25 years of Freightliner LLC as part of DaimlerChrysler AG: A German-American success story

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Stuttgart/Portland – Dr. Dieter Zetsche, Chairman of the DaimlerChrysler Board of Management and responsible for the Mercedes Car Group, Andreas Renschler, Board of Management Member responsible for the Truck Group and Buses, Chris Patterson, President and CEO of Freightliner LLC, and more than 2,500 employees in Portland, Oregon, today celebrated the 25th anniversary of Freightliner’s affiliation with DaimlerChrysler.



“In 1981, Freightliner became the first foothold in the U.S. for Daimler-Benz AG,” said Zetsche at the anniversary celebration. “Thanks to its dedicated employees and strong brands, the company has now become an indispensable part of DaimlerChrysler.”



Truck Group head Andreas Renschler said: “Today, Freightliner is not only an integral part of the DaimlerChrysler Truck Group and the pillar of our North American commercial vehicle operations; it is also the Group sales leader for our entire truck business.”



Back in May 1981, Daimler-Benz AG acquired the truck manufacturer Freightliner Corporation (headquartered in Portland, Oregon), which was relatively unknown outside of the North American truck market. At the time of the acquisition, the company had just produced the 200,000th Freightliner truck. A mere 11 years later, Freightliner went on to become the number one manufacturer of heavy-duty trucks in North America, and in 1999, it celebrated the production of its one-millionth truck.



“Today, Freightliner LLC is part of the world’s largest truck manufacturer, and is the leader in North America in trucks from 7.3 tonnes up, as well as being the largest producer of school buses, of diesel-powered recreational vehicle chassis, and those for walk-in vans used in parcel delivery service,” said Chris Patterson, President and CEO of Freightliner LLC. “Our close connection with Mercedes-Benz Trucks and Mitsubishi Fuso assures us of continued leadership in our home market for years to come.”



Originally a producer for its own freight-forwarding company



It’s hard to imagine that Freightliner originally started out as a truck manufacturer with one key goal: the production of a lighter, more durable truck that could haul more payload. In the late 1930s, Freightliner founder Leland James was President of Portland-based trucking company Consolidated Freightways (CF). Being unsatisfied with the products the company was receiving from established truck makers, Leland James hired a group of engineers who pioneered the use of aluminum components in commercial vehicles. In 1940, he helped establish Freightways Manufacturing Company in Salt Lake City to produce his innovative vehicles for CF. Freightways became Freightliner Corporation in 1942, and in 1947 Freightliner opened a manufacturing facility in Portland.



In 1950, Freightliner sold its first truck to a private carrier (the Hyster Company) and word of the new “Western truck” soon spread. Freightliner quickly moved on to establish itself as an independent brand.



For many years, Freightliner focused on the production of space-saving short-hood trucks with lightweight aluminum cabs (known as “COE” or cab-over-engine design). As a result, the brand was one of the smaller manufacturers in the sector. It was only much later in its history that Freightliner began producing classic North American trucks with standard long, or “conventional” style hoods.



Rapid advancement to number one



Daimler-Benz AG’s acquisition of Freightliner Corporation in 1981 opened the door to North America, which was the world’s largest market for heavy-duty trucks. With a market share of nine percent for 15 tonnes+ (Class 8) heavy-duty trucks and annual production of 10,000 units, Freightliner was a medium-sized manufacturer at that time. This changed very quickly, and by 1986 Freightliner Corporation was already the second- largest company for heavy-duty trucks, with a market share of 15.5 percent.



Then, in 1992, Freightliner became number one in the North American market for 15 tonnes+ trucks, and today it leads the market for all vehicles from 7.3 tonnes (Class 5) and up. Class 8 market share stood at 36.1 percent at the end of 2005, while in the market for medium-duty vehicles Freightliner commanded a 30.3 percent share over the same period. The company also leads the markets for school buses of all types, for dieselpowered recreational vehicles chassis, and for chassis used in walk-in vans engaged in parcel delivery service.



A key pillar of the DaimlerChrysler Truck Group



With annual sales of 182,400 trucks and school buses in 2005, some 21,000 employees and nine manufacturing plants stretching from Oregon to North Carolina and from Canada to Mexico, Freightliner LLC is now a key pillar of the DaimlerChrysler Truck Group. The company’s product range consists of numerous models ranging from Thomas Built school buses to Freightliner’s Coronado, the Western Star Constellation, and the hard-working Sterling L- and A-Lines. Freightliner’s corporate name changed from “Freightliner Corporation” to “Freightliner LLC” in 2000.



