Being in the auto-parts business lately hasn't been easy. A few companies, such as Autoliv (NYSE:ALV) and BorgWarner (NYSE:BWA), have held up to some extent, but many others have not. Whether they're worried about production levels at American carmakers General Motors (NYSE:GM) and Ford (NYSE:F) or about the upcoming downturn in heavy-truck purchases, many investors want nothing to do with these companies as they navigate challenging times.

Parts-maker ArvinMeritor (NYSE:ARM) has done all right since I last wrote about it, but patient investors may yet want to hang on, even though fiscal third-quarter results don't suggest immediate payoffs for that patience. Sales were up less than 4%, margins weakened, and adjusted segment operating profits were still down about 8% from last year.

Still, I think the business is in better shape than some investors may think, and some of the ongoing restructuring efforts should have lasting benefits. The company continues to shed non-core businesses, as seen in the recent sales of a light-vehicle aftermarket motion-control business and its stake in a joint venture with Mitsubishi Steel. What's more, though ArvinMeritor does still have a hefty debt load, a refinancing has made the maturities of the debt more palatable.

I think some other changes can pay lasting dividends for ArvinMeritor, too. The company is increasingly sourcing more from China and India, and that not only offers long-term cost and labor advantages, but it also positions the company to work more closely with local companies in these high-potential markets. Moreover, it is looking to become the leading or No. 2 supplier in its remaining businesses and to continue dealing with a wide range of customers. Detroit's Big Three make up roughly 20% of sales.

That said, the next year or two could still be difficult. Many heavy-truck customers have been buying ahead of new environmental regulations, and it is widely assumed that 2007 will be a bad year for Volvo (NASDAQ:VOLV), Paccar (NASDAQ:PCAR), and other ArvinMeritor customers. While subdued earnings reports may keep a lid on the stock, savvy investors might want to use the time to evaluate the internal improvements in the business and see for themselves whether the long-term potential outweighs the short-term lethargy.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).