April 13, 2009 2:00 AM, EDT

Sterling Truck Corp. Closes After 11 Years

Ontario Plant Produced 257,300 Vehicles
By Frederick Kiel, Staff Reporter

This story appears in the April 13 print edition of Transport Topics.

Sterling Truck Corp. officially ended its 11-year life span last month when the last Class 8 rolled off the St. Thomas, Ontario, assembly line, part of a final order for ABF Freight System Inc.

Parent firm Daimler AG declined requests last week from Transport Topics to discuss Sterling. But Dave Elliot, president of the Canadian Auto Workers, Local 1001, which represented workers at the plant, said the final new truck, of 257,300 produced, was completed on March 4.

“Daimler began moving out most of the equipment after that and will auction off whatever remains,” Elliot said.

He said about 18 employees will remain at the 485,000-square-foot plant until May 1 to assist in the cleanup effort.

Freightliner Corp., then the North American main subsidiary of what was then Daimler-Benz, announced in February 1997 that it had bought the heavy-duty division of Ford Motor Co., TT reported at the time. It did not give the price, but news reports put it between $200 million and $300 million.

The acquisition gave industry-leader Freightliner nearly 40% of the U.S. Class 8 market, if it held onto Ford’s total share, TT reported at the time.

Sterling Truck Corp. unveiled its product line at a press conference Jan. 29, 1998, claiming it would someday dominate the heavy endof the vocational market, TT reported at the time. Freightliner said it invested $30 million in its St. Thomas plant to prepare for Sterling production.

Ford sold 12,645 Class 8 trucks in 1997, for 7.1% of the heavy-duty U.S. market that year.

In 2008, Sterling sold 7,477 Class 8 trucks, for 5.6% of the total market, down from 8% in 2007, said. The company also sold 1,822 Class 7s, 675 Class 6s, and 2,004 Classes 3-5 units during 2008.

Andreas Renschler, head of Daimler AG’s global truck group, announced in October that Sterling, which had specialized in building heavy-duty and medium-duty vocational vehicles, would be phased out because of “a fundamental change in market” in North America (10-20, click here for previous story).

“We didn’t order a single Sterling after that announcement,” Don Freeman, general manager of ATC Freightliner, Sterling and Western Star, a four-location dealership based in Tulsa, Okla., told TT. “We took delivery of the last ordered Sterling in early December and have been trying to sell the rest since,” Freeman said. He reported he still had 17 to sell.

Other Sterling dealers also said they ceased orders immediately after learning of the brand’s demise.

Terry Franklin, owner of V&H Inc., Marshfield, Wis., said he had about 110 Class 8 Sterlings left on his lots.

“Our customers aren’t really buying a truck; they’re buying the equipment we put on it, so that the fact that Sterling’s going out of business hasn’t had much effect on the prices we charge,” Franklin said.

Elliot said after current dealers orders were completed, workers at the Sterling plant made only the trucks to fulfill fleet orders.

“We were producing about 25 or 30 trucks a day during the final month of production, depending upon orders from fleets,” Elliot said. “We built the last for ABF Freight, which even sent up people to oversee production.”

Mark Bradley, director of equipment for the less-than-truckload carrier, confirmed that ABF Freight ordered 175 A-9513 Sterling trucks in what turned out to be the final order.

“Over the years, we have developed a set of specs with Sterling for a chassis that meets our requirements that other [original equipment manufacturers] couldn’t give you,” Bradley said. “It was that combination of the right specs and being economically priced that convinced us to buy them, even though they’re going out of business.”

ABF runs more than 1,200 Sterling trucks in its fleet. It is a subsidiary of Arkansas Best Corp., which ranks No. 15 on the Transport Topics 100 list of the largest U.S. and Canadian for-hire fleets.

Freeman, the Oklahoma dealer, said Sterling’s end came about because Daimler’s other two brands produce trucks that fulfill the same roles.

“We haven’t found an application that we can’t cover with Freightliner or Western Star,” Freeman said. “Daimler has tweaked a few models to fit the few applications that they couldn’t cover, and they’re rolling out additional products to cover Sterling products.”