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Meritor Announces Restructuring Actions to Reduce Operating Costs And Further Improve Efficiencies

16 June 2000

Meritor Announces Restructuring Actions to Reduce Operating Costs And Further Improve Efficiencies

    TROY, Mich. - Meritor Automotive, Inc. today announced several restructuring 
actions that it expects will significantly reduce costs and improve operational 
efficiencies.  The company plans to rationalize operations at selected facilities 
in Europe and trim its global workforce, resulting in a net reduction of 
approximately 500 employees.

    Meritor expects these actions will require a net cash outlay of about $10
million, and will result in a restructuring charge of approximately $26
million ($16 million after tax, or $0.26 per share) in its third fiscal
quarter ending June 30, 2000.  The company estimates these actions will reduce
operating costs by about $21 million annually ($13 million after tax, or $0.21
per share) beginning in fiscal year 2001.

    Meritor Chairman and Chief Executive Officer, Larry D. Yost, explained:
"We are continuously seeking ways to enhance product quality, broaden customer
service and focus on our core strengths.  At the same time, we are proactively
responding to changes in the markets we serve, including the planned downturn
in North American truck production.  The actions we announced today will have
a direct and positive impact on Meritor's bottom line."

    Of the $26 million total pre-tax charge, about $19 million relates to
employee severance benefits, with the balance primarily associated with the
rationalization of operations.  The restructuring actions will help Meritor
extend its record of improved financial performance and achieve its financial
goals, with the overall objective of creating long-term value for shareowners.

    Yost said:  "This restructuring initiative reflects our relentless efforts
to drive down the fixed-cost base of the company.  Our Heavy Vehicle Systems
business will account for approximately 60 percent of the charge, primarily
encompassing staff reductions and the elimination of excess manufacturing
capacity.  The remaining 40 percent relates to our Light Vehicle Systems
business, where we also expect to improve operating efficiencies by combining
activities."

    Meritor, with 1999 sales of $4.5 billion, is a global supplier of a broad
range of systems and components for commercial, specialty and light vehicle
OEMs and the aftermarket.  Meritor consists of two businesses:  Heavy Vehicle
Systems, a leading supplier of complete 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 and
suspension 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.