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Freightliner

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Freightliner LLC is a manufacturer of heavy duty trucks, chassis and semi-trailer trucks. The company is part of DaimlerChrysler. The company is known mainly for the heavy duty class 8 diesel trucks that it produces, as well as class 5-7 trucks. As of 2005 Freightliner is the largest manufacturer of heavy duty trucks in North America with annual earnings of over $17 billion (2005 est.) and over 22,000 employees (including Detroit Diesel). Due to the fact that Freightliner LLC is a wholly owned subsidiary of DaimlerChrysler, a non American corporation, it is not included in Fortune 500 rankings. Were it to be ranked however it would list as the 125th largest company in America based on the criterion used in said ranking.

History

In the 1930s, Consolidated Freightways decided to produce their own truck line out of reconstructed Fageols, after finding that most existing heavy trucks did not have sufficient power to climb the steep grades found in the mountain regions of the western United States. The trucks were branded "Freightliners", with the first units produced in Consolidated Freightways' maintenance facility in Salt Lake City ca. 1942. After production was interrupted during WWII, manufacturing began again, in CF's home of Portland, OR. The first truck sold outside of Consolidated Freightways went to fork lift manufacturer Hyster, also based in Portland. Today, that truck is in the Smithsonian collection in Washington, D.C.

Lacking distribution capability, and seeking higher volume to reduce production costs, CF entered into an agreement to sell their trucks through the White Motor Company, of Cleveland, OH, and their dealer network in the U.S. and Canada. This relationship would endure for the next quarter century, and the co-branded "White Freightliner" high cab-over-engine models became a familiar sight on the highways across the continent, far from its roots in the Pacific Northwest.

Manufacturing began in Burnaby, B.C., in 1961, to reduce the duty penalty on the complete vehicles sold in Canada. Assembly plants in Indianapolis and Chino, CA, complemented the main plant on Swan Island in Portland, serving the U.S. market. In 1969, an all-new assembly plant was opened on North Basin St., about a mile from the older building, which in turn was converted to exclusively produce parts for production.

White Motor Company became troubled in the 1970s, expansion into white goods and agricultural equipment consumed capital without producing a return, and the relationship with Consolidated Freightways became frayed. In 1974, the distribution agreement was terminated, and Freightliner Corp. began life as a freestanding manufacturer and distributor. Many of the first dealers were from the White Motor Co. network, but some entrepreneurs also signed up to represent the popular trucks without the White Motor Co. franchise as a complement.

At the same time, the company introduced its first conventional model, an adaptation of the high cab-over-engine mainstay product. HCOE's accounted for well over 50% of the U.S. market in those days, owing to restrictive overall length regulations that limited the bumper-to-taillight dimension of a semi-trailer unit to 55' on interstate highways. However, conventionals were popular on western roads owing to more convenient ingress/egress, better ride, and easier access to the engine when service was required.

In 1979, a new plant was constructed in Mount Holly, NC, and, nearby, a parts manufacturing plant in Gastonia, NC, both in the Charlotte metropolitan area. Volumes continued to build.

1979 marked another very consequential event in the evolution of Freightliner, and of the whole trucking and truck manufacturing industries. President Carter signed into law bills deregulating transport both on the ground and in the skies, which fundamentally altered the "rules of the game" for both. The echoes are still being felt today, with the financial crises being endured by the mainstream airlines. Deregulation changed the economics of trucking, and removed the protective shield of regulated carriage that protected carriers from competition and allowed the Teamsters Union to develop a stranglehold on the nation's economy by virtue of the Master Agreement with all significant freight transport companies.

Three years later, the Surface Highway Transportation Assistance Act of 1982 relaxed weight and length standards and imposed a new excise tax on heavy trucks and the tires that they use. No longer was the overall length of semi-trailer combinations restricted; rather, only the trailer was specified, to be not greater than 53' in length. Individual states retained more restrictive overall length laws, but fundamentally, the rules had changed forever.

Consolidated Freightways, a traditional, unionized carrier that flourished in the pre-deregulated era, realized it was in a fight for its life, a fight it would ultimately lose in 2002, when it closed its doors forever on the Labor Day weekend. White Motor Co. filed for bankruptcy in 1980, as the mistakes of the previous two decades combined with a serious economic downturn and turmoil in its core customer base to render it insolvent. CF examined making a bid for White, but two larger and dedicated vehicle producers from Europe, AB Volvo and Mercedes-Benz AG, had deeper pockets and CF quickly dropped out of the bidding.

Ultimately, AB Volvo acquired the U.S. assets of the defunct White Motor Co., while the Canadian unit was purchased by a consortium comprised of Alberta-based energy companies, and was renamed Western Star.

Discussions with M-B intensified, however, and in May of 1981, Consolidated Freightways sold its truck manufacturing business to Mercedes-Benz, allowing it to concentrate its management attention and financial resources on its traditional trucking business. Around this time, the Chino and Indianapolis plants were shuttered permanently.

