Freightliner confirms potential layoff; 715 could lose jobs
CLEVELAND — Second-shift employees at the Cleveland Freightliner plant were somber Thursday afternoon as they prepared to head to jobs they might not have much longer.
Workers pumping gas and buying snacks at a nearby convenience store expressed dismay and surprise that Freightliner’s parent company might lay off 715 employees April 1 at the local truck manufacturing plant. The layoff would shut down the second shift.
“I was hoping this would last more than a year,” said one worker, who has been laid off from Freightliner three times and came back to work in February 2012.
Daimler Trucks North America, which notified the state on Thursday of the potential layoff, reinstated the second shift at the Cleveland plant one year ago. Daimler announced in January 2012 it planned to hire 1,100 people to meet increasing demand for its trucks in the U.S. and abroad.
But anticipated orders didn’t fully materialize, and the company hired only about half that number, recalling 550 employees who’d been laid off previously.
Now, those recalled workers, as well as others, are in danger of losing their jobs again.
“Dejected,” said one employee.
The April 1 layoff would be his fourth.
“I guess I will seek other employment,” he said. “Maybe I’ll go back to school.”
The layoffs are described as temporary, meaning the company could recall the workers if business improves.
Daimler also plans to lay off 405 workers at its plant in Mount Holly, according information on the N.C. Department of Commerce website. In compliance with federal law, the Portland, Ore.-based company informed employees in Cleveland and Mount Holly of the potential layoffs.
At a meeting Tuesday, workers at the Cleveland plant were told that if orders improve, the layoffs could be avoided, according to an employee who was there.
Several employees said they are suspicious the company is using the layoff to negotiate lower wages with the union. Daimler’s three-year contract with United Auto Workers Local 3520 is up for renewal in March.
“There is a very good possibility that this is more about the contract than truck orders,” one employee said.
They suspect the company will send workers home, then offer to bring them back at a lower wage. Top wage at Freightliner is currently $25 per hour.
Daimler denied the charge, saying Thursday the company is preparing for layoffs due to “the present softening of economic conditions that has adversely impacted the entire North American commercial vehicle industry.”
Employees said truck orders at the Cleveland plant are higher now than last year before the recall, but Daimler disagreed.
“The entire class 8 truck market is starting 2013 in a much weaker backlog position than it was facing at the start of 2012,” company spokesman Dave Giroux said.
Employees said Daimler plans to lay off second shift laborers but not supervisors, another signal the layoff is for leverage. Giroux did not say which types of employees would be laid off.
The layoffs would match production rates to incoming orders, the company said in a statement.
Daimler will decide whether to lay off workers “only after all other operational solutions are exhausted.”
In 2012, the North American commercial vehicle industry faced uncertainty, and most industry experts doubted a sales rebound in the second half of the year, Daimler said.
In spite of these challenges, the company said, the market grew 15 percent over 2011, and Daimler’s year-end market share of 34 percent continued to pace the industry.
“Cautiously optimistic” that market conditions will improve throughout 2013, Daimler said it will be ready to immediately recall workers who might be laid off in April.
The cautious optimism, despite slower economic and freight growth this year, is driven by the extreme age of the truck population in North America, Daimler said.
“Presently, the average age of a class 8 truck is beyond its normal operational lifecycle, which leads to increased maintenance costs,” the company said. “DTNA is well-positioned to capitalize on aging equipment replacement needs with the new Freightliner Cascadia Evolution that has been proven to be the industry’s new benchmark in fuel efficiency and performance.”
The Freightliner Cascadia Evolution is manufactured in Cleveland.
Contact reporter Emily Ford at 704-797-4264.