October 2, 2009 Volume 110 Number 19

Freightliner won’t close Portland plant

Workers at the Portland Freightliner plant got a reprieve Sept. 28 when Daimler Trucks North America announced their facility won’t close June 2010 as previously announced.

The heavily-downsized plant employs 425 members of Machinists Lodge 1005; 90 members of Teamsters Local 305; 66 members of Painters Local 1094; and 18 members of Service Employees Local 49.

The plant makes Freightliner military vehicles and the Western Star line of specialized trucks. Daimler just got a large order from the U.S. Army’s Tank Automotive Command, and that may have figured in the decision to halt the planned closure. Roger Nielsen, Daimler Trucks North America chief operating officer, said in a press statement that the company would prefer to focus on timely delivery, without the interruption or distraction of a move.

The company was planning to switch the military production to its North Carolina plant, and Western Star production to its plant in Santiago Tianguistenco, Mexico. Instead, the military trucks will be made in Portland and in Cleveland, North Carolina, while plans to manufacture Western Star trucks in Mexico are on hold.

Machinists Representative Joe Kear said another factor in the decision may have been the discovery — during bargaining over severance benefits — that the company will have to pay larger-than-expected “legacy” costs whether the Portland plant closes or stays open. About 100 members have taken an early retirement benefit rather than wait for the plant closure.

The previously planned closure was to coincide with the June 2010 end of the Machinists Union contract, since the contract contained a commitment not to close the plant. Rescinding the closure means the company will have to negotiate new agreements with the four unions, which bargain together but ratify contracts separately.

Kear learned of the decision to stay open Sept. 28 when company managers called him to a 7:30 a.m. meeting. The company wants early negotiations, Kear said, and a three-year agreement. There was no indication the company will expand production or recall any of the 1,000 or so workers laid off since 2007, except that Daimler has said it wants to put more energy into developing the Western Star brand.

In its press statement, the company seemed to signal it will seek concessions in bargaining. The company titled its statement, “Daimler … announces ‘second chance’ for Portland truck plant.”

The choice of language — “second chance” — suggests that closure is still a threat, or maybe that Portland or the Daimler workforce have displeased the corporate hierarchs, but will have another chance to win back favor, presumably by giving wage concessions and giving up job protections.

“The cost disadvantages of operating a truck manufacturing plant in Portland have not changed,” Daimler said in the statement, and “negotiation of a new labor contract to continue plant operations must focus on increased flexibility in work rules and cost reductions that lead to further gains in competitiveness.”

“We are hopeful that our discussions with the unions in the weeks ahead will prove to be productive,” Nielsen said in the written statement.

“We will do our best to look out for the interests of our members,” Kear told the Labor Press. “I think members will want to see severance language in the new contract.”

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