Daimler to cut 3,500 jobs in Sterling Trucks unit closure

Daimler AG, the worldÔÇÖs largest maker of heavy vehicles, will close its Sterling Trucks division in North America, cutting 3,500 jobs as it aims to halt production and move manufacturing to Mexico. ┬á The Sterling brand, a maker of medium-sized models which accounts for 15 percent of DaimlerÔÇÖs US truck output, ÔÇ£never met expectationsÔÇØ after its purchase in 1998 says Heinz Gottswick, a spokesman for the company. ┬á Dailmer said in a statement today that the reorganization is aimed at saving $900 million a year by 2011, and includes the closure of plants in the US and Canada at a cost of $600 million. ┬á Daimler, along with its competitors Volvo and Paccar have suffered a dive in truck sales as growth slows and credit markets dry up. The Stuttgart, Germany-based company, whose US deliveries fell 30 percent in the first half of the year, will shut SterlingÔÇÖs St. Thomas, Ontario factory in March and another in Portland, Oregon in 2010 when labor deals expire. ┬á The plant closures will cut 2,300 manufacturing jobs and 1,200 administrative positions, Daimler said. Fourth quarter costs will amount to $350 million, plus $150 million next year and $100 million over 2010 and 2011, mainly for severance pay and dealer compensation. ┬á A new freightliner plant will be opened in Mexico and the production of Western Star trucks will be transferred to a plant in Santiago, Mexico. The Freightliner unit┬áis continuing its plans to start making its Cascadia model at a new factory in Saltillo, Mexico, and will shift military-vehicle manufacturing to plants in North and South Carolina, with the North American truck division headquarters remaining in Portland. ┬á Andreas Renschler, head of the truck division said in a recent statement, ÔÇ£We are confident that this forward-looking strategy for Daimler Trucks North America is the right measure to address the challenges.ÔÇØ