Strong vehicle and component brands united under one roof



The Freightliner brand itself has long since been joined by other Freightliner LLC brands: Western Star, for example, is the North American brand for premium heavy-duty trucks and has been part of the company since 2000 while Sterling (since 1998) focuses on vocational truck segments. Thomas Built Buses (since 1998) is the leading manufacturer of school buses, and Freightliner Custom Chassis (since 1995) provides chassis for North American recreational vehicles and other vehicle segments. The renowned engine manufacturer Detroit Diesel joined the Freightliner LLC family in 2004. With a share of 27 percent for Class 8 heavy-duty trucks in North America – due to the popularity of the flagship Series 60 and MBE 4000 engines (MBE = Mercedes-Benz Engine) - Detroit Diesel is the market leader, and also provides engines to fire truck and motor coach brands outside of Freightliner LLC.



Since 1992, the Detroit Diesel Series 60® has been North America’s most popular heavy-duty on-highway diesel engine. With its excellent fuel economy and highly reliable performance, the Series 60 has become the Class 8 market workhorse and will continue this tradition in 2007 when the company launches a redeveloped Series 60 to meet EPA07 emissions standards.



Closely knit engine production network



Freightliner LLC is integrated into the DaimlerChrysler Truck Group’s component network. Detroit Diesel, for example, successfully sells the heavyduty MBE 4000 and will commence assembly of the medium-duty MBE 900 engines in North America late this year.



With the best power-to-weight ratio in its class, the MBE 4000 has become the preferred engine for vocational, regional distribution and bulk-hauling operations throughout North America. These six-cylinder inline engines with 12.8-liter displacement are produced in cooperation with other DaimlerChrysler engine plants in Brazil and Germany, and are fitted with customized components in the U.S. The MBE 4000, which is used in many Freightliner LLC trucks and other Group-brand vehicles in the U.S., is closely related to the European OM 457 six-cylinder inline engine, which can be found in the Mercedes-Benz Axor truck and the Travego travel coach.



Complementing the heavy-duty diesel engines is the MBE 900 from Mercedes-Benz. The MBE 900 has been the premium engine choice for a wide range of medium-duty and vocational vehicle buyers, powering the needs of food and beverage distribution, pick-up & delivery, school bus fleets, tow truck operators, construction companies and others.



“The situation with the MBE 900 engine is similar,” said Renschler. “The four and six-cylinder units with between 4.25 and 7.2 liter displacement are currently built in Germany, but beginning in 2007 the final assembly and testing will be conducted by Detroit Diesel in the U.S. The engines are used for a wide variety of medium-duty vocational applications in trucks from Freightliner LLC.”



Axles and transmissions for North American trucks



The Freightliner Business Class M2 delivery truck already features (as standard equipment) a complete powertrain from DaimlerChrysler, with an engine, transmission and axles that are designed for complementary and optimal performance. Freightliner LLC thus offers today’s customer an efficient and integrated alternative to the more traditional “custom spec” process where trucks are developed and built using individual components chosen by the customer.



The Axle Alliance Company (AAC), a business unit of Detroit Diesel, supplies North American trucks with steering and drive axles, using German components. Detroit Diesel also offers manual transmissions for mediumduty trucks; the designation MBT (Mercedes-Benz Transmission) reveals the origin of the component.



Additional global networking within the Truck Group



The Mitsubishi Fuso Canter is serving as the basis for the new low cabover- engine (LCOE) vehicle “Sterling 360” from Sterling Truck Corporation, part of the Freightliner LLC family. In another development, a future generation of medium-duty commercial vehicle engines will initially be used in North America by Freightliner LLC before being launched in other markets. The European “BlueTec” concept for exhaust purification using the SCR (selective catalytic reduction) system with an AdBlue carbamide solution will likely be used in North America as well in order to meet the EPA10 standard that will go into effect in a few years.



In 2007, Freightliner and DDC will be first in the Truck Group to introduce the Heavy-Duty Engine Platform (HDEP). This common design platform will help meet European and Asian as well as NAFTA emission standards, and the need for higher power ratings. This platform will meet 2007 and 2010 emissions standards, and allow the DaimlerChrysler Truck Group to remain competitive and responsive to customers worldwide.



Preparations have been completed for implementing a common electrical and electronic structure for commercial vehicles from Freightliner LLC, Mercedes-Benz and Mitsubishi Fuso. The Group brands also plan to use common components for truck chassis and cabs. All of this will provide an effective platform upon which Freightliner LLC can continue its success story.



Freightliner LLC, which is headquartered in Portland, Oregon, is the leading manufacturer of medium and heavy-duty trucks in North America. Freightliner builds and sells 7.3 tonnes+ (Class 5 - 8) vehicles. It is part of DaimlerChrysler AG, the world’s leading manufacturer of commercial vehicles.



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