Freightliner cutting jobs in anticipation of '07 slowdown

| 10/4/2006

Freightliner has offered voluntary buy-outs of 1,900 white-collar employees at its headquarters in an effort to cope with the expected downturn in truck sales in 2007.

Chris Patterson, chief executive officer of Freightliner, told The Oregonian newspaper there very well could be manufacturing workers laid off at all of the company’s North American facilities. He told the newspaper he could not predict the total number of people who could be laid off.

Beyond the industry-wide expected downturn in truck sales because of the 2007 emission standards, Patterson also talked about a weakening of the economy and freight demand.

“We’re hearing accounts of trucks being parked for lack of freight, rather than a lack of drivers,” he told The Oregonian. “But it’s a funny business. Things can pick up real quick.”

Donald Broughton, a transportation equity analyst with A.G. Edwards and Sons, told Land Line freight demand was down 2.9 percent in August, compared to August 2005. He also pointed out that truck fleets have grown 2 to 3 percent in the past 12 months contributing to the soft market in trucking.

Complicating concerns of a downturn in truck sales and lower freight demand, Freightliner has been pressured by its parent company, Daimler Chrysler, to reduce costs and increase profits, according to The Oregonian interview with Patterson.

During the summer, Patterson told workers at the Portland, OR, plant that production of Freightliner-brand trucks would be moved from Portland to factories in Mexico or North Carolina, a union official told The Oregonian.

The change will likely lead to significant layoffs, possibly even the elimination of an entire work shift, said Joe Kear, who represents more than 1,200 Freightliner workers for Machinists District Lodge 24.