Master Builder.

In today's hard-edged era of mergers and acquisitions, ArvinMeritor's Larry Yost knows how to put all the pieces together for a smooth transition.

Building a new company can be rough. Very tough. After all this is an era of extremely messy mergers and acquisitions: automakers Daimler and Chrysler: IT companies SGI and Cray: Conrail and Norfolk Southern railroads. The list goes on and on. But there's one guy who's watched it all and avoided many of the mistakes made by firms a dozen times larger than his.

His name is carry Yost. He's a builder. And he's good at it. When he was an Ohio farm boy, he built his first house with his brother. Last month he helped his son, who is in the construction business, build another house. Yost was a team player, all the way -- taking orders from his kid, stuffing insulation into the new home.

But today Yost spends most of his time building his new company. ArvinMeritor Inc., the $7-billion tier 5 supplier to thc auto industry. They're h big -- 36,000 employees in 26 countries, making shocks, exhaust systems, modules, coil coating applications, integrated systems and much more.

In July 2000 Yost closed a merger between his own Meritor Automotive (formerly Rockwell Automotive) and fellow industry leader Arvin Inc. The results so far have been impressive. The transition has been nearly seamlessly smooth.

And that's where the lessons come in Big business, take note:

After only 100 days in business. Arvin Meritor already exceeded its goals of first-year net cost synergy savings of $30 million. By 2003, the company expects to have generated an additional $450 million through targeted revenue enhancements revenue possibilities impossible before the merger.

Yost: I think we are on the right track. We said that we wanted to take no more than one year to have completely integrated the two companies. So that means that we're five months into it. pretty close to six months and we are better than halfway. We've had no major problems. We've got a process in place to map out the steps that we wanted to go through, who was responsible for what, and when these things were going to happen.

That kind of nearly immediate success comes for one reason: Larry Yost and his team created a new corporate culture out of the two merged firms. They started developing a shared vision months before the merger was complete. They did it with dozens of executives, not just those at the very top.

Compare that with many companies that have huge post-merger productivity slumps. In-house culture wars. Lack of motivation and shared vision. Brain drain. Huge merger-related debt loads.

But none of that happened with ArvinMeritor.

Yost: What we did in the first two days was first -- and I think it's very interesting -- to spend time talking about 'What are our core values? What principles are we going to latch onto? What are those things that we will not violate?'

It's a good thing he did it right, and did it well. The softening of the manufacturing economy led Yost to a $90-million restructuring plan implemented last November -- just a few months after the merger. If he'd handled the merger like so many others have, he'd be in big, big trouble today.

Yost has a very definite idea of why mergers don't go smoothly very often. It all comes down to a conflict of visions between the cultures of the merging companies.

Yost: if there is one thing that you could be certain of in the business world today, it is that there will be change, So. companies that can be aware of what change is required and do a good job of sorting out where how and when -- and then do a good job of getting the organization aligned, going in the same direction and effectively making change -- those are the ones that are going to win in the long term.

There were two parts to the plan Yost had for the transition. The first was creating a new infrastructure for the new ship -- one that can survive change, economic tremors, even an earthquake. The second was creating a plan of where to steer the vessel -- an integrated vision of where the industry, the community and the customer are going. At some point in the process, the idea of a merger became passe, even irrelevant. The challenge became to build a great new company -- not an old one with a new part added.

Yost began the process in April 2000, three months before finalizing the merger in early July. He assembled the top 60 people in the developing organization -- 30 from Mentor, 30 from Arvin. In the first two days they identified their core values -- the principles they would refuse to violate. They spent two days forging the vision for a new company. Instead of hiring a high-priced consultant to facilitate the meetings, Yost did it himself. At the end of the exhaustive process they set up teams to tackle the main issues they had identified.

Yost: The cultures...were not as different as they might have been. We're both Midwestern companies. We're both companies that were started in the early 1900s. The values that we had within the companies are very, very similar, Some of the aspirations as well as the strategies were very, very similar. Beyond that I think The important thing was for Bill Hunt (Arvin's CEO and now president of ArvinMeritor) and I to see the world very similarly.

There are three parts to the vision they've come up with. The first is excellence -- a commitment to innovation and continuous improvement. The second is integrity -- a commitment to deliver what is promised to share owners, customers, communities and one another. But the third is the one that others can learn most from: A commitment to teamwork and mutual respect.

The three principles are so important to Yost that he wants them to transcend individual leaders (and egos) in the company. His goal is to integrate these principles so deeply into the fabric of ArvinMeritor that his employees would rather resign than violate them. They make up the foundation upon which everything else is built.

After creating a soul for the company, Yost's team set to work mapping out how to get there. A company can have goals and even ideas on how to achieve the goals. But a compass is not enough. ArvinMeritor had to create a map of the future that everyone could agree on.

In a volatile, technical field like the auto industry, looking at the future demands that you look at the past.

Yost: We have six or seven business systems. In each of them we do a technology roadmap. So let's take, as an example, door systems. What you do is to look back about 10 years ago to see what the technology was; (then), five years. and what it is today. From that, we try to extrapolate what's going to happen in the future.

The planning process was arduous, detailed and trying. But it accomplished its goal of putting everyone on board in the same direction. When ArvinMeritor Inc. opened its doors, it hit the ground running with a unified culture, a set of detailed goals and a plan of how to achieve them.

Larry Yost takes a balanced view of how to build a new company. But he believes in balance outside the workplace, too -- by giving his company principles that people can internalize throughout their lives.

And Yost means it too. He once threatened to deny an employee a merit raise if he didn't take a two-week vacation every year. And for himself, vacations are a key to success. Traveling to the over 25 countries his company has a presence in, he often shapes his travel plans to make visits to his two grandchildren a priority. Larry Yost says that resting is a goal just as important as any other item in his itinerary.

Yost: I make certain that I get my vacation, I get my time away. When I take a vacation and then I come back, the very first thing to do is make certain I've got the next one scheduled. Because in a business environment, if you don't schedule it, it doesn't happen. So I've got to get it scheduled about six months ahead of time or whatever to make certain ... or it'll never happen.

Workaholic business executives clawing for success need to take a lesson from Larry Yost. Balance sheets, IPOs, mergers and acquisitions can never take the place of down-home common sense.

File on Larry Yost

BORN: Feb. 23, 1938 in New Philadelphia, Ohio

EDUCATION: Bachelor's degree in industrial management from the Milwaukee School of Engineering; attended Cleveland State and Case Western Reserve universities.

FAMILY: Wife Joann, two grown children, two grandchildren

HOME: Rochester Hills

TITLE: Chairman and CEO, ArvinMeritor Inc.

BUSINESS: A $7-billion global automotive supplier of a broad range of integrated systems, modules and components for light vehicle, commercial truck trailer and specially OEMs and related after-markets.

HEADQUARTERS: Tray

BACKGROUND: Arvin Inc. and Mentor Automotive Inc. merged in July 2000 to become ArvinMeritor Inc. Prior to the merger. Yost was Mentor's chairman and CEO. In 1997 he directed Mentor through its transition from the automotive division of Rockwell International into an independent company.

International Consular Ball

Larry Yost will be honored as the 2001 World Trader of the Year at the 17th annual International Consular Ball, March 30 at The Ritz-Carlton Dearborn. The award is given annually to recognize outstanding accomplishments and contributions in the international trade arena.

The black-tie event, sponsored by the Detroit Regional Chamber's International Business Council, also pays tribute to the Consular Corps serving the Detroit Region. Ticket prices are $210 at the donation level, $260 at the patron level and $2,100 for a table of 10.