<PAGE>

                                                                    Exhibit 10-r



October 28, 2003


Mr. Craig Stinson
8224 W. Mulligan Lane
Columbus, IN  47201

Dear Craig:

Subject:  Mutually Agreed Upon Separation

This letter confirms the substance of our conversation regarding a mutually
agreed upon separation between you and the Company. We emphasize that your
acceptance of this agreement is completely voluntary. ArvinMeritor agrees to
provide you the following:

      1.    Beginning August 26, 2003, through August 25, 2006 (the "Separation
            Period"), you will receive separation pay equal to thirty six months
            of pay (at your current compensation), spread equally over the
            Separation Period. The Separation Period is inclusive of unused
            vacation for calendar year 2003.

      2.    Notwithstanding the fact that your last day of actual work was
            August 25, 2003, you will be eligible to receive an incentive
            compensation plan (ICP) payment for fiscal year 2003, as if your
            last day actually worked was September 30, 2003. Such payment will
            be subject to the applicable formula. Final award determination, if
            any, is subject to Board of Directors' approval.

      3.    Notwithstanding the fact that your last day of actual work was
            August 25, 2003, you will be eligible to receive long term incentive
            plan (LTIP) payments, as if your last day actually worked was
            September 30, 2003, based on your grant letters for the FY2001-2003;
            FY2002-2004; and FY2003-2005 plan years as follows:

            -     FY2001-2003 LTIP will be paid in December, 2003, pending Board
                  of Directors' approval based on the applicable formulas, (36
                  months out of 36) for time worked during the performance
                  cycle.

            -     FY2002-2004 LTIP will be paid in December, 2004, pending Board
                  of Directors' approval, based on the applicable formulas on a
                  prorated basis (24 months out of 36) for time worked during
                  the performance cycle.


            -     FY2003-2005 LTIP will be paid in December, 2005, pending Board
                  of Directors' approval, based on the applicable formulas on a
                  prorated basis (12 months out of 36) for time worked during
                  the performance cycle.
<PAGE>
Craig Stinson
October 28, 2003
Page 2


      4.    All outstanding stock options not vested will vest on the last day
            of your Separation Period. Stock options can be exercised up to
            three months after the last day of your Separation Period, November
            25, 2006. Any option not exercised by that date will be forfeited.

      5.    You received a grant of restricted stock in exchange for cancelled
            options on July 16, 2001. These restricted shares and the associated
            shares purchased with reinvested dividends, will vest on July 16,
            2006. However, if the Company achieves performance objectives set
            forth in the Restricted Stock Agreement these restricted shares and
            the associated shares purchased with reinvested dividends will vest
            on January 3, 2005 or January 3, 2006.

      6.    You also received a grant of performance contingent restricted
            shares on November 22, 2002. The restrictions on these restricted
            shares will not lapse until after the corresponding LTIP performance
            cycle (2003-2005) is completed and the Compensation and Management
            Development Committee of the Board of Directors determines the
            extent to which the restricted shares in that grant and the
            associated shares purchased with reinvested dividends will vest as
            set forth in the Restricted Stock Agreement.

      7.    Your present Company vehicle may be driven at Company expense
            through the end of your lease period (April 6, 2005), at which time
            you may purchase it in accordance with the Company Car Policy as
            though you were an active employee.

      8.    You will continue to be provided financial counseling reimbursement
            at your current annual rate through your Separation Period.

      9.    Short and long term disability coverage will cease as of August 26,
            2003.

      10.   Medical, dental and vision coverage will remain in force through
            August 31, 2006. After August 31, 2006, you will be entitled to
            continue your group medical, dental, vision and flexible spending
            account coverage at your own expense for a period of up to 18 months
            through COBRA. Information as to the cost of such coverage will be
            supplied following the expiration of benefits. Basic life and
            accidental death and personal loss insurance coverage will remain in
            force through August 31, 2006 and the life insurance coverage only
            may be converted to an individual policy within 31 days after
            termination of coverage by contacting Aetna at 1-800-826-7448.
            Payroll deductions for any Group Universal Life (GUL) and/or
            supplemental accidental death and personal loss insurance coverage
            that you may have elected will continue through August 31, 2006.
            Aetna will contact you through the mail following that date with
            regard to your ability to convert these coverages to an individual
            policy.

