ArvinMeritor Inc. (ARM), stymied in its bid to spin off its auto parts business amid the sales slowdown, said Thursday it will now reorganize the business and try to sell it off in pieces.

The company, which makes both commercial truck and automotive parts, began taking steps in May 2007 to spin off the light-vehicle unit to create two "financially strong" companies that would attractive investors. That changed in October when ArvinMeritor said it would rethink the move and try to sell the division given the weakening economy.

ArvinMeritor also withdrew its 2009 first-quarter financial guidance due to its change in strategy. The company had said it expected to generate $50 million to $58 million from its continuing operations before taxes and depreciation. It also expected sales of $1 billion before special items.

Also Thursday, Chief Executive Officer Chip McClure said Phil Martens, the former president of the light-vehicle unit, left the company to pursue other opportunities.

Shares of ArvinMeritor recently fell 26 cents, or 7.3%, to $3.32.

The company had been in talks to sell the entire light-vehicle systems group, but determined it couldn't "capture the appropriate value" by selling the whole business owing to tight credit markets and weak sales volume, McClure said.

The unit will be reorganized into body systems, chassis systems and wheels units. The company will continue to explore a sale for the body-systems business and evaluate strategic options for the chassis-systems unit, but expects to retain the wheels business, as previously announced.

ArvinMeritor has been hurt by the continued drop in demand, tied to the sinking fortunes of the U.S. auto industry. This week, in an effort to conserve cash, it cut pay for about 100 senior executives, include CEO McClure, effective Jan. 16. ArvinMeritor has approximately 1,700 salaried employees in the U.S. and around 5,500 globally.

-By Jeff Bennett, Dow Jones Newswires; 248-204-5542; jeff.bennett@dowjones.com

(Mike Barris contributed to this report.)

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