Meritor, Inc., headquartered in Troy, Michigan, is a premier global supplier
of a broad range of integrated systems, modules and components to original equipment
manufacturers (“OEMs”) and the aftermarket for the commercial vehicle,
transportation and industrial sectors. We serve commercial truck, trailer, military,
bus and coach, construction, and other industrial OEMs and certain aftermarkets.
Our principal products are axles, undercarriages, drivelines, brakes and braking
systems.
Our reporting segments are as follows:
The Commercial Truck & Industrial segment supplies drivetrain systems and
components, including axles, drivelines and braking and suspension systems,
for medium- and heavy-duty trucks, off-highway, military, construction, bus
and coach, fire and emergency and other applications in North America, South
America, Europe and Asia Pacific. This segment also includes the companys aftermarket
businesses in Asia Pacific and South America; and
The Aftermarket & Trailer segment supplies axles, brakes, drivelines, suspension
parts and other replacement and remanufactured parts to commercial vehicle aftermarket
customers in North America and Europe. This segment also supplies a wide variety
of undercarriage products and systems for trailer applications in North America.
We are currently a premier global supplier of a broad range of integrated systems,
modules and components to OEMs and the aftermarket for the commercial vehicle,
transportation and industrial sectors, and we believe we have market-leading
positions as a leader in many of the markets we serve. We are working to enhance
our leadership positions and capitalize on our existing customer, product and
geographic strengths.
Our business continues to address a number of other challenging industry-wide
issues including the following:
Uncertainty around the global market outlook;
Volatility in price and availability of steel, components and other commodities;
Disruptions in the financial markets and their impact on the availability and
cost of credit;
Volatile energy and increasing transportation costs;
Impact of currency exchange rate volatility;
Consolidation and globalization of OEMs and their suppliers; and
Significant pension and retiree medical health care costs.
Other
Other significant factors that could affect our results and liquidity in fiscal
year 2016 and beyond include:
Significant contract awards or losses of existing contracts or failure to negotiate
acceptable terms in contract renewals;
Failure to obtain new business;
Ability to manage possible adverse effects on our European operations, or financing
arrangements related thereto, in the event one or more countries exit the European
monetary union;
Our ability to implement planned productivity, cost reduction, and other margin
improvement initiatives;
Ability to work with our customers to manage rapidly changing production volumes;
Ability to recover and timing of recovery of steel price and other cost increases
from our customers;
Any unplanned extended shutdowns or production interruptions by us, our customers
or our suppliers;
A significant deterioration or slowdown in economic activity in the key markets
in which we operate;
Competitively driven price reductions to our customers;
Potential price increases from our suppliers;
Additional restructuring actions and the timing and recognition of restructuring
charges, including any actions associated with the prolonged softness in markets
in which we operate;
Higher-than-planned warranty expenses, including the outcome of known or potential
recall campaigns;
Uncertainties of asbestos claim litigation and the outcome of litigation with
insurance companies regarding the scope of coverage and the long-term solvency
of our insurance carriers; and
Restrictive government actions by foreign countries (such as restrictions on
transfer of funds and trade protection measures, including export duties, quotas
and customs duties and tariffs).
Our specific business strategies are influenced by these industry factors and
global trends and are focused on leveraging our resources to continue to develop
and produce competitive product offerings. We believe the following strategies
will allow us to maintain a balanced portfolio of commercial truck, industrial
and aftermarket businesses covering key global markets.