ArvinMeritor reported that it plans to initiate a new commodity surcharge starting June 1 in an attempt to offset surging steel and energy prices.
"As a result of the sudden and extraordinary surges in the price of steel, energy and other commodities, we are implementing a monthly review and adjustment process on all products," said Chip McClure, chairman, CEO and president of ArvinMeritor. "We have a portfolio of complex products that require varying levels of commodities. We plan to adjust the surcharge as appropriate for each product line."
In ArvinMeritor's second-quarter earnings report, the company said that the unprecedented volatility in the commodity markets, including a global shortage of scrap steel, a rapid escalation in the price of critical raw materials such as iron ore, coking coal and metal alloys, and higher fuel and energy costs, would require it to take recovery actions to mitigate a significant impact to the company's financial results.
The company has begun discussions with its customers prior to implementing the surcharge.
"As a result of the sudden and extraordinary surges in the price of steel, energy and other commodities, we are implementing a monthly review and adjustment process on all products," said Chip McClure, chairman, CEO and president of ArvinMeritor. "We have a portfolio of complex products that require varying levels of commodities. We plan to adjust the surcharge as appropriate for each product line."
In ArvinMeritor's second-quarter earnings report, the company said that the unprecedented volatility in the commodity markets, including a global shortage of scrap steel, a rapid escalation in the price of critical raw materials such as iron ore, coking coal and metal alloys, and higher fuel and energy costs, would require it to take recovery actions to mitigate a significant impact to the company's financial results.
The company has begun discussions with its customers prior to implementing the surcharge.
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