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Freightliner celebrates DaimlerChrysler marriage

PORTLAND, Ore. - With lights sparkling off the chrome of four show vehicles, Freightliner officials took centre stage and offered a shining projection for future success.

PORTLAND, Ore. – With lights sparkling off the chrome of four show vehicles, Freightliner officials took centre stage and offered a shining projection for future success.

Celebrating the 25th anniversary of Freightliner’s affiliation with DaimlerChrysler, Dr. Dieter Zetsche paid homage to the company’s history and offered the crowded mock-up center at the Portland home base a hint of what to expect in the future.

“Building a stronger and more competitive DaimlerChrysler to support the Truck Group is at the top of my agenda,” said Zetsche. “To help do that, we’re in the process of rolling out a New Management Model throughout the company. The objective behind this initiative is to further integrate our global organization, to focus our operating units on their core processes and to enhance cooperation within the company.”

“Ultimately, we will be a more efficient company,” he continued. “That means we’ll be better able to quickly respond to market needs without a large, multi-layered bureaucracy to work around.”

Zetsche has been a member of the board of management of DaimlerChrysler AG since December 1998 and chairman of the board of management since January 2006. It was in the early 1990s when Zetsche cut his teeth in the truck market as the president of Freightliner.

“It was here, working with some of the very best people in the truck business that I also learned about turning a company around,” explained Zetsche. “Back in 1991, Freightliner was bleeding red ink. We turned a $33.9 million loss in ’91 to a $60.5 million gain in ’92.”

The history of Freightliner was not always painted in red.

The company traces its roots back to a single trucking company executive who was unsatisfied with products from established truck makers and hired a group of engineers to build a truck focused on being lighter and more durable to haul more payload. In 1940, Leland James helped establish Freightways Manufacturing in Salt Lake City to produce units with a space saving lightweight aluminum cab-over-engine design.

“One thing’s for sure, Freightliner has come a long way since Leland James, president of Consolidated Freightways, decided he could – and would – build a better truck back in the late 1930s,” said Chris Patterson, president and CEO of Freightliner.

Freightways became Freightliner Corp. in 1942 and in 1947 the company moved to a manufacturing facility in Portland. In 1950 the manufacturer sold its first truck to a private carrier and experienced mild growth during the next few decades.

Freightliner was acquired by the former Daimler-Benz AG organization in 1981. With a market share of 9% for Class 8 trucks, Freightliner was a medium-sized manufacturer at that time. By 1986 Freightliner emerged as the second largest company for heavy-duty trucks with a market share of 15.5%.

“We were also on an acquisition roll at that time, broadening our product portfolio with complementary offerings: Freightliner Custