Daimler Closing Oregon Plant In 2010

Germany-based Daimler AG said it would close a Portland plant known for producing Freightliner trucks after its labor contracts expire and move production to Mexico and the Carolinas.

PORTLAND, Ore. (AP) -- Portland's economy took a hit Tuesday with the announcement that the plant long known for producing Freightliner trucks will close in 2010.

Germany-based Daimler AG said Tuesday it would close the plant after its labor contracts expire and move production to Mexico and the Carolinas.

The plan is supposed to help Daimler as demand softens throughout its industry, the company said in a release.

The 39-year-old plant has about 900 workers who belong to the Machinists, Teamsters and several other unions, said Joe Keir, a union business representative.

The company told workers in a Tuesday morning meeting that the plant would close, said Derbert Greer, a machinist who's worked at the plant since 1978. But many inside the plant had already learned of the decision from news reports, he said.

Greer described the mood inside the plant as "somber."

"I think they could have gone a little easier on us," he said. "It's just a big loss to all of us."

Greer, 51, said he's worried that he and his co-workers will enter a tight job market come 2010.

"It'll be mighty tough for us old-timers," he said. "You can't raise your sons and daughters on McDonald's or Starbucks or another low-paying job."

Keir blamed the North American Free Trade Agreement for the plant's closure, saying it "paved the way for this to happen."

Keir said the union will negotiate its members' severance packages with Daimler in January. "The company knows if they want to keep an equal product going in 2010 they can make that happen with a decent severance package," he said.

Though the union expected the company to close its Sterling trucks brand, many workers didn't anticipate Daimler relocating its Western Star line.

Production of the Western Star truck will be assigned to the company's Santiago, Mexico, plant, while production of Freightliner-branded military vehicles will take place at one of the company's manufacturing facilities in the Carolinas by mid-2010.

The company said it expected to start production at a Saltillo, Mexico, plant as scheduled in February 2009, building Freightliner's new flagship Cascadia model.

Like many other workers at the plant, 20-year plant employee Eugene Thurston said he was shocked.

"We thought we could hang in there," said Thurston, who assembles cabs. "I never thought it would happen in a million years."

Meanwhile, Michael McQuill, who has also been at the plant for about 20 years, said the plant's closing was simply a matter of a time.

"Whether it was going to be 2010 or 2015," he said, "something was going to happen sooner or later."

Gov. Ted Kulongoski acknowledged the role of the truck-making factory, saying it had "contributed significantly to Oregon's economy, employing highly skilled workers with high wage salaries."

He pledged assistance to the workers and said he would continue to focus on attracting "sustainable industries," such as the solar energy businesses of SANYO and SolarWorld.

The move also comes nearly a year after Daimler Trucks North America announced it was moving hundreds of white-collar jobs out of Portland headquarters to new offices in South Carolina.

But the end of production at the Portland manufacturing plant will not affect the location or operation of the company's North American headquarters on Swan Island, where about 2,200 people work.

More in Operations