Daimler to close Ontario truck plant: 1,400 jobs to go

Daimler AG is shuttering its truck-making facility in St. Thomas, Ont., costing the area 1,400 jobs, the company announced Tuesday.

Daimler AG is shuttering two truck-making facilities, one in St. Thomas, Ont., at a cost of 2,300 jobs, the company announced Tuesday.

Daimler is closing the St. Thomas plant and another in Portland, Oregon as part of the company's strategy to pare down its ailing truck operations and save $600 million US.

"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, the executive for Daimler Trucks.

Daimler wants to ditch its Sterling brand trucks and just make Freightliner and Western Star vehicles in this automotive category.

The St. Thomas facility employs approximately 1,400 and was already scheduled to chop 720 jobs as the company eliminated a second shift at the plant.

Daimler said it will shut the operation entirely by March 2009 while the Portland facility, which also makes Sterling trucks, will close in 2010.

Dragging demand

Similar to the experience of many car makers, Daimler has found demand for its larger, more fuel-intensive vehicles shredded as the economy flounders and oil prices rise.

Daimler sold 311,000 new trucks of all brands during the January-to-August period compared to 309,656 for the same period one year earlier.

In its second quarter ended July, Daimler experienced a 25 per cent reduction in its net profit and, at that time, said it was cutting 1,500 factory jobs and eliminating a shift at Freightliner.

The company said the latest move will save it $600 million and should boost profits by $900 million annually starting in 2011.

Besides the factory jobs, Daimler said it also expects to cut 1,200 salaried positions, about one-half related to the Sterling truck brand.