Under Mercedes-Benz, the company continued to expand, although the anticipated synergies of using European components and designs in a fiercely independent and highly selective North American truck market proved elusive. An early attempt, using a Mercedes-Benz cab from Europe on a chassis designed for a North American-style conventional truck, proved to be a niche product, and never met sales expectations.

In 1989, the company acquired a standing plant in Cleveland, NC, near Statesville, that had been producing transit buses for German manufacturer MAN, apparently without profit. In 1991, the company displaced a poor-selling line of Mercedes-Benz medium duty vehicles with an all-new, range of medium duty trucks designed for North America that the company called the Business Class. Sharing some cab components with the Mercedes-Benz LKN mid-range European cabover, the truck was a conventional design which was the first all-new entry in the medium-duty market in over a decade. It proved quite successful.

Another pronounced downturn in the industry's fortunes necessitated drastic measures to restore the company to financial health, and Dr. Dieter Zetsche, now the Chairman of DaimlerChrysler's Board Of Management, was dispatched to lead the project as CEO. The Burnaby assembly plant was closed, a new facility in St. Thomas, Ontario, replaced it, and cost reduction programs in all corners of the company restored profitability when the market rebounded.

Significantly, production of Freightliners also commenced for the first time in Santiago Tianguiscento, Mexico, about 30 miles outside Mexico City, in a plant owned by Mercedes-Benz and producing at that time also buses, Brazilian-sourced medium-duty trucks, and compact Mercedes-Benz passenger cars.

The 90s were a go-go era for truck manufacturers in general, and for Freightliner in particular, under the leadership of flamboyant James L. Hebe, a former Kenworth sales executive who joined the company in 1989. Freightliner became the leading heavy truck nameplate in 1992, added new products at a rapid clip throughout the period, and made a number of acquisitions as well:

1995 - Oshkosh Custom Chassis in Gaffney, SC, becomes Freightliner Custom Chassis, producing the underpinnings for walk-in vans used by companies like UPS to deliver parcels and Cintas for uniform laundry services; diesel recreational vehicles; conventional school buses; and shuttle buses. It should be noted that the Oshkosh and Freightliner partnership has dissolved, and Oshkosh is not affiliated with Freightliner any longer.

1996 - American LaFrance, a 130 year-old manufacturer of fire apparatus that was Mr. Hebe's first employer. LaFrance had fallen on hard times and was moribund at the time of the acquisition.

1997 - the heavy duty truck ("AeroMax") products of the Ford Motor Co. were acquired, and renamed Sterling (from an early White Motors brand). Ford dedicated its monstrous Louisville, KY, facility to more profitable light truck production

1998 - Thomasbuilt Buses, of High Point, NC, producer of all classes of school bus bodies, and forward control chassis.

2000 - Western Star Trucks, Inc., the successor to the White Motor Co. of Canada, and its assembly plants in Kelowna, BC, and Ladson, SC.

2000 - Detroit Diesel Corp., Redford, MI, the former General Motors subsidiary had been revived by Roger Penske and was attractive to DaimlerChrysler as a point of entry into the North American heavy duty diesel industry. This company was actually acquired by another unit of DaimlerChrysler, but operations were gradually integrated into Freightliner.

Throughout this era, as well, a number of small fire and rescue apparatus manufacturers were acquired and rolled into the American LaFrance entity.

However, by 2001, the company was awash in used trucks it couldn't sell, and saddled with a number of non-performing operations at a time when the core business, still the Freightliner over-the-road truck offerings, was in recession. Former Freightliner CFO Rainer Schmueckle was dispatched by DaimlerChrysler to once again turn the company around. The Kelowna Western Star plant was closed, as was a Thomasbuilt facility in Woodstock, Ontario and parts manufacturing at the old Portland plant was discontinued. American LaFrance production was consolidated in the former Western Star plant in Ladson, SC, but the attempt to integrate complex, specialized emergency vehicles into a company noted for high volume production capabilities ultimately proved unworkable, and American LaFrance was sold late in 2005 to a private equity fund.

Today, Freightliner remains the leading brand in heavy-duty trucks, and in commercial vehicles in classes 5 through 8 in North America. It leads the school bus, diesel Class A recreational vehicle chassis, and walk-in van markets. Its Detroit Diesel and Mercedes-Benz engine offerings are also industry leaders. The Freightliner badge also adorns the Sprinter, a Class 2 van produced by Mercedes-Benz in Europe and marketed through Freightliner dealers, as well as through Chrysler Group dealers as a Dodge-branded offering.

In 2007, Freightliner laid off 800 US workers from their Portland, Oregon plant, relocating manufacturing work to their new multimillion-dollar plant in Mexico. Dawn Zimmer, a layed-off work from the Portland, Oregon plant told the press that Freightliner "came in and videotaped us at work so they could train the Mexican workers."<ref>Martin Crutsinger, 'Factory jobs: 3 million lost since 2000' By , AP Economics Writer, Apr 20, 2007</ref>

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