Freightliner work force reductions may affect 4,000

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Freightliner announced plans Tuesday, Dec. 5, for production rate adjustments at its truck manufacturing plant in St. Thomas, Ontario. About 800 employees will be idled as a result, says Freightliner, who notified the affected workers Monday, Dec. 4. The St. Thomas plant, operated by Freightliner Canada, produces the company’s Sterling-brand heavy- and medium-duty trucks.

These 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, according to Freightliner; 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. According to Freightliner, truck buyers in all markets are showing hesitation to purchase trucks equipped with the new engine technology necessary to meet the Environmental Protection Agency’s diesel exhaust emissions standards that go into effect in Canada and the United States on Jan. 1.

Depending on specification and weight class, Freightliner says its vehicles are subjected to price increases ranging from $4,600 to $12,500, before application of taxes, for the new engines. The truck maker says the costs associated with the low-emissions initiative are borne almost entirely by the truck manufacturing industry’s employees, suppliers, shareholders and dealers.

“Work force reductions are always the last thing any of us want to do,” says Chris Patterson, president and chief executive officer of Portland, Ore.-based Freightliner. “Unfortunately, it has become necessary at this point, as the entire industry is dealing with an extraordinary market situation.

“We will continue to monitor the market closely and make adjustments accordingly, but we anticipate further reductions of up to 3,200 workers in the first few months of 2007,” Patterson says. “We are anticipating that demand will begin to recover in the second half of the year, as our customers gain confidence in the new technology, and their existing vehicles suffer the effects of aging. We expect to be able to make some positive work force adjustments at that time.”