Daimler to drop Sterling truck brand

Daimler AG said Tuesday that its North American truck division will drop its Sterling brand and end truck production at two plants in the U.S. and Canada by mid-2010 as it moves to deal with depressed demand.

Daimler Trucks North America will discontinue the Sterling Trucks brand next March, but will make additions to its Freightliner and Western Star ranges to cover market segments that the brand has served, the Stuttgart-based parent company said in a statement.

Daimler said truck manufacturing at its St. Thomas, Ontario plant will end in March 2009, when its current agreement with Canadian Auto Workers members at the facility expires.

It said DTNA also will close its Portland, Oregon truck plant in June 2010, when current labor contracts there expire. The company said Western Star production will be assigned to a plant in Santiago, Mexico, while Freightliner-brand military vehicles will be produced at one of its facilities in the Carolinas by mid-2010.

Daimler said that about 2,300 workers at St. Thomas and Portland will be affected by mid-2010. That includes previously announced layoffs of some 720 workers at the Canadian plant, whose jobs will go next month.

It also plans to cut its administrative work force by about 1,200 — with more than half of those directly related to the Sterling brand. It said a voluntary separation program will be offered.

Daimler said in a statement that the plans were drawn up "in response to continuing depressed demand across the industry and structural changes in the company's core markets."

Daimler said it expects the changes to improve DTNA's earnings by $900 million per year by 2011.

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