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Meritor Announces Restructuring Actions

3 June 1999

Meritor Announces Restructuring Actions To Further Enhance Operational Efficiencies and Expand Margins

    TROY, Mich., June 3 -- Meritor Automotive Inc.
today announced several restructuring actions that it expects will
significantly improve operational efficiencies, reduce costs and expand
operating margins.  The company plans to rationalize operations at selected
facilities located in Europe and North America, and reduce its global
workforce through organizational changes and productivity improvements, with a
combined net reduction of approximately 300 employees.  These actions will
result in a restructuring charge of approximately $28 million ($17 million
after tax, or $0.25 per share) in Meritor's third fiscal quarter ending
June 30, 1999.
    Meritor expects to recover the charge in just over two years.  The company
estimates that the restructuring actions will reduce operating costs by
approximately $12 million ($7 million after tax, or $0.10 per share) in fiscal
year 2000 and by approximately $15 million ($9 million after tax, or $0.13 per
share) annually, beginning the following fiscal year.  The restructuring will
not impact anticipated sales levels.
    Of the $28 million total pre-tax charge, about $16 million relates to
employee severance costs, with the balance primarily associated with the
rationalization of operations.  The restructuring actions will help Meritor
extend its track record of improved financial performance and achieve its
long-term financial goals, with the overall objective of building long-term
value for shareowners.
    Meritor Chairman and Chief Executive Officer, Larry D. Yost, explained:
"Building on our track record of solid financial performance, these actions
reflect our ongoing efforts to reduce costs, improve operational efficiencies
and heighten asset utilization.  Our Light Vehicle Systems business will
account for approximately 75 percent of the charge.  We are consolidating some
of our manufacturing operations, including the closure of a sunroof facility
to respond to European sunroof option rates which have been declining during
the past several years but have now stabilized.  Also, we expect that plant
consolidations will improve operating margins at our door systems business.
In addition, organizational changes and productivity enhancements are planned
to reduce costs and boost efficiencies.  The remaining 25 percent of the
charge relates to our Heavy Vehicle Systems business, where we also expect to
improve operating efficiencies and reduce costs by combining and outsourcing
activities."
    Yost continued:  "We are continuously seeking ways to rationalize
production, enhance product quality and customer service and focus on our core
strengths.  At the same time, we are proactively responding to changes in the
markets we serve.  We believe these actions will have a direct and positive
impact on our bottom line."
    Meritor, with 1998 sales of more than $3.8 billion, is a global supplier
of a broad range of components and systems for commercial, specialty and light
vehicle OEMs and the aftermarket.  Meritor consists of two businesses:  Heavy
Vehicle Systems, a leading supplier of drivetrain systems and components for
medium- and heavy-duty trucks, trailers and off-highway equipment and
specialty vehicles, including military, bus and coach, and fire and rescue;
and Light Vehicle Systems, a major supplier of roof, door, access control,
suspension and seat adjusting systems, and wheel products for passenger cars,
light trucks and sport utility vehicles.
    This news release contains statements relating to future results that are
"forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995.  Actual results may differ materially from those projected
as a result of certain risks and uncertainties, including but not limited to
those detailed from time to time in the Company's Securities and Exchange
Commission filings.
    For more information, visit the Meritor website at
http://www.meritorauto.com

                           Meritor Automotive, Inc.
            Restructuring Charge and Expected Savings Information
                  ($ in millions, except per share amounts)

                                                    Expected Annual Savings
                                  Restructuring                    2001 and
                                    Charge          2000          Thereafter

    Components of (Charge)/Savings:

      Employee-related              $  (16)        $  9             $ 12

      Operations-related               (12)           3                3

          Before Income Taxes          (28)          12               15

    Income Taxes                        11           (5)              (6)

    After Income Taxes              $  (17)        $  7             $  9

    Earnings Per Share Impact      $ (0.25)     $  0.10          $  0.13

    Note:  Above information pertains to restructuring actions announced
June 3, 1999, with the related restructuring charge to be recorded in
Meritor's third fiscal quarter ending June 30, 1999.