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Freightliner re-structures with the loss of three plants

25th October 2001
Page 16
Page 16, 25th October 2001 — Freightliner re-structures with the loss of three plants
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• by Cohn Barnett The bleak situation in the North American truck market (CM1824 Oct) continues to take its toll—DajmlerChrysler's loss making Freightliner subsidiary has announced a drastic restructuring plan.

Three plants are to be closed with the loss of 1,600 production-line jobs and 1,100 white-collar jobs (25% of all salaried staff). This round of cuts will leave Freightliner with just 47% of its 1999 workforce; the firm recently imposed pay cuts of at least 5%.

Two of the plants due for closure are Canadian—Woodstock, Ontario and Kelowna, British Columbia—the third Is at Portland, Oregon.

As well as the staffing cuts, savings are planned from component and design rationalisation and halving the six current chassis platforms. To find longer term stability. Freightliner is also committing itself to a philosophy of securing profitable deals rather than Simply buying market share.

The restructuring will incur a one-off cost of .£225m but it is expected to put Freightliner back in the black in 2004.

• The slump is having a knackon effect on component suppliers. Cummins' earnings for the third quarter of 2001 were more than halved from 2000, while TAW has shed 2,400 jobs.

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Locations: Portland, Kelowna

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