BREAKING NEWS: Daimler kills Sterling brand: St. Thomas plant shuttered

TORONTO — Sterling Trucks is no more. Parent company Daimler Trucks North America will eliminate the Sterling badge from its commercial truck lineup starting next March, according to media reports.

Daimler blamed its decision on "continuing depressed demand across the industry and structural changes in the company’s core markets."

Surly, the economic collapse and freezing of credit south of the border must have also played into the decision.

Furthermore, the truckmaker’s assembly plant in St. Thomas, Ont. will be shut down next spring. The timing apparently coincides with the expiry of the company’s labor contract with the Canadian Auto Workers union.

The Canadian-based plant makes the Sterling HX heavy-duty truck and the Acterra medium-duty vehicle.

Sterling has always struggled to find an identity
says a DC spokesman in Germany.

 About 2,000 workers will be affected, although layoffs for nearly 800 of those employees were already set to take effect in November.

Production was slated to drop to 35 trucks a day, down from about 75 earlier this year.

Meanwhile, a Portland, Ore. production facility will also be shuttered in 2010. And production of Western Star trucks will shift from Portland to Santiago, Mexico. Freightliner’s Cascadia model will also be built in Mexico starting in February.

The moves are expected to cost $600 million in severance pay and to compensate Sterling dealers, the company said, but will improve annual earnings by $900 million by 2011.

Some Sterling models will reportedly be rolled into Daimler’s Freightliner and Western Star truck lines.

Bloomberg News quoted DC spokesman Heinz Gottwick, as saying that the brand "never met expectations’ since it was acquired from Ford in 1998. He said the brand has always struggled to find an identity in the North American medium-duty market.

The plant closure is expected to further erode the beleaguered vehicle parts sector and related transportation services in Southern Ontario. Parts haulers have been reeling from several car and truck manufacturing scalebacks in recent years.

In Canada, Sterling has about five and seven percent of class 6 and 7 marketshare, respectively. IT has about 7 percent of the class 8 market in Canada as well.

Sterling accounts for only 15 percent of Daimler’s North American truck business.