      11.   You were offered the choice of whether to retain your Company
            sponsored social membership at Oakland Hills Country Club, or your
            Company sponsored membership at Harrison Lake Country Club, through
            your Separation Period. You have decided to retain your Company
            sponsored social membership at Oakland Hills. If during the
            Separation Period, you become eligible to transition from a social
            member to a stock member of Oakland Hills, the Company will pay the
            costs associated therewith and will continue to pay your associated
            expenses, pursuant to the policy then in effect, with
<PAGE>
Craig Stinson
October 28, 2003
Page 3


            respect to senior executives. At the end of your Separation Period,
            you may retain your Oakland Hills membership, by reimbursing the
            Company for any equity interest in the Club. In addition, if during
            your Separation Period, you become employed and as a benefit of your
            new employment you are eligible for a country club membership, you
            will reimburse to the Company as of the date first employed, the
            entire amount paid to secure your stock membership at Oakland Hills.
            Any costs associated with the Harrison Lake Country Club are no
            longer the responsibility of the Company.

      12.   In full and complete satisfaction of the costs associated with
            selling your Columbus, Indiana residence, including the sale loss
            provision set forth in the June 11, 2003, letter, addressed to Mark
            Hendrickson and the costs associated with purchasing your Rochester
            Hills residence, including all associated relocation costs, the
            Company will pay to you the sum of Three Hundred Fifty Thousand
            Dollars ($350,000), less applicable taxes, said sum to be paid to
            you by wire transfer to your designated bank account on or about
            January 6, 2004.

      13.   You will be eligible to continue to participate in the Company
            savings plan through the Separation Period. If you wish to change
            your contribution level or change the direction of your investments,
            you will need to call T. Rowe Price at 1-800-922-9945.

      14.   You will receive Company sponsored outplacement assistance from the
            outplacement firm of your choice under the executive management
            program.

      15.   Your compensation checks will be mailed to your home or direct
            deposited unless you specify otherwise. Please let us know in
            writing if you change your address.

      16.   You will not disparage, portray in a negative light, or take any
            action which would be harmful to, or lead to unfavorable publicity
            for, the Company or its subsidiaries or divisions, or any of its or
            their current or former officers, directors, employees, agents,
            consultants, contractors, owners, divisions, parents or successors,
            whether public or private, including without limitation, in any and
            all interviews, oral statements, written materials, electronically
            displayed materials and materials or information displayed on
            Internet- or intranet-related sites. In the event of a breach or
            threatened breach of this paragraph 13, you agree that the Company
            will be entitled to injunctive relief in a court of appropriate
            jurisdiction to remedy any such breach or threatened breach and you
            acknowledge that damages would be inadequate and insufficient.

      17.   You will deliver promptly to the Company (and not keep in your
            possession or deliver to any other person or entity) any and all
            property belonging to the Company in your possession or under your
            control, including without limitation, credit cards, computer
            hardware and software, palm pilots, pagers, other electronic
            equipment, records, data, notes, reports, correspondence, financial
            information, customer files and information and other documents or
            information (including any and all copies of such Company property).

