In a statement released by the company, Freightliner said sales of heavy duty trucks was down 45% from a year ago and medium duty truck sales had dropped 21%.
"We regret that this action is necessary," said Freightliner spokesman Chris Brandt, "but this is one of the most challenging truck markets ever."
The layoffs will take place in Freightline’s Mount Holly, NC (475 employees) and Santiago Tianguistenco, Mexico (284) plants, a Sterling Trucks plant in St. Thomas, ON (181) and at a Western Star plant in Kelowna, BC (180). Production will be dropped at each plant as well.
Although the most recent round of Freightliner layoffs are considered permanent, Brandt said workers will be called back based on seniority should the economy pick up. He said the company would continue to pay health and life insurance benefits for the displaced employees for six months.
Manfred Gentz, CFO of Freightliner’s parent company, DaimlerChrysler AG, said last week he expects to have a turnaround plan in place for the company’s Freightliner heavy trucks unit within the last few months of this year. According to Gentz, Freightliner is one of the company's “most difficult holdings at the moment.”