Daimler Trucks annouces end of Sterling Trucks

[Dale Lakin]

St. Thomas, Ont., truck plant a victim as Daimler kills Sterling brand, cuts jobs

1 hour ago

 

ST. THOMAS, Ont. — Daimler AG is ending truck production at plants in southwestern Ontario and Oregon and cutting 2,300 jobs as the German automaker tries to cope with depressed demand for its heavy vehicles.

 

The closure of the St. Thomas assembly plant, announced Tuesday, will see the loss of another 700 jobs and is another blow to hit Canada's manufacturing sector, centred in Ontario and Quebec.

 

A local business leader in St. Thomas said people are "just reeling" from the planned shutdown in the community, which has already seen cuts at a local Ford Canada auto plant and parts suppliers.

 

"It spins through the entire region," said Bob Hammersley, general manager of the St. Thomas and District Chamber of Commerce.

 

"About 700 workers are directly affected," but a "lot of suppliers will be affected by the news. The jobs that are going to be lost are not just jobs that are in the city of St. Thomas, but they extend through the entire region."

 

Blue-collar industries in Canada have seen thousands of jobs wiped out because of the restructuring auto industry, the high value of the loonie in the last two years and the slump in the United States economy, which has cut demand for Canadian-built cars and trucks.

 

In recent months, General Motors, Deere & Co., Volvo and other industrial companies have cut jobs and announced plans to shut down plants in southern Ontario.

 

Earlier Tuesday, Daimler announced in Germany that its North American truck division will drop its Sterling brand and end truck production in St. Thomas next March, when the company's current agreement with the Canadian Auto Workers union expires.

 

However, the German company said it will make additions to its Freightliner and Western Star truck operations to cover the markets for those brands.

 

Daimler Trucks North America will also close its Portland, Ore. truck plant in June 2010, when current contracts there expire. The company said Western Star production will shift to a plant in Santiago, Mexico, while Freightliner-brand military vehicles will be produced at one of its factories in the Carolinas by mid-2010.

 

Daimler said about 2,300 workers at St. Thomas and Portland will be affected by mid-2010. That includes previously announced layoffs of 720 workers at the Ontario plant, whose jobs will go next month.

 

The company also plans to cut its administrative workforce by about 1,200 - with more than half of those directly related to the Sterling brand. A voluntary separation program will be offered.

 

Daimler said in a statement that the truck restructuring 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 (Daimler Trucks North America) 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 call, 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."

 

The St. Thomas cuts are in addition to the 720 workers already scheduled to be laid off next month with the elimination of one of the plant's last two shifts. Daimler laid off 600 people at the St. Thomas plant last year when the first of three shifts was cut.

 

The plant produces a range of medium-and heavy-duty trucks and once employed more than 2,000 people. With the U.S. economy headed towards recession, demand for heavy trucks used for shipping and other purposes has dropped sharply.

 

Hammersley said despite the bad layoff news, there are "other dimensions of transportation employment" that St. Thomas could pursue.

 

"We could look at aerospace, we could look at aircraft manufacturing, rail car manufacturing - not just things that are on rubber tires."

 

Daimler said the truck unit expects to strengthen its position on 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 the truck unit's earnings by US$900 million a year by 2011.

 

Daimler shares rose 4.9 per cent at 27.49 euros, or US$37.33, in trading on the Frankfurt stock market.

[LARRY BRUDZYNSKI]

Yeah I read this this morning, and called my old dealer Motor City Trucks, talked with my buddy about it. He told me that they just got out of a meeting with the D/P. They are telling their employees that this is just a rumor. I figured it wasn't and told him to be careful they might have a suprise coming. Guess I got out at just right time.

[Dale Lakin]

It is no rumor I just got sat in on a listen only conference call with the President of Daimler Truck North America it is reality. They are ending production of the Sterling branded trucks 3/26/2009. There is an offer on the table to be a parts and service only dealer with Sterling. Be interesting to see where this takes us in the near future. Motor City I am sure is just like us in that they offered F250-up on the FOMOCO side and Sterling trucks. Just makes for some new challenges on how we can continue to do this and do it well enough to make some money in the end...

[LARRY BRUDZYNSKI]

Quote:

Motor City I am sure is just like us in that they offered F250-up on the FOMOCO side and Sterling Trucks

No that won't happen Motor City can only be F450-and up. They tried back when Ford got out of the heavy truck market. To many light truck dealers in Metro Detroit complained and Ford denied it to them.

[Dale Lakin]

Started thinking some of the dealers this will affect and there are some big players out there. Midway in KC, Broadway in St Louis, Wabash in Indy, Boyer in Minneapolis, Peach State in Atlanta and on and on.

 

I am very curious why the decision to eliminate the Sterling name when it carried 12-15% market share vs Western Star that only carries 2-5%?? Would seem to me the Star name would have pissed less people off but then again most of the Star dealers are dual with Freightliner so I guess DTNA didn't want to piss off the people they were going to continue to be in bed with...

[Joey Kaylor]

Does this mean the F650's are going out of production?

 

 

or are they not made by western star?

[Keith Browning]

Joey, Ford's medium duty trucks, the LCF, F650 and F750 are made by Blue Diamond Truck in Mexico... Blue Diamond is a joint venture between Ford Motor Company and International Truck and Engine Corp.

[LARRY BRUDZYNSKI]

Speaking of joint ventures.... Awhile back I had talked to some guys at DST a Ford fab shop, they had told me that Ford had some IH's that they have been testing for Ford. I guess Ford is planning on getting back into the big truck market. Looks like Blue Diamond will be getting a big brother.

[Dale Lakin]

I highly doubt that Ford is going to venture back into the class 8 market considering the current state of affairs there. Not only that it is my understanding this is the last model year for any of the joint venture trucks aka F650-750 and LCF.

[mlee]

i think you are right dale. last i heard both new ld diesel engines are "ford built" and ford will basically cut all ties with international.

[Alex Bruene]

I heard of that happening months ago... Infact, our dealer decided to not renew the Sterling brand, and have purchased a Hino franchise instead... what's next?

[Dale Lakin]

I am still of the opinion that FOMOCO and Navistar are going their seperate ways. I know there was discussion of a joint venture class 8 truck but I understood that was all scraped when the whole pissing match over the 6.ONO came about.