      18.   You agree, on behalf of yourself, your heirs, executors,
            administrators and assigns, to release, acquit and forever discharge
            the Company and its subsidiaries and divisions and its and their
            respective current and former officers, directors, employees,
            agents, owners, affiliates, successors and assigns (the "Company
            Released Parties") of and from any and all manner of actions and
            causes of action, suits, debts, damages, dues,
<PAGE>
Craig Stinson
October 28, 2003
Page 4


            accounts, bonds, covenants, contracts, agreements, judgments,
            charges, claims, rights and demands whatsoever, whether known or
            unknown ("Losses"), which you, your heirs, executors, administrators
            and assigns ever had, now have or may hereafter have, against the
            Company Released Parties or any of them arising out of or by reason
            of any cause, matter or thing whatsoever from the beginning of the
            world to the date hereof, including without limitation, any and all
            matters relating to your employment by the Company and its
            predecessors and the cessation thereof, any and all matters relating
            to your compensation and benefits by or from the Company and its
            predecessors and any and all matters arising under any federal,
            state or local statute, rule, regulation or principle of contract
            law or common law.

            You understand that as a result of this paragraph 15, you will not
            have the right to assert that the Company unlawfully terminated your
            employment or violated any of your rights in connection with your
            employment.

            You affirm that you have not filed, and agree not to initiate or
            cause to be initiated on your behalf, any complaint, charge, claim
            or proceeding against the Company Released Parties before any
            federal, state or local agency, court or other body relating to your
            employment, the cessation thereof or any other matters covered by
            the terms of this paragraph 15, and agree not to voluntarily
            participate in such a proceeding.

      19.   The Company and you agree that the terms and conditions of this
            Letter Agreement are confidential and that neither party will
            disclose the terms of this Letter Agreement to any third parties,
            other than (i) disclosure by you to your spouse, (ii) disclosure by
            the Company or you to its or your respective attorneys, auditors,
            financial advisors and accountants, (iii) as may be required by law
            (including securities laws) or (iv) as may be necessary to enforce
            this Letter Agreement. Without limiting the generality of the
            foregoing, you acknowledge that the Company may, to the extent
            required by applicable law, describe or incorporate the terms of
            this Letter Agreement in, and/or file or incorporate this Letter
            Agreement as an exhibit to, one or more filings with the Securities
            and Exchange Commission.

      20.   ArvinMeritor shall have the right to terminate this agreement at any
            time if you materially breach any of the obligations stated herein
            under this agreement.

      21.   You acknowledge that you have been advised to consult with an
            attorney prior to signing this agreement. You also acknowledge,
            understand and agree that this agreement is voluntarily entered into
            by you in consideration of the undertakings by ArvinMeritor as set
            forth herein and is consistent in all respects with the discussions
            by ArvinMeritor personnel with you relating to your separation.

      22.   You agree that for a period of twelve months following the date of
            your departure (August 25, 2003), from the Company, you will not
            join or start a business that competes with ArvinMeritor's Light
            Vehicle Systems business unit, nor will you provide consultancy
            services, nor for the same twelve-month period will you solicit for
            employment any other ArvinMeritor related employee. Notwithstanding
            the foregoing, specific companies that would be deemed as competing
            against ArvinMeritor's Light Vehicle Systems business unit are:
            Dana, Tenneco and Ebers Paecher.
<PAGE>
Craig Stinson
October 28, 2003
Page 5


      23.   In the event there is any question as to direct or indirect
            competition, you agree to obtain approval from ArvinMeritor in
            writing prior to commencement of employment with the company which
            could be in competition. You also agree that you will not disclose,
            nor will you use any ArvinMeritor proprietary information.

      24.   This agreement is a complete and final agreement between
            ArvinMeritor and its successors and Craig Stinson, and supercedes
            all other offers, agreements, and negotiations except for the
            Invention Assignment and Arbitration Agreements which remain in full
            force.

      25.   You will have until December 11, 2003, in which to consider this
            final agreement, and you may revoke this agreement within seven days
            of signing. This agreement will not become effective until the
            revocation period has expired.

Sincerely,


/s/ Terry O'Rourke

Terry O'Rourke
President & COO

cc:   L. D. Yost                        Accepted and agreed to:
      V. G. Baker, II
      E. T. Whitus                                 /s/ Craig M. Stinson
                                        ----------------------------------------
                                                       Craig Stinson

                                                          11/7/03
                                        ----------------------------------------
                                                           Date