- Focus on a two brand strategy: discontinuation of Sterling Trucks brand
- Consolidation of manufacturing plant network
- Expected annual earnings improvements of $900 million by 2011
- Estimated program costs of $600 million
STUTTGART, Germany and PORTLAND, Ore., Oct. 14 /PRNewswire-FirstCall/ --
Daimler Trucks North America (DTNA) today announced a comprehensive plan to
adjust and strengthen company operations in response to continuing depressed
demand across the industry and structural changes in the company's core
"It is a principle of our 'Global Excellence' strategy to strive for
benchmark profitability and to address structural market changes in a timely
and consequent way," said Andreas Renschler, Member of the Board of Management
of the Daimler AG, responsible for Daimler Trucks; "We are confident that this
forward-looking strategy for DTNA is the right measure to address the
challenges in the North American market."
The measures to be implemented address three key areas of DTNA's
Focus on a two brand strategy: discontinuation of the Sterling Trucks
The Sterling Trucks brand will be discontinued effective in March 2009.
Additions to the Freightliner and Western Star product ranges will be made to
address market segments that have been served exclusively by Sterling
offerings in the DTNA stable.
By concentrating the company's considerable technical and marketing
resources on a more focused model line-up, DTNA expects to drive an even more
attractive program of innovation in safety, environmental impact, and user
productivity that will further strengthen the leadership position of Daimler
Trucks in the North American commercial vehicle market.
Consolidation of manufacturing plant network and alignment of network
capacity with market demand
As a result of the decision to discontinue the Sterling brand, the St.
Thomas, Ontario, plant will cease truck manufacturing operations in March
2009, concurrent with the expiration of the existing agreement with the
Canadian Auto Workers members employed there. The plant currently
manufactures Sterling medium and heavy-duty trucks.
DTNA will also close the Portland, Oregon, Truck Manufacturing plant, in
June 2010, when current labor contracts expire. Western Star commercial
production will be assigned to the company's Santiago, Mexico plant, while
production of Freightliner-branded military vehicles will take place at one of
the company's facilities in the Carolinas by mid-year 2010.
Start of production at DTNA's new Saltillo, Mexico manufacturing plant
will occur as planned in February 2009. The plant will produce Freightliner's
new flagship Cascadia model.
Expected annual earnings improvements of $900 million by 2011, with
estimated program costs of $600 million
As a result of the measures cited above, DTNA expects to achieve annual
earnings improvements of $900 million by 2011. The EBIT effects amount to
$600 million in total: approx. $350 million against the fourth quarter of 2008
(including approx. $300 million, which are primarily related to employee and
dealer separation), $150 million in 2009 as well as expenses of $100 million
in 2010 and 2011 in total.
An estimated 2300 workers in the St. Thomas and Portland plants will be
affected by mid-2010, on timelines related to the plant closures noted above.
This figure includes 720 workers at the St. Thomas plant to be laid off in
November 2008 as already announced in July.
The company also plans to reduce its salaried workforce by approximately
1200 positions, with over half directly related to the Sterling brand. A
voluntary separation program will be available as well as other measures to
offer flexibility and choice to affected employees.
Further information from Daimler is available on the internet at:
This document contains forward-looking statements that reflect our
current views about future events. The words "anticipate," "assume,"
"believe," "estimate," "expect," "intend," "may," "plan," "project," "should"
and similar expressions are used to identify forward-looking statements. These
statements are subject to many risks and uncertainties, including an economic
downturn or slow economic growth in important economic regions, especially in
Europe or North America; the effects of the credit crisis which could result
in a weaker demand for our products particularly in the U.S. but as well in
the European market; changes in currency exchange rates and interest rates;
the introduction of competing products and the possible lack of acceptance of
our products or services; price increases in fuel, raw materials, and precious
metals; disruption of production due to shortages of materials, labor strikes
or supplier insolvencies; a decline in resale prices of used vehicles; the
business outlook for Daimler Trucks, which may be affected if the U.S. and
Japanese commercial vehicle markets experience a sustained weakness in demand
for a longer period than expected; the effective implementation of cost
reduction and efficiency optimization programs; the business outlook of
Chrysler, in which we hold an equity interest, including its ability to
successfully implement its restructuring plans; the business outlook of EADS,
in which we hold an equity interest, including the financial effects of delays
in and potentially lower volumes of future aircraft deliveries; changes in
laws, regulations and government policies, particularly those relating to
vehicle emissions, fuel economy and safety, the resolution of pending
governmental investigations and the outcome of pending or threatened future
legal proceedings; and other risks and uncertainties, some of which we
describe under the heading "Risk Report" in Daimler's most recent Annual
Report and under the headings "Risk Factors" and "Legal Proceedings" in
Daimler's most recent Annual Report on Form 20-F filed with the Securities and
Exchange Commission. If any of these risks and uncertainties materialize, or
if the assumptions underlying any of our forward-looking statements prove
incorrect, then our actual results may be materially different from those we
express or imply by such statements. We do not intend or assume any obligation
to update these forward-looking statements. Any forward-looking statement
speaks only as of the date on which it is made.
Daimler AG, Stuttgart, with its businesses Mercedes-Benz Cars, Daimler
Trucks, Daimler Financial Services, Mercedes-Benz Vans and Daimler Buses, is a
globally leading producer of premium passenger cars and the largest
manufacturer of commercial vehicles in the world. The Daimler Financial
Services division has a broad offering of financial services, including
vehicle financing, leasing, insurance and fleet management.
Daimler sells its products in nearly all the countries of the world and
has production facilities on five continents. The company's founders, Gottlieb
Daimler and Carl Benz, continued to make automotive history following their
invention of the automobile in 1886. As an automotive pioneer, Daimler and its
employees willingly accept an obligation to act responsibly towards society
and the environment and to shape the future of safe and sustainable mobility
with groundbreaking technologies and high-quality products. The current brand
portfolio includes the world's most valuable automobile brand, Mercedes-Benz,
as well as smart, AMG, Maybach, Freightliner, Sterling, Western Star,
Mitsubishi Fuso, Setra, Orion and Thomas Built Buses. The company is listed on
the stock exchanges in Frankfurt, New York and Stuttgart (stock exchange
abbreviation DAI). In 2007, the Group sold 2.1 million vehicles and employed a
workforce of over 270,000 people; revenue totaled 99.4 billion euro and EBIT
amounted to 8.7 billion euro. Daimler is an automotive Group with a commitment
to excellence, and aims to achieve sustainable growth and industry-leading
For further information:
For further information: Han Tjan, +1-212-909-9063, Heinz Gottwick,
+1-49-711-17-41525 Web Site: http://www.media.daimler.com