Daimler said today that its North American truck division will drop its Sterling brand and end truck production at plants in Oregon and Ontario by mid-2010 as it moves to deal with depressed demand.
BERLIN — Daimler said today that its North American truck division will drop its Sterling brand and end truck production at plants in Oregon and Ontario by mid-2010 as it moves to deal with depressed demand.
Daimler Trucks North America (DTNA) will discontinue the Sterling Trucks brand in March but will make additions to its Freightliner and Western Star ranges to cover market segments that the brand has served, the Stuttgart-based parent company said in a statement.
Daimler said it will close its Portland truck plant in June 2010, when labor contracts there expire. Manufacturing of medium- and heavy-duty trucks at its St. Thomas, Ontario, plant will end in March 2009, when its current agreement with the Canadian Auto Workers at the facility expires.
The company said Western Star production will be assigned to a plant in Santiago, Mexico, while Freightliner-brand military vehicles will be produced at one of its facilities in the Carolinas by mid-2010.
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Daimler said about 2,300 workers at Portland and St. Thomas will be affected. That includes previously announced layoffs of some 720 workers at the Canadian plant, whose jobs will go next month.
Daimler also laid off 600 people at the St. Thomas facility last year.
Daimler also plans to cut its administrative work force by about 1,200 — with more than half of those directly related to the Sterling brand. It said a voluntary separation program will be offered.
The company said production at DTNA’s new manufacturing plant in Saltillo, Mexico, would start as planned next February. That plant will produce Freightliner’s new flagship Cascadia model.
Daimler said in a statement that the plans were drawn up “in response to continuing depressed demand across the industry and structural changes in the company’s core markets.”
“We are confident that this forward-looking strategy for DTNA is the right measure to address the challenges in the North American market,” said Andreas Renschler, the Daimler board member responsible for the truck operation.
During a telephone conference, Renschler stressed that “we can’t wait for a government bailout with taxpayer money.”
“We have to act now,” he said. “And that’s exactly what we’re doing.”
Daimler said the truck unit expects to strengthen its position in the North American commercial vehicle market by “concentrating the company’s considerable technical and marketing resources on a more focused model lineup.”
The company said it expects the changes to improve DTNA’s earnings by $900 million a year by 2011.
Associated Press writer Oliver Schmale in Stuttgart contributed to this report