Sterling Inaugurates Canada Plant; Should Build 12,000 Trucks in '98

GOVERNMENT officials, company executives, and trade press gathered July 22 to formally inaugurate the factory in St Thomas, Ontario, Canada, where Sterling conventionals will be manufactured. Built originally to produce Freightliner-brand trucks, the plant underwent an extensive renovation and expansion.

To accommodate production of Sterling trucks, the plant was expanded by 40% to 440,000 square feet, while more than $41 million was invested in new tooling and other improvements. The workforce is being increased 45% to 1,450. Truck production at the plant was expected to reach 80 a day before the end of September.

"St Thomas is the ideal location for this plant, and it helps make Sterling a truly North American truck," said James L Hebe, president and chief executive officer of Freightliner Corporation. "This is the newest and most modern truck plant in Canada.

"We have a dedicated, skilled workforce here. We totally rebuilt and retooled the plant and didn't lose even a day of production. There weren't even any layoffs. I believe this will be one of the best acquisitions ever made by Daimler-Benz (AG)."

Acquired from Ford Sterling is the brand name created for the Ford Heavy Truck products that were acquired last year by Freightliner Corporation, a wholly-owned affiliate of Daimler-Benz AG. Besides the St Thomas plant, Sterling trucks are built at Freightliner's Mt Holly, North Carolina, plant.

"The truck models of our new Sterling brand ideally complement our range of commercial vehicles in the extremely important North American market," said Juergen E Schrempp, Daimler-Benz chairman. "The Sterling brand will further consolidate and strengthen our leading position in North America. This is the most important market for Daimler-Benz outside Germany.

"We have been very successful in North America. We took over Freightliner when it was only a minor player, and it is now a veritable jewel of our commercial vehicle division. The Sterling will continue this story of success."

Kurt J Lauk, the Daimler-Benz board member responsible for the commercial vehicle division, said that Daimler-Benz has made a long-term commitment to the Sterling brand and will work to make it a worldwide success. "Our objective is to continue the Freightliner success story with the Sterling," he said. "During the past four years, Freightliner expanded its market leadership position from 24% to 30%. We expect Sterling to contribute to a 35% combined share."

Hebe added that Freightliner production is fully booked up through the rest of the year. Demand is outstripping the company's ability to respond.

"We needed a new brand for additional growth opportunities, and Sterling meets that need," he said. "Sterling is targeted at the vocational market and does not compete head on with Freightliner."

Sterling Contribution Freightliner will build approximately 121,000 trucks in 1998, and Sterling will add another 12,000, according to Hebe. By 1999, Sterling will be turning out 20,000 trucks a year. Hebe predicted that North American truck production will total 230,000 vehicles this year. Annual production should reach 300,000 by 2005.

Sterling serves the market with two lines of heavy-duty conventional vehicles--the A-line and L-line--plus the Class 7-8 Cargo low cabover truck and tractor. The A-line consists of on-highway tractors with premium diesel power and is available in daycab and sleeper versions. The L-line of vocational tractors and trucks are offered in mid-range and premium diesel engine configurations. The Cargo is targeted at vocational and distribution applications.

In January, Sterling introduced the L7500, a high-visibility vehicle with excellent maneuverability. Offered in truck and tractor versions, it is well-suited to urban applications, such as pick-up and delivery.

Sterling products are being sold through a network of 200 dealers in the United States and Canada. Efforts are underway to expand the network, which may eventually stretch into Mexico.

Sterling truck buyers are able to use the financial resources of the Sterling Truck Financial Services unit of Mercedes-Benz Credit Corporation for flexible financing options. In addition, Sterling customers are supported by Alliance, the Freightliner subsidiary that provides dedicated parts and service support.

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