Daimler to Cut 3,500 Jobs in U.S., Canada

Plants in Ontario, Canada and Portland, Ore. will be closed, while production would increase at two Mexican factories.

Auto and truck maker Daimler said on Oct. 14 it would cut 3,500 jobs in the U.S. and Canada in the face of slumping demand. The job cuts were the result of a decision to discontinue the group's Sterling Trucks brand in March 2009, a statement said.

Plants in Ontario, Canada and Portland, Ore. will be closed, while production would increase at two Mexican factories. Some 2,300 workers at the Canadian and U.S. plants would be directly affected by the closures, along with another 1,200 administrative workers. The total number represents more than one quarter of Daimler's North American heavy truck workforce.

"A voluntary separation program will be available as well as other measures to offer flexibility and choice to affected employees," the company said.

Daimler, the world's biggest maker of heavy trucks, would make additions to its Freightliner and Western Star lines "to address market segments that have been served by Sterling offerings" until now. The decision was taken "in response to continuing depressed demand across the industry and structural changes in the company's core markets," a statement by Daimler Trucks North America (DTNA) said.

It was was expected to produce annual savings of $900 million. Costs were estimated at $600 million meanwhile, it added.

A Daimler spokeswoman said the sector was subject to regular cycles, and that the group had foreseen diminished demand late this year and early in 2009."It is is falling back more sharply now," she added. In addition, "Sterling and Freightliner occupy the same (market) segment. But Freightliner has stronger sales and is our top-of-the-line."

The statement quoted Daimler board member Andreas Renschler as saying: "We are confident that this forward-looking strategy for DTNA is the right measure to address the challenges in the North American market."

Copyright Agence France-Presse, 2008

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