Freightliner’s Cleveland plant in running for military contract
Published 12:00 am Tuesday, December 1, 2009
By Mark Wineka
and Jessie Burchette
mwineka@salisburypost.com
Cleveland’s Freightliner plant is in the running for $16 million in new investment as part of a government contract to make military trucks.
Rowan County officials have stressed that the Cleveland plant is in a competitive situation with other Freightliner locations, but the Portland, Ore.-based company is seeking an incentive grant for the possible new investment.
The Rowan County Board of Commissioners has scheduled a special meeting for 6 p.m. on July 20 to consider an incentive under the Rowan County Investment Grant program.
The Salisbury-Rowan Economic Development Commission has labeled the Freightliner proposal as “Project FMT.”
“It started moving real, real fast the end of last week,” said Robert Van Geons, executive director of the EDC.
Van Geons said Freightliner’s proposed new investment in Cleveland would help keep jobs in Rowan County, perhaps increase employment down the road and secure Freightliner’s continued presence here.
It’s his understanding that Cleveland would be the only North American location making this particular kind of military vehicle, Van Geons added.
A company spokesperson in Washington, D.C., was not available Tuesday.
Freightliner’s Cleveland plant currently specializes in making the Cascadia truck, whose production has been shifting to the company’s new plant in Saltillo, Mexico.
After a series of layoffs in Cleveland over the past year, including the shutdown of second and third shifts, Freightliner employment here has fallen to 695 employees.
For many years, the truck manufacturing plant was the county’s largest employer with more than 3,000 workers.
Of the $16 million in new investment, more than $9.5 million would be assessed as real and business personal property.
The incentive ó a 75 percent property tax break over five years ó would apply only to the increased assessed value, and the company would be penalized should the total on-site employment drop below current levels, Van Geons said.
Van Geons is in the process of gathering information, as required under the investment grant program, for an economic impact study, which will be given to commissioners July 20.
The possibility that Freightliner will build military trucks in Rowan County is a shot of good news, said Carl Ford, chairman of the Rowan County Board of Commissioners.
He cited a potential for more than 400 additional jobs.
“That’s bigger than anything we’ve announced,” Ford said.
“We’re looking to hang on to some jobs and get more,” he said. “They will be good, solid jobs … military vehicles which have to be made in the United States.”
Observing that it is a competitive situation, where the company is looking at other potential sites, Ford said he expects county commissioners will approve the incentives.
The most recent layoffs at Freightliner occurred May 8 when 420 employees’ jobs were cut, affecting some of the first-shift workforce and the pre-delivery inspection facility.
Rowan County’s unemployment in May reached 13.6 percent after these latest layoffs.
Daimler Trucks North America, parent of Freightliner, said at the time “deteriorating economic and market conditions and further significant decline in new truck orders are leading to the newly announced reductions.”
In March, 1,290 Cleveland plant workers were laid off as the facility eliminated its second shift. Altogether, Freightliner eliminated 2,137 jobs in March at its Cleveland, Mount Holly and Gastonia plants.
In June 2008, the company laid off 1,500 workers in Cleveland before calling back about 650 employees in August and reinstating a partial second shift.
In April 2007, Freightliner eliminated the Cleveland plant’s third shift by laying off 1,180 workers.
The $300 million plant in Saltillo, Mexico, opened in March with 1,414 employees.
In its history, Freightliner has manufactured military trucks, mainly in Portland under the Western Star brand.