Daimler Trucks North America said the company’s previously announced layoffs at its Freightliner production facilities will be “significantly lower” than the 1,300 jobs it had projected earlier this year.
About 340 workers will lose their jobs April 8 at the Freightliner plant in Cleveland, N.C., down from 715 potential layoffs announced in January, according to a report in the Salisbury Post. Potential layoffs at the Gastonia Components and Logistics Plant and the Mount Holly truck manufacturing plant will not take place. As previously announced, Daimler will cut 230 jobs at the manufacturing plant in Portland, Ore.
In January, Daimler announced 1,300 potential layoffs at several facilities. Now, expected layoffs total 600 jobs in Cleveland and Portland.
Although the heavy truck industry is still performing below optimal levels, present order intake and industry leading market share gains have enabled Daimler to reduce layoffs, a company spokesman said.
Daimler expects that market conditions will improve throughout 2013, and the workers could be recalled if orders increase.
“Our flexible, highly scalable manufacturing operations will be ready to recall workers impacted by the layoff if conditions continue to improve,” spokesman David Giroux said.
Despite slower economic and freight growth this year, Daimler’s outlook is driven by the extreme age of the truck population in North America, Giroux said. Presently, the average age of Class 8 trucks is beyond their normal operational lifecycle. Daimler is well-positioned to capitalize on aging equipment replacement needs with the new Freightliner Cascadia Evolution that has been proven to be the industry’s new benchmark in fuel efficiency and performance, he said.
Strong sales of Mercedes luxury cars in China and the United States helped German automaker Daimler AG post a stronger than expected 57% increase in fourth-quarter profits.
Bloomberg reported that the Stuttgart-based company, parent to Mercedes-Benz Sprinter and Freightliner, made net profit of $2.36 billion during the quarter. The company also recorded a record profit for the full year, up 29% from the year before, and increased its dividend.
But it issued a cautious outlook Thursday (Feb. 9), saying next year’s profits would only equal this year’s and that the debt crisis afflicting the 17-nation eurozone would mean a flat market in Western Europe.
In 2011 though, Daimler benefited from a strong sales performance of its Mercedes luxury brand, which saw sales jump in two key markets. They were up 42% in China and 44% in the United States. Operating earnings for the division, however, rose by a more modest 5%.
The division’s strong sales performance helped overall revenue rise 10% from the fourth quarter of 2010, coming in above forecasts.
Daimler’s Mercedes van business, including its Sprinter division, and its financial services division saw strong operating profit increases. The trucks unit, including Freightliner, expects sales to increase this year on growth in the U.S. and a recovery in Japan and is targeting an average return on sales of 8% across a business cycle starting in 2013.
Daimler AG is recognized as the biggest manufacturer of trucks worldwide, and now it is expanding its Russian commercial-vehicle presence by manufacturing Sprinter vans as part of a partnership with OAO GAZ of billionaire Oleg Deripaska.
Automotive News reported the endeavor entails around $131 million in investments from Daimler in order to make the plant ready to produce a planned 250,000 units of the delivery van annually. The GAZ plant can be found in Nizhny Novgorod.
Daimler CEO Dieter Zetsche said that the Russian commercial-vehicle market “is offering major growth prospects,” and of course it would be foolish to ignore such an opportunity. That’s why Daimler is capitalizing on the emerging market in the country, and by 2020 it expects Russia to demand 275,000 units of light commercial vehicles each year. The Russian market currently draws 177,000 units currently.
Currently, Daimler is really enjoying its dominance over the light truck segment. Sales in Brazil, China, India and Russia have increased by 64% over recent eight-month figures. Sales have increased by 27% over a nine-month period, and the van unit of the company saw a 28% increase over the past eight months. Total revenue also increased, thanks largely to a 44% increase in production to 160,000 vehicles.
German automaker Daimler AG wants to boost global sales of its Mercedes-Benz trucks by about 20% this year after selling 135,000 vehicles in 2010, the latest sign that demand for new trucks is recovering from a steep market downturn.
“With the new Actros we’ve laid the foundation for achieving this objective,” the head of Mercedes-Benz Trucks, Hubertus Troska, said in a statement Tuesday (June 21) – referring to the new generation of the firm’s best-selling truck which it presented earlier in the day in Brussels.
Daimler said it invested more than EUR1 billion to develop the new vehicle, with a further EUR1 billion invested in production locations, equipment and tools. The revamped and more fuel-efficient version of the long-distance haulage truck, which complies with the strict Euro VI emission regulation, can be ordered from July 1.
Daimler’s truck division is the world’s largest manufacturer of commercial vehicles by revenue and contributed to the Stuttgart-based firm’s recent earnings rebound, which was driven by booming sales at its core Mercedes-Benz luxury car brand.
Daimler’s truck sales increased 27% year-on-year to 89,300 vehicles in the first quarter, with revenue rising by 28% to EUR6.2 billion. The division’s earnings before interest and tax, or EBIT, more than doubled to EUR415 million from EUR130 million in the first quarter last year.
Daimler’s truck unit comprises the Mercedes-Benz, Freightliner, Western Star and Fuso brands. The product portfolio includes light-, medium- and heavy-duty trucks as well as special purpose vehicles, such as those for construction sites.
Freightliner Custom Chassis Corp. sees ”signs of life” in its diesel motorhome chassis business, according to Jonathan Randall, director of sales and marketing for the Gaffney, S.C., subsidiary of Daimler AG.
”It’s a tough market right now, as everybody is aware,” Randall said while attending the 82nd Annual Family Motor Coach Association (FMCA) Annual International Convention July 20-23 in Bowling Green, Ohio. ”But we have seen signs of life coming from areas that we hadn’t earlier. We have seen orders coming in from manufacturers at a higher pace than they had been. Our production, as a result, is up from where we were earlier this year.”
Still, Randall said Freightliner doesn’t expect to see noticeable growth in its RV chassis business until the 2nd or 3rd quarter of next year.
”That gives us time to work through what still is a tight credit market, and hopefully, consumer confidence starts to build, the economy starts to rebound and truck companies start to see more freight being shipped, which is another strong bellwether for the economy.
”Our return to normal market volumes, whatever that means, will occur with a little more stability into late 2010 or early 2011.”
Freightliner also makes chassis for school buses, commercial buses and walk-in vans. ”While all of those have experienced downturns, it hasn’t been nearly as significant as what we’ve experienced in the RV market,” Randall said. “We are near the bottom now, if not at it.”
Besides investing in development of a new hybrid diesel/electric chassis that debuted last December at the Louisville Show, Freightliner is developing new products that will be introduced later this year and early next year, Randall said. “There’s nothing that I can talk about at this point,” Randall added.
All in all, he said that Freightliner expects to emerge from the recession stronger than it was before. “We view this as an opportunity for growth for us,” Randall said. “Turmoil breeds opportunity.”