Paccar contemplates laying off 800 workers

Heavy-truck maker Paccar Inc may lay off about 800 employees, or 5% of its workforce, starting Nov 1, 2002, as tougher federal emission standards for diesel engines result in fewer orders.

The Bellevue WA-based company said it notified 500 workers who make Peterbilt trucks in Madison TN that layoffs are possible. About 268 workers at Paccar's Kenworth plant in Renton WA also may lose their jobs.

Paccar Treasurer Ron Ranheim confirmed the cuts, first reported by the Nashville Tennessean and Seattle Times newspapers, but declined to comment on what percentage the cuts represent at the individual plants. The company had a total of 16,000 employees at the end of 2001.

Several other companies have announced possible layoffs in recent weeks, including truck maker Navistar International Corp and DaimlerChrysler AG's Detroit Diesel engine unit.

Orders are expected to fall because many of the nation's largest truck fleets ordered vehicles ahead of an Oct 1, 2002, deadline for stricter diesel emission standards.

Most companies have not had a chance to test the new, more expensive engines that meet the standards. As a result, they are worried about fuel efficiency, durability, and reliability.

Stark's Truck and Off-Highway Ledger, a Chicago-based business publication, estimated that North American production of Class 8 heavy-duty trucks could fall by 13% or more in the fourth quarter from third-quarter levels.

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