Sterling brand dumped because of failing economy

By: Jason Whittaker

In a shock announcement, Daimler Trucks will discontinue its Sterling truck brand from March 2009. There is no word on when

In a shock announcement, Daimler Trucks will discontinue its Sterling truck brand from March 2009.

There is no word on when the final right hand drive trucks for Australia and New Zealand will roll off the line, but the company will build the final Sterling in March.

The closure coincides with the end of a deal between the manufacturer and the Canadian Auto Workers union.

Andreas Renschler, worldwide head of Daimler Trucks, says the move comes in response to continuing depressed demand across the industry and structural changes in the company’s core markets.

"It is a principle of our ‘Global Excellence’ strategy to strive for benchmark profitability and to address structural market changes in a timely and consequent way," says Renschler.

"We are confident that this forward-looking strategy for DTNA is the right measure to address the challenges in the North American market."

As a result, he says Daimler Trucks will concentrate on a ‘two brand’ strategy in North America, using expanded ranges of both Western Star and Freightliner trucks.

DTNA will also close the Portland, Oregon, Truck Manufacturing plant, in June 2010, when current labor contracts expire.

Western Star commercial production will be assigned to the company’s Santiago, Mexico plant, while production of Freightliner-branded military vehicles will take place at one of the company’s facilities in the Carolinas by mid-year 2010.

Start of production at DTNA’s new Saltillo, Mexico manufacturing plant will occur as planned in February 2009, produce the new flagship Cascadia model.

As a result, DTNA expects to achieve annual earnings improvements of $900 million by 2011.

The local arm of the company has moved to reassure owners they will not be forgotten.

Ken Matthews, managing director of commercial vehicles for Mercedes Benz Australia Pacific, says the company will continue to provide service and parts support for the next 10 years after the end of production.

He says the company has also provisioned a number of trucks to ensure customers who wish to purchase Sterling trucks will be able to do so through into the transition into the Freightliner brand.

"The Sterling brand has built a considerable following in its ten years on the Australia New Zealand market, we will actively encourage and support those Sterling customers to transfer to the Freightliner brand," Matthews says.

"We are well advanced in our plans with Freightliner to ensure that our commercial vehicle customers will benefit from this focus on a single US brand in Freightliner. Our customers expect and demand that they will continue to enjoy the most comprehensive commercial vehicle choices."

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