictions of heavy-duty trucks. The new company already has a variety of technologies that produce weight and performance improvements, which will help the OEM customers in achieving the new emissions standards.

"Any supplier can meet the emissions standards, but then diesel mileage becomes a problem," said Vance. "And any supplier can meet the sound requirements, but then weight increases. Our proven specialty is overcoming both of these obstacles."

In addition to new systems, retrofit emissions systems for existing vehicles in Europe offer another substantial business opportunity. All heavy-duty trucks in Europe must meet Stage IV restrictions by 2006.

To begin the process, ArvinMeritor has scheduled meetings with major customers to determine how best to quickly deliver solutions for their new emissions needs.

ArvinMeritor's new online replacement parts catalog and ordering system, which is expected to launch during the fourth quarter, will significantly speed turnaround for the company's commercial vehicle aftermarket distributors and OEM service customers. Later, it also will handle replacement parts ordering for the company's light vehicle aftermarket customers.

The new ArvinMeritor aftermarket global e-commerce web site will initially catalog Meritor and Euclid brand parts. It is an enhancement of Xpressway CD, an electronic catalog featuring details and photos of more than 100,000 ArvinMeritor commercial vehicle aftermarket products.

While anyone can browse the online parts catalog, only authorized, established US parts outlets with valid ID, password, and customer profile on record can place orders during the first phase of the program. Services include stock orders or emergency orders for customers that need repair parts within 24 hours.

Customers that order through the ArvinMeritor system will benefit from web access to parts 24 hours a day, seven days a week. The system uses real-time links to distribution centers, where customers can check the price and availability of products before they order. Once an online order is submitted, the system allocates the parts for that specific customer and releases the parts for shipment. Later, customers can check the status of these orders and track shipments through links to freight carrier web sites.

Developers of the commercial vehicle aftermarket system also are creating subsequent stages of the system that will integrate ArvinMeritor light vehicle aftermarket products, offering more ordering options for OEM customers and access for Canadian customers.

ArvinMeritor's roll coater business is actively pursuing new opportunities in the light vehicle aperture (roofs and doors), commercial trailer products, and bus and coach markets. As a result, the business sees an immediate opportunity to capture new sales for this innovative process that is now available for vehicle body applications.

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