Freightliner Sets Plant Shutdowns

Freightliner LLC said it will temporarily shut down its truck manufacturing plants in Cleveland, N.C. and Mount Holly, N.C., a spokesman said Tuesday.

The closure, which will take place between Jan. 2 and Jan. 10, will be coupled with some job cuts. The DaimlerChrysler AG truck unit will lay off 138 regular and 362 temporary employees at the Cleveland plant. The layoffs are effective on Jan. 2, 2003 at Cleveland.

The company will also lay off 175 temporary employees at its plant in St. Thomas, Ontario effective Feb. 3.

Freightliner also will adjust its temporary workforce in Santiago, Mexico.

The changes, the spokesman said, are intended to adjust the company's manufacturing capacity in response to the previously anticipated sharp decline in industry Class 8 truck orders and weakness in medium-duty truck markets.

However, Rainer E. Schmueckle, Freightliner president and chief executive officer, said, "Freightliner's turnaround remains on track. We achieved profitability in the second quarter of 2002, two quarters ahead of schedule.

“We were also profitable in the third quarter of 2002 and now expect to exceed our 2002 cost savings target of $450 million by $100 million,” Schmueckle said. “As announced in our original turnaround statement, we continue to expect a small operating profit in 2003 despite much weaker market conditions."

Schmueckle said the decline in industry Class 8 truck orders was expected and relates to new engine emissions requirements that took effect Oct. 1, 2002. Many North American truck fleets ordered trucks in advance of the new emissions requirements, which are the result of consent decree agreements between several North American truck engine manufacturers and the U.S. Environmental Protection Agency.

This advanced purchasing phenomenon, he said, created a spike in industry Class 8 truck orders earlier in the year, followed by a significant decline.

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