Freightliner LLC Announces Production Adjustment, Workforce Reduction at Portland

Due to a continuing downturn in the North American heavy-duty truck manufacturing industry, Freightliner LLC will reduce production rates and manufacturing workforce at its Truck Manufacturing Plant and Parts Manufacturing Plant in Portland, Oregon. According to Freightliner President and CEO Jim Hebe, a combination of high fuel prices, higher interest rates and a general economic slowdown has led to a significant decline in orders for heavy-duty trucks over the past year. Net orders for heavy-duty trucks decreased 38 percent in 2000. Freightliner expects North American heavy-duty truck sales to decrease by as much as 45 percent in 2001.

On March 30, 2001, Freightliner will discontinue second shift operations at the Portland Truck Plant and Portland Parts Plant. A total of 1,085 employees will be affected. The affected employees today received advanced notice of the

impending workforce reduction. With the reduction in force, employment at the Portland Truck and Parts Manufacturing Plants will move from 2,242 to 1,157 employees. The production rate will go from 74 to 35 trucks per day.

The Portland Truck Plant manufactures Freightliner-brand heavy-duty trucks. The Portland Parts Plant manufactures components for the truck plant and the company's parts distribution network. Freightliner is reducing production and

workforce at its Portland plants because they produce trucks and parts primarily for delivery to customers and dealers located west of the Rocky Mountains. Sales are currently slower in the Western U.S. and Canada.

All major North American heavy-duty truck manufacturers have announced large production cuts and layoffs over the past year. Freightliner has sustained the highest production levels in the industry because of its large market share. The company holds a 36.5 percent share of the North American heavy-duty truck market.

"We regret having to take this action," Hebe said. "We have made every effort to avoid further production cuts and layoffs, but high fuel prices and economic weakness continue to depress the demand for heavy-duty trucks in North America."

Freightliner currently employs a total of 3,994 people in Portland.

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