While investing in one operation, ArvinMeritor is divesting itself of another. The company announced it plans to invest $10 million into its commercial vehicle business in Brazil. That news follows last week’s announcement that the company has entered into agreement to sell its Wheels business to Iochpe-Maxion, a Sao Paulo, Brazil-based producer of wheels and frames.
That sale is expected to close by the end of 2009, the company said.
“Iochpe-Maxion approached us about acquiring this asset and we determined that selling it was in the best interest in terms of ArvinMeritor’s strategy and the Wheels businesses’ long-term growth,” said Chip McClure, CEO & president. “This new owner will invest in Wheels and the valuable, talented people who support it.”
The Wheels business operates facilities in Limeria, Brazil, and San Luis Potosi, Mexico.
“The Fumagalli wheel brand has a 60-year heritage and holds significant meaning for the global customer base,” McClure said. “This transaction supports our efforts to move our goal of becoming a commercial vehicle company while at the same time offering Wheels an exciting new future as a strategic core business in the Iochpe-Maxion portfolio. We are grateful for the significant contributions the people of this business made to the success of our company.”
McClure also said the company will explore a sale of its Body Systems business once market conditions improve, but for now the company remains an integral part of ArvinMeritor. The Body Systems division is part of the company’s Light Vehicle Systems business, which ArvinMeritor had previously said it would like to divest itself of.
The money being pumped into the commercial vehicle business in Brazil will help support new product segments and advanced manufacturing technologies, the company said. Production in South America is up 9% quarter-over-quarter, McClure said, despite the worldwide recession.
“Our growth strategy involves bringing new products and technology to South America,” said McClure. “ With the right products and a dedicated and talented workforce, ArvinMeritor will continue to be a strong commercial vehicle supplier in Brazil and across the continent.”