Daimler Trucks drops Sterling brand, closes plants

Tue Oct 14, 2008 10:23am EDT
 
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By Michael Shields

FRANKFURT (Reuters) - Daimler AG will drop its Sterling truck brand in March and close two North American plants to address continuing depressed demand across the industry, the world's biggest truckmaker said on Tuesday.

Daimler Trucks North America said it expected to improve annual earnings by $900 million by 2011 as a result of the steps, which include closing a plant in St. Thomas, Ontario, next March and a factory in Portland, Oregon, in June 2010.

Some output will switch to Mexico and the Carolinas.

Around 2,300 workers at the two plants will lose their jobs, including 720 workers in St. Thomas whose layoffs were announced in July. It will also eliminate 1,200 white-collar positions in North America, over half of which were at the Sterling brand.

"We are confident that this forward-looking strategy ... is the right measure to address the challenges in the North American market," Trucks division head Andreas Renschler said.

Daimler had said for months it was awaiting a rebound in the North American heavy trucks market. Its trucks sales there fell 18 percent in the first eight months of the year, as the market contracted amid a cooling economy.

A spokesman said the Sterling brand, which sold around 16,000 units in North America last year, had not met expectations and that Daimler was confident its customers would switch to the larger Freightliner brand.

Freightliner's share of the NAFTA heavy truck market was 23 percent last year versus 5 percent for Sterling and 1 percent for the premium Western Star brand, the spokesman said   Continued...