Company to sell Chickasha plant
Tuesday, November 2nd 2004, 6:40 am
By: News On 6
OKLAHOMA CITY (AP) _ A Michigan-based auto-parts maker has put two of its businesses up for sale, including one in Chickasha that has 450 employees.
ArvinMeritor Inc. plans to sell the Chickasha factory that is part of its light-vehicle aftermarket division, which makes struts, shock absorbers and other parts.
Krista McClure, spokeswoman for the Troy, Mich.-based company, said the company doesn't expect any changes at the Chickasha plant as the sales process moves forward.
``Light-vehicle aftermarket is a very strong business,'' she said. ``We feel a divestiture is in the best interests of the business group, because under new owners they will probably be able to grow more significantly than within ArvinMeritor.''
ArvinMeritor said it expects to complete the sales in 2005 and plans to use the proceeds to strengthen its balance sheet and to reinvest in its other business divisions.
The Chickasha plant has been hit by several rounds of layoffs in recent years as the company sought to cut costs. The factory employed as many as 750 people in summer 2003.
Charles ``Chip'' McClure, the company's chairman and chief executive officer, said ArvinMeritor wanted to focus on its light-vehicle systems and commercial-vehicle systems businesses, which are bigger and more profitable.
``We believe these decisions are necessary steps to improve our financial flexibility and strengthen our long-term profitability,'' McClure said in a statement.
ArvinMeritor's profit margins have been eroded by rising raw material costs and analysts also have noted softness in the aftermarket-parts business because of higher-quality original parts.
Despite that, ArvinMeritor rival Dana Corp. sold its aftermarket-parts business in July for $1.1 billion.
ArvinMeritor doesn't have a buyer lined up, but it has hired banker Lehman Brothers to help with the sale.
ArvinMeritor's light-vehicle aftermarket division had sales of $800 million in 2003.