Daimler to discontinue Sterling Trucks brand in March

Daimler Trucks North America today, Oct.14, announced that it will discontinue the Sterling Trucks brand in March 2009 as part of a response to continued low truck sales and structural changes in the market.

Other elements of the plan include closing the St. Thomas, Ontario, manufacturing plant – where Sterling trucks are built – in March when the existing agreement with the Canadian Auto Workers expires. And the 39-year-old Portland, Ore., plant will close in June 2010, sending Western Star production to Santiago, Mexico, and Freightliner military truck production to a plant in the Carolinas. A migrating supplier base and high logistics costs had resulted in higher production costs in Portland.

“Plans based on an expectation of brief, sharp market events driven by regulatory change, followed by periods of reasonable growth, are out of step with the emerging realities of the latter part of this decade,” said Chris Patterson, president and chief executive officer of Daimler Trucks North America. “We’ve examined every part of our organization in light of the changed economic environment.”

In announcing Sterling’s demise, Daimler noted that the brand’s models have substantial overlap with offerings in the Freightliner Trucks product line and have achieved only one-fourth the Freightliner market share. Daimler launched Sterling in 1998 as a replacement brand for the newly acquired Ford heavy-duty truck business. Daimler said it would be adding to the Freightliner and Western Star product ranges to address market segments that had been served exclusively by Sterling.

Daimler said it expects that the Sterling dealer network will continue to perform warranty repairs and maintenance services, supply replacement parts and provide technical support for Sterling Truck owners. Dealers will continue to accept orders until Jan. 15, 2009, and new truck sales will continue until present dealer stocks are depleted.

The decision to close the Portland plant will not affect the location or operation of the company’s headquarters in Portland, Daimler said. The company recently moved sales, marketing and customer support functions to Fort Mill, S.C., leaving 2,200 administration, product development, procurement and information technology employees in Portland.

Daimler said production at its new Saltillo, Mexico, plant, which will produce the Cascadia, will begin as planned in February.