Daimler to close St. Thomas, Ont. Plant

The Canadian Press

Tuesday, October 14, 2008

TORONTO — Daimler AG plans to shut down its Sterling Trucks factory in St. Thomas, Ont., next March as the German-based company eliminates the Sterling brand.

Daimler Trucks North America said Tuesday that a total of 2,300 workers will be affected in St. Thomas and at another Sterling plant being closed in Portland, Ore.

This total includes 720 workers in St. Thomas 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 facility last year when the first of three shifts was cut.

In addition to the production workforce cut, Daimler Trucks North America will reduce its salaried staff by about 1,200 positions, with over half directly related to the Sterling brand.

The March closure of the factory in southwestern Ontario, which produces a range of medium- and heavy-duty trucks, will coincide with the expiry of the plant's contract with the Canadian Auto Workers union.

Daimler blamed the decision on “continuing depressed demand across the industry and structural changes in the company's core markets.”

The truck plant in Portland, Ore., will be shut in June 2010.

Meanwhile, production will start in February at Daimler's new truck plant in Saltillo, Mexico, making Freightliner's new flagship Cascadia model.

The changes are expected to cost $600-million (U.S.) but improve annual earnings by $900-million by 2011.

With the elimination of the Sterling badge effective in March, some of its products will be added to Daimler's Freightliner and Western Star truck lines.

Focusing on two brands will “drive an even more attractive program of innovation in safety, environmental impact, and user productivity,” the company stated.