DETROIT -- ArvinMeritor Inc. posted a nearly $1 billion net loss on impairment, tax and other charges in its first fiscal quarter with revenue dropping more 17 percent from the same period last year.
The suburban Detroit automotive and commercial vehicle supplier posted a net loss of $991 million on revenue of $1.4 billion in its first quarter, compared with a net loss of $12 million on revenue of $1.7 billion in 2008. Excluding one-time items, the company lost $56 million in the quarter.
ArvinMeritor also said its board suspended dividend payments. It estimated the move would save $29 million annually. The company's shares closed today at $1.41, down 40 cents or 22.1 percent.
CEO Charles Chip McClure said the companys performance was largely due to unprecedented drops in global vehicle production volumes for its light vehicle systems and commercial vehicle systems units.
Were literally experiencing a total transformation of our industry, said McClure Wednesday in a conference call.
As it continues to cut costs, the company suspended 401(k) matching contributions for all employees and extended shutdowns and reduced work weeks at all of its plants.
Salaried executives also took a 10 percent salary cut and all other U.S. salaried employees saw their wages cut 5 percent, and the board of directors also agreed to take a 10 percent pay cut.
McClure said in the conference call that the company was considering a sale of its Light Vehicle Systems technical center and headquarters building in Detroit, which opened in 2004.
As ArvinMeritor works towards a sale of its LVS chassis and body systems units, it cut 100 salaried positions in the unit in January and eliminated the LVS divisional organization. LVS cost cuts are expected to save the company $57 million annually.
ArvinMeritor announced last spring that it planned to spin-off its LVS business unit as a standalone company called Arvin Innovation Inc., which was expected to generate $2.7 billion to $2.9 billion by 2010.
But the company scrapped the spinoff in October with plans to sell the unit as vehicle sales and production hit their lowest levels in decades and credit market turmoil made buyers and financing scarce.
ArvinMeritor said its plans to sell the unit as a whole were nixed in an early-January announcement, opting instead to try and sell the chassis systems division and body systems division separately while keeping the light vehicle wheel-making business.
The company also said in January that Phil Martens, the companys light vehicle systems president and one-time heir to the planned Arvin Innovation spin-off, left the company to pursue other opportunities.
No time frame was given for the sale of the LVS chassis and body systems units. McClure said body systems would be sold when shareholders could get a good return and the company is pursuing multiple actions to sell the chassis systems, but did not elaborate in the conference call.
For 2009, ArvinMeritor expects commercial vehicle production in its main North American, South American and European markets to be down 27 percent to 45 percent. The company also expects 9.2 million light vehicles to be built in North America this year, down 33 percent from 2008.
ArvinMeritor had $158 million in cash and cash equivalents on hand at the end of its first quarter and expects to comply with all of its credit agreements for the remainder of the year.
ArvinMeritor, based in suburban Detroit, ranks No. 26 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $6.40 billion in 2007.
The company makes a wide variety of parts for light vehicles and trucks, including sunroofs, truck axles, driveline systems, suspension systems, trailer products, braking systems, and transmissions.
Reuters contributed to this report