Questions and Answers about the Spin-off of Meritor Automotive, Inc. From Rockwell International
1 October 1997
Questions and Answers about the Spin-off of Meritor Automotive, Inc. From Rockwell International
TROY, Mich., Oct. 1 -- Meritor Automotive, Inc. today issued
the following:
Q. Does Meritor management plan to take the company in a new direction
now that it has separated from Rockwell International? What new
opportunities might the separation present and how will the company
take advantage of them?
A. Although we are a newly independent company with a new name, our
mission has not changed. We will remain the leading provider of
quality automotive systems and technology solutions to our customers
worldwide. As an independent company, Meritor will be able to quickly
capitalize on industry trends and take full advantage of
opportunities. We will be guided by an entrepreneurial management
team totally focused on solving the needs of the vehicle industry. We
have the enthusiasm and energy of a start-up company, balanced by the
capability and long-standing reputation built from more than 90 years
of experience in the automotive industry. As a stand-alone company,
we will be able to focus more intensely than ever on providing our
customers with outstanding value.
Q. What will your relationship with Rockwell International be like going
forward?
A. Rockwell's original business was in the automotive industry, dating
back nearly a century. There is a great deal of equity in the
Rockwell name. That's why you'll continue to see us acknowledge in
virtually all of our communication "A Heritage of Rockwell
Technology." Rockwell provided us with our proud heritage and built
us into the global leadership business we are today. From that solid
foundation, Meritor is exceptionally well-positioned to compete
effectively in global markets. Further, we plan to retain our
relationship with the Rockwell Science Center as a source of
technology innovation, just as we have in the past.
Q. Will you be making any restructuring moves now that you are your own
entity? What about acquisitions or divestitures? What about plant
rationalization and the impact of same on your employment figures?
A. As in any well-managed business, looking at opportunities and managing
change are key components of our activities. With our singular focus
on the automotive industry, what we can say with certainty is that we
are prepared to take advantage of the right opportunities. We are
equally prepared to deal with challenges, especially the challenges of
change -- in terms of what we do, what we make, where, how, at what
cost and with what level of profitability. We know that change is
sometimes difficult or otherwise hard to accept. We will manage our
business ever mindful of that fact. We will also manage it, however,
ever mindful of our responsibilities to our shareowners, customers and
employees overall as well as to the communities in which we do
business.
Q. What are the investment merits of Meritor?
A. We have a strong, experienced management team with significant
shareholdings in the company where compensation is tied directly to
performance. We are singularly focused. We have a long track record
of reliability, service and innovative technological solutions for our
many customers and valued partners worldwide. We are not simply
responding to but rather are anticipating and taking action with
respect to market trends, customer needs, industry challenges and
opportunities. Our global presence, which includes facilities, joint
ventures, sales and premier customers in North America, Asia and
Europe, means that Meritor can effectively weather regional economic
business cycles.
Q. Please break out your sales in terms of Heavy Vehicle vs. Light
Vehicle Systems, foreign vs. domestic. Where do you see the greatest
growth opportunities?
A. Our 1996 sales totaled approximately $3.1 billion, with 44 percent of
those sales to international customers. Our Heavy Vehicle Systems
(HVS) business accounted for about $1.8 billion or 58 percent of total
sales; Light Vehicle Systems (LVS) $1.3 billion or 42 percent of total
sales. We hope to increase sales an average of 8 percent a year, with
per-share earnings growing about 15 percent. We see growth
opportunities in both businesses -- for HVS, as developing nations
build roads and bridges to support fledgling economies; and more
particularly for LVS, which has a reputation for excellence in Europe,
where this business originated, and that has migrated to and is
growing in the Americas.
Q. Give us an overview of the current management team and its structure,
as well as some information about who serves on your board of
directors.
A. Our management team is headed up by Larry D. Yost, Chairman of the
Board and Chief Executive Officer. Other members of the team include:
-- Robert A. Calder, Senior Vice President and President, Light
Vehicle Systems
-- Gary L. Collins, Senior Vice President, Human Resources
-- David Greenfield, Senior Vice President, General Counsel and
Secretary
-- Thomas J. Joyce, Vice President and Treasurer
-- Susan P. Kampe, Senior Vice President, Information Technology and
Chief Information Officer
-- Lawrence J. Lockwood, Vice President and Controller
-- Thomas A. Madden, Senior Vice President and Chief Financial Officer
-- Prakash R. Mulchandani, Senior Vice President and President,
Worldwide Truck and Trailer Systems
-- Richard C. Quaid, Senior Vice President and President, Off-Highway
and Specialty Products
-- Rodney J. Walter, Senior Vice President, Business Development and
Communications.
In addition to Mr. Yost, other members of our Board of Directors
include:
-- Joseph B. Anderson Jr., chairman and chief executive officer of
Chivas Products Ltd., an automotive components supplier
-- Donald R. Beall, chairman and former chief executive officer of
Rockwell International
-- John J. Creedon, former president and chief executive officer of
Metropolitan Life Insurance Company
-- Charles H. Harff, a consultant to Rockwell who previously served as
its senior vice president, general counsel and secretary
-- Harold A. Poling, former chairman and chief executive officer of
Ford Motor Company
-- Martin D. ("Skip") Walker, former chairman and chief executive
officer of M.A. Hanna and president of Rockwell's Automotive
business from 1978-1982
Q. Can you comment as to the depth of experience of your current
management team?
A. The members of Meritor's management team have a combined total of
nearly 150 years in the automotive industry. They have experience in
managing global manufacturing, engineering, operations, financing and
marketing activities involving components and systems for commercial
trucks, trailers, buses, off-highway commercial vehicles, specialty
vehicles, government heavy-duty wheeled vehicles as well as passenger
cars and light trucks in North America and throughout the world.
Q. How have customers been reacting to the news about the spin-off? What
about employees?
A. Both our customers and employees have reacted very favorably to the
spin-off, recognizing the benefits and opportunities it will bring.
This is an exciting time for everyone associated with Meritor. Our
proud heritage, core values, customer focus and desire to be the
industry's worldwide leader will continue to be the driving force
central to everything we do. These fundamental qualities provide us
with a time-tested foundation for future growth, technological
innovation and even higher levels of customer service and employee
opportunity.
Q. How will the spin-off impact your current and future joint venture
partners?
A. We very much value our joint venture partners and the successful
relationships we've built over the years. We fully expect to retain
them and grow our businesses together.
Q. Meritor's initial shareowners own stock through the circumstance of
having held Rockwell International shares. How much "flipping" do you
expect in your early days as an independent company and what is
management doing to minimize the impact of such "flipping"?
A. We certainly expect to lose some of our shareowners initially, simply
because our business may not be consistent with their investment goals
or preferences. At the same time, however, we expect to attract
additional shareowners because, indeed, we will now be consistent with
their goals or preferences. We have a strong, experienced management
team; we are singularly focused; we have a proven track record of
reliability, quality, service and innovative technological solutions
for customers worldwide; we have a strong balance sheet; our Board
of Directors is outstanding; we are ranked among the Fortune 500(R)
list of companies; and we have been named to the Standard & Poor's
MidCap 400 Index. We have been aggressively telling our story to
international security analysts for the past month. We intend to
continue to tell the Meritor story to them as well as to our
shareowners directly in the weeks and months ahead.
SOURCE Meritor Automotive, Inc.