DOW JONES NEWSWIRES ArvinMeritor Inc. (ARM) said its cost cutting effort will save more than previously planned as the company struggles to conserve cash to meet its debt covenants.
The auto-parts industry has been seen a sharp downturn in demand and have been cutting production, jobs, dividends and pay to stay afloat.
In February and March, ArvinMeritor said it implemented an additional 250 job cuts, bringing the total to roughly 1,800 since October. It expects these and other moves will save $95 million a year, in addition to $335 million is savings outlined in February.
Then, as ArvinMeritor unveiled a fiscal first-quarter loss, the company said working capital was expected to be a drain on liquidity in the current quarter after what it described as "very late changes to production schedules" by customers left it with higher inventory. Auto makers have been slashing production in light of decades-low sales.
Since October, ArvinMeritor's cost-cutting moves have also included closing two Canadian plants, cutting salaries, suspending its 401(K) matching contributions in the U.S., extending plant shutdowns and slashing its dividend.
Amid the woes, the company earlier this year abandoned plans to spin off its auto parts unit as a separate business unit. ArvinMeritor also has a commercial-vehicle business.
The company's shares closed Thursday at $1.20 and didn't trade premarket. The stock is down 58% this year.
-By Tess Stynes, Dow Jones Newswires; 201-938-2473; tess.stynes@dowjones.com
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Publié le 13 Avril 2009 Copyright © 2009 Dowjones