Freightliner LLC says it will cut production at all of its vehicle and component assembly plants over the next few months in moves that could affect as many as 4,000 workers.
The first action comes at the St. Thomas, Ont., truck plant, where Freightliner will lay off 800 workers beginning April 2, as it reduces truck output due to slumping demand. The company will not say how much production will be cut, but the 800 workers represent more than one-third of the plant’s 2,100-person workforce, which includes both manufacturing and office personnel.
All truck makers are facing dramatic reductions in heavy- and medium-duty truck sales due to changes in diesel exhaust emissions standards that take effect Jan. 1 and pulled sales ahead into 2006, Freightliner says. Through October, Class 4-8 sales were up 10.0% on like-2005 at 452,568 units.
The Portland, OR-based truck maker says prices on its vehicles will rise by $4,600 to $12,500, before taxes, as a result of the new engines needed to meet the emissions standards.
Freightliner is not detailing other cutbacks to come, but says it anticipates further reductions in the first few months of 2007 that will affect up to 3,200 workers.
“We are anticipating demand will begin to recover in the second half of the year, as our customers gain confidence in the new technology and their existing vehicles suffer the effects of aging,” the truck maker says in a statement. “We expect to be able to make some positive workforce adjustments at that time.”
The St. Thomas plant produces Sterling-brand heavy and medium trucks.