The new Meritor Heavy Vehicle Systems (HVS) Mexico S. A. de C.V. plant is the second plant for Meritor in Queretaro and its fourth plant in Mexico. The company is among the leading suppliers to the Mexican automotive industry, and it currently employs more than 1,800 people in the country.

Representing an initial capital investment of more than $3 million (USD), the 120,000-sq. ft. plant presently employs 40 people and the number of employees could increase depending on business volumes, according to plant manager Jose Felipe Pelaez, a 15-year Meritor employee and manufacturing, engineering and operations veteran.

Ignacio Loyola Vera, the Governor of Queretaro, and Armando Rivera Castillejos, the Sustainable Development Minister of the State, joined Prakash Mulchandani, president of Meritor's HVS business, and senior vice president of Meritor Automotive, to officially dedicate the new plant in ceremonies held today.

In his address to the plant's employees, Meritor customers, news media members and guests, the Governor of Queretaro praised the company's dedication to economic growth and social development in Queretaro, and for fulfilling its stated commitment to support its Mexican automotive and truck customers with local production capacity.

Meritor's HVS President Prakash Mulchandani said, "Today, Mexico is among the world's leading growth markets for heavy trucks and components, and as a premier supplier, we are pleased to participate in its expansion by increasing our capabilities to better serve our customers. Our new plant illustrates that our valued business with Mexico's heavy vehicle OEMs makes it possible for us to invest in Mexican plants and in talented people, resulting in increased domestic content and domestic employment. We're dedicated to remaining in Mexico, continuing to work for our customers."

According to Pelaez, the Queretaro plant provides local customers with just-in-time delivery and enhanced service, while its production flexibility enables the company to respond quickly to OEM customer requests, resulting from ratio modifications, line-sequence revisions and other last-minute changes. The new plant has the capability to expand its production to include other medium- and heavy-duty truck components, including front steer axles, trailer axles, foundation brakes and complete braking systems, in addition to other components. If additional products are added in the plant, the plant's employment level could grow significantly within the next two years.

Also active in the Mexican truck market is Meritor's Aftermarket business which supplies Mexican truck operators via two master distributors who stock genuine Meritor products and are presently serving end-user truck operators. These parts also are available from OE truck dealers. With dedicated local resources to serve the Mexican truck and trailer builders, in addition to serving the authorized parts outlets and fleet customers, the company continues to market genuine Meritor products and continues to provide customers with complete sales and technical support.

In addition to the new Queretaro HVS plant, Meritor has three Light Vehicle Systems' production facilities in Mexico serving passenger car and light truck makers:

• Meritor Mexicana S.A. de C.V., also in Queretaro, produces window
• regulators and sunroofs, including sunroofs for Volkswagen Golf and Jetta
• models, GM and Nissan.
• Meritor Light Vehicle Systems S.A. de C.V. plant in San Luis Potosi,
• supplies steel wheels to Chrysler, Volkswagen de Mexico and General Motors; and
• Meritor Mexicana S.A. de C.V. Door Systems plant in Puebla, produces
• door modules.

Meritor also continues its joint venture operation with Dirona S.A. in Monterrey, Nuevo Leon, Mexico, producing axles and foundation brakes for heavy-duty trucks.

(Feb. 15, 2000)