DaimlerChrysler's Freightliner will fire 675 workers

PORTLAND, Ore. October 30, 2002: Jeff Green writing for Bloomberg reports that DaimlerChrysler AG's Freightliner unit, the world's biggest heavy-truck maker, will fire about 675 workers and shut two plants for eight days as demand slows because of new U.S. truck-engine pollution rules.

The unit will temporarily close two North Carolina plants, in Cleveland and Mount Holly, in January, laying off 3,280 workers. The company will also fire 675 temporary and permanent workers at Cleveland and a St. Thomas, Ontario, truck plant in the first quarter of 2003, spokesman Chris Brandt said. More temporary shutdowns are expected in February and March, the company said.

Truck orders are falling in the U.S. because transportation companies have already stocked up on vehicles with engines that met the previous pollution rules, citing concerns about the new engines' cost and reliability.

Freightliner said it still expects to report a "slight operating profit" this year after exceeding cost-cut targets of $450 million by $100 million. The company fired 2,700 workers in 2001 as part of a plan to return to profitability this year. It has reduced its workforce by more than half since 1999.

Caterpillar Inc., the world's second-biggest maker of heavy-duty diesel engines, DaimlerChrysler's Detroit Diesel engine unit, along with Paccar Inc. and Navistar International Corp., the world's third and fourth largest truckmakers, also have announced layoffs because of the slowdown.

Freightliner, which employs 13,000 people in North America, said in a statement it may also reduce workers at a Santiago, Mexico plant and a parts plant in Gastonia, North Carolina.