Due to changes in the economy, Daimler Trucks North America (DTNA) has decided to discontinue its Sterling Trucks brand and focus on a two-brand strategy involving its Freightliner and Western Star brands. The discontinuation also provides DTNA with the opportunity to consolidate its manufacturing plant network.
The Sterling Trucks brand will be discontinued effective March 2009. The decision came due to overlaps the Sterling brand has with the Freightliner brand, and Sterling has achieved only one-fourth of the market penetration Freightliner has, despite several attempts to project the Sterling nameplate.
DTNA says additions will be made to both the Freightliner and Western Star brands to accommodate areas served exclusively by Sterling. The company also said it expects the Sterling dealer network to continue performing warranty repairs and maintenance services, supplying replacement parts and providing technical support to Sterling Truck owners.
Dealers will continue to accept Sterling orders through January 15. New truck sales will continue until the present dealer stocks are exhausted.
In consolidating its manufacturing plants, DTNA will close the St. Thomas, Ontario, plant in March 2009 – the same time its existing agreement with the Canadian Auto Workers employees expires. This plant manufactures Sterling medium- and heavy-duty trucks.
DTNA will also close its Portland, Oregon, plant in June 2010, when those current labor contracts expire. The current Western Star commercial production there will move to the Santiago, Mexico, plant, and the Freightliner-branded military vehicle production will move to one of DTNA’s facilities in the Carolinas by mid-year 2010. The closing of the Portland plant will not effect the location or operation of the company’s Portland headquarters.
DTNA plans to start production at its new Saltillo, Mexico, plant in February 2009, where it will manufacture the Freightliner Cascadia model.
The company estimates 2,300 workers in the St. Thomas and Portland plants will be affected by mid-year 2010, which includes the 720 workers who will be laid off from St. Thomas in November of this year. DTNA also plans to reduce its salary employees by approximately 1,200 positions, with over half related to the Sterling brand discontinuation.
DTNA will offer a voluntary separation program to employees, and the company plans to take other measures to help all affected employees.
