Freightliner to build new truck plant in Mexico

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Freightliner announced today, Dec. 20, that it plans to construct a new $300 million truck manufacturing plant in Saltillo, Coahuila, in northern Mexico. Dedicated to the production of Freightliner and Sterling trucks, the new facility will provide additional capacity to accommodate Freightliner’s long-range product planning, including an expected upturn in industry demand in 2009.

“This new facility underscores our confidence in the NAFTA truck market, and our bullish mid-term outlook for industry recovery post-2007,” says Chris Patterson, president and chief executive officer of Portland, Ore.-based Freightliner. “Frankly, we were not able to produce what we could have sold in 2006 due to capacity constraints. We expect another surge in customer demand in 2009 prior to the next round of EPA emissions regulations, and the construction of this new plant will ensure that we are fully prepared.”

The Saltillo plant is the second Freightliner manufacturing facility to be located in Mexico, joining the Santiago Tianguistenco plant that produces Freightliner-branded heavy- and medium-duty trucks for domestic Mexico sales as well as export to Latin America, the United States and Canada. The new one million-square-foot facility in Saltillo is located near an existing Chrysler plant, which offers opportunities for synergy such as the extension of a supplier park and railroad terminal.

A professional supplier base and improved logistics infrastructure have made Mexico a popular choice for many NAFTA-based truck manufacturing companies and suppliers. “Five major U.S.-based OEMs now have Mexican manufacturing capability, including Freightliner,” says Roger Nielsen, chief operating officer. “DaimlerChrysler has had excellent success in recent years with quality, cost and efficiency through our Mexican operations, and we fully expect the new plant in Saltillo to set benchmark standards for DaimlerChrysler Truck Group manufacturing facilities worldwide.”

“Today, we begin a new chapter in DaimlerChrysler’s Global Excellence strategy,” says Andreas Renschler, member of the DaimlerChrysler board of management responsible for the Truck Group & Buses. “Freightliner has been a pillar of performance and profitability for the Truck Group and DaimlerChrysler. We are pleased to support this expansion of Freightliner’s manufacturing network, which is an important step toward the optimal global production network for the Truck Group.”

The 740-acre site also will include a PDI/transporter center and test track, as well as room for future expansion. The plant could produce up to 30,000 trucks annually, and employ up to 1,600 production and management personnel. Groundbreaking is planned for the second quarter of 2007, with start of production planned for early 2009.

Company executives are working closely with federal and state officials in Mexico to bring this major project to fruition. “We are honored and delighted to welcome Freightliner to Saltillo,” says Governor Humberto Moreira. “This will be a tremendous economic boost to the state of Coahuila and will become a shaping force to consolidate the expansion of the automotive cluster in the State.” The plant will generate about 1,600 jobs directly, as well as an additional 1,100 jobs within the local Mexican supplier base.

“Under the administration of President Felipe Calderon, this project becomes an icon of Mexico’s capability to attract leading companies in automotive manufacturing,” says Dr. Eduardo Sojo, secretary of economy.