Big Sterling News

[Mack 3P]

Daimler To Drop Sterling Truck Brand

DTNA announces major restructuring; Sterling brand to be discontinued. Daimler Trucks North America (DTNA) today announced a comprehensive plan to adjust and strengthen company operations in response to continuing depressed demand across the industry and structural changes in the company's core markets. The measures to be implemented address key areas of DTNA's operations:

The Sterling Trucks brand will be discontinued effective in March 2009. Additions to the Freightliner and Western Star product ranges will be made to address market segments that have been served exclusively by Sterling offerings in the DTNA stable. By concentrating the company's considerable technical and marketing resources on a more focused model line-up, DTNA expects to drive an even more attractive program of innovation in safety, environmental impact, and user productivity that will further strengthen the leadership position of Daimler Trucks in the North American commercial vehicle market.

As a result of the decision to discontinue the Sterling brand, the St. Thomas, Ontario, plant will cease truck manufacturing operations in March 2009, concurrent with the expiration of the existing agreement with the Canadian Auto Workers members employed there. The plant currently manufactures Sterling medium and heavy-duty trucks.

DTNA will also close the Portland, Oregon, Truck Manufacturing plant, in June 2010, when current labor contracts expire. Western Star commercial production will be assigned to the company's Santiago, Mexico plant, while production of Freightliner-branded military vehicles will take place at one of the company's facilities in the Carolinas by mid-year 2010.

Start of production at DTNA's new Saltillo, Mexico manufacturing plant will occur as planned in February 2009. The plant will produce Freightliner's new flagship Cascadia model.

As a result of the measures cited above, DTNA expects to achieve annual earnings improvements of $900 million by 2011. The EBIT effects amount to $600 million in total: approx. $350 million against the fourth quarter of 2008 (including approx. $300 million, which are primarily related to employee and dealer separation), $150 million in 2009 as well as expenses of $100 million in 2010 and 2011 in total.

An estimated 2300 workers in the St. Thomas and Portland plants will be affected by mid-2010, on timelines related to the plant closures noted above. This figure includes 720 workers at the St. Thomas plant to be laid off in November 2008 as already announced in July.

The company also plans to reduce its salaried workforce by approximately 1200 positions, with over half directly related to the Sterling brand. A voluntary separation program will be available as well as other measures to offer flexibility and choice to affected employees. Daimler news release, 2008-10-14

[ThaddeusW]

Looks like the last of Ford's die hard fans will be disappointed. Sad to see them go but that's the way the market works. I know they might not have been the best truck make out there but I sure liked the way they looked, along with their older Ford models too.

[mackboy]

hey guys

first you bring the brand back alive and than you kill it again thats very good for your reputation.you can see now everywhere in the world is panic now its almost like the crises in the 30 years greetings rene MACK FOREVER

[dak49]

I can't imagine why any company with plants in the U.S. and Canada would want to relocate to Mexico. I remember

Singer sewing machine co. did that and 6 months later they moved back to Connicut. They said they couldn't get the quality they needed from the workers in Mexico. Maybe Mercedes knows something the rest of us don't.

Good Day

Dak49

[fjh]

Ya well don't get too comfee yet, Mack will get the axle after they finish ruining the reputation.the V people are working hard at it!Don't be too surprized if it happens!

[Mack 3P]

I can't imagine why any company with plants in the U.S. and Canada would want to relocate to Mexico. I remember

Singer sewing machine co. did that and 6 months later they moved back to Connicut. They said they couldn't get the quality they needed from the workers in Mexico. Maybe Mercedes knows something the rest of us don't.

Good Day

Dak49

Cheap Labor - Expensive Labor = More Profit

Paccar has a plant in Mexico

Navistar has a plant in Mexico

Volvo has a bus plant in Mexico (Speculation they will move truck production there in the future)

Freightliner has two plants on Mexico

I think Mack and International will profit the most without the Sterling brand in the market.

Western Star is going from a Canadian truck brand to Mexican... eh

[Mack 3P]

"The Sterling brand, a maker of medium-sized models which accounts for 15 percent of Daimler's U.S. truck output, "never met expectations,'' Daimler AG spokesman Heinz Gottwick said today. The unit was set up in 1998 from truck operations that Daimler bought a year earlier from Ford Motor Co. With orders remaining on a "downward trend'' and only a "moderate rebound'' foreseen in the U.S. economy in 2009, about 88,000 trucks have been "sidelined'' in North America as companies go bankrupt or are taken over, Chris Patterson, head of the trucks division in the region, said on a conference call. "We're not happy with the achieved return this year'' at Daimler's North American truck business, Patterson said. Conversely, with costs at European plants running at lower levels, Daimler is "better prepared'' to cope with a shrinking market there, Andreas Renschler, head of Daimler's global truck operations, said on the call. The company is closing its "highest-cost'' plants as it can't wait for possible government bailouts to maintain profit, and expects the remaining brands to pick up customers from Sterling."

Bloomberg.com, 2008-10-14

[other dog]

...guess i'll never get to drive the orange Sterling with blue fenders I always wanted...