Freightliner to build $300M truck plant in northern Mexico

Freightliner LLC announced December 20 that it plans to build a $300 million truck manufacturing plant in Saltillo, Coahuila, in northern Mexico. Dedicated to the production of Freightliner and Sterling trucks, the new facility will provide additional capacity to accommodate Freightliner's long-range product planning, including an expected upturn in industry demand in 2009.

"This new facility underscores our confidence in the NAFTA truck market, and our bullish mid-term outlook for industry recovery post-2007," said Freightliner LLC president and CEO Chris Patterson. "Frankly, we were not able to produce what we could have sold in 2006 due to capacity constraints. We expect another surge in customer demand in 2009 prior to the next round of EPA emissions regulations, and the construction of this new plant will ensure that we are fully prepared."

The Saltillo plant is the second Freightliner LLC manufacturing facility to be located in Mexico, joining the Santiago Tianguistenco plant, which produces Freightliner-branded heavy- and medium-duty trucks for domestic Mexico sales, as well as export to Latin America, the United States and Canada. The new 1 million-square-foot facility in Saltillo is conveniently located near an existing Chrysler plant, which offers opportunities for synergy such as the extension of a supplier park and railroad terminal.

A professional supplier base and vastly improved logistics infrastructure have made Mexico a popular choice for many NAFTA-based truck manufacturing companies and suppliers.

"Five major U.S.-based OEMs now have Mexican manufacturing capability, including Freightliner LLC," said chief operating officer Roger Nielsen. "DaimlerChrysler has had excellent success in recent years with quality, cost and efficiency through our Mexican operations, and we fully expect the new plant in Saltillo to set benchmark standards for DaimlerChrysler Truck Group manufacturing facilities worldwide."

"Today, we begin a new chapter in DaimlerChrysler's Global Excellence strategy," said Andreas Renschler, member of the DaimlerChrysler board of management responsible for the Truck Group & Buses. "Freightliner LLC has been a pillar of performance and profitability for the Truck Group and DaimlerChrysler. We are pleased to support this expansion of Freightliner's manufacturing network which is an important step towards the optimal global production network for the Truck Group."

The 740-acre site will also include a PDI/transporter center and test track, as well as room for future expansion. The plant could produce up to 30,000 trucks annually. Groundbreaking is planned for the second quarter of 2007, with start of production planned for early 2009.

Company executives are working closely with federal and state officials in Mexico to bring this major project to fruition.

"We are honored and delighted to welcome Freightliner to Saltillo," said Governor Humberto Moreira. "This will be a tremendous economic boost to the state of Coahuila and will become a shaping force to consolidate the expansion of the automotive cluster in the State.”

The plant will generate approximately 1,600 jobs directly as well as an additional 1,100 jobs within the local Mexican supplier base.

"Under the administration of President Felipe Calderon, this project becomes an icon of Mexico's capability to attract leading companies in automotive manufacturing," said Dr. Eduardo Sojo, Secretary of Economy.

Freightliner LLC, headquartered in Portland, Oregon is the leading medium- and heavy-duty truck manufacturer in North America. Freightliner produces and markets Class 5-8 vehicles and is part of DaimlerChrysler's Truck Group, the world's largest commercial vehicle manufacturer.