Chris Carlson ([email protected])

Daimler Trucks North America (DTNA), Portland, Ore., has decided to close its Sterling Truck division. The move comes as part of a comprehensive plan to adjust and strengthen company operations after a steady drop in demand across the industry and structural changes in the company's core markets.

The plant in St. Thomas, Ontario, Canada, where the Sterling line is manufactured, will close in late March 2009.

Costs of operating the plant remained too high, according to the company, despite effects from pending government bailouts, and the company expects its remaining brands to pick up Sterling's customers. "Sterling's share of the annual refuse market is 5 percent," says Richard Shearing, product strategy manager for Sterling and Western Star. "Comparatively speaking, the refuse market makes up a low percentage of Sterling's overall business. "Our sister brand Freightliner has traditionally performed better in this market and with our exit we anticipate that the trend will continue."

Sterling dealers will accept orders until Jan. 15, 2009. According to DTNA, the Sterling line, which was launched in 1998, has only achieved 25 percent of Freightliner's market penetration despite ongoing improvement initiatives and product launches.

In addition to the closing of the St. Thomas facility, DTNA announced it will close its truck manufacturing plant in Portland, and move its Western Star commercial production to the company's Santiago, Mexico, plant.

Production of its Freightliner-branded military vehicles will be moved to one of the company's plants in either North Carolina or South Carolina by summer 2010. The DTNA corporate office will remain in Portland.