Freightliner LLC, Portland OR, has announced plans to reduce its workforce at its truck manufacturing plant in St Thomas, Ontario, Canada. Eight-hundred employees will be idled as a result. The plant, operated by Freightliner Canada Ltd, produces the company's Sterling-brand heavy- and medium-duty trucks.
Freightliner said the changes are the first in a series of such measures that will affect all the company's vehicle and component assembly plants during the first quarter of 2007. As many as 4,000 production and related workers may be affected.
All manufacturers of heavy and medium trucks, as well as the suppliers of components used in their assembly, are facing a dramatic reduction in volumes presently. Truck buyers in all markets are showing hesitation to purchase trucks equipped with the new engine technology necessary to meet the diesel exhaust emissions standards that go into effect in Canada and the United States on January 1, 2007.
Depending on specification and weight class, Freightliner LLC vehicles, are subjected to price increases ranging from $4,600 to $12,500, before application of taxes, for the new engines. It is clear that all residents of North America benefit from the cleaner atmosphere that will ultimately result, but it is equally obvious that the costs associated with this initiative are borne almost entirely by the truck manufacturing industry's employees, suppliers, shareholders, and dealers, Freightliner said.
The company is anticipating further reductions of up to 3,200 workers in the first few months of 2007, but expects that demand will begin to recover in the second half of the year, as customers gain confidence in the new technology, and their existing vehicles suffer the effects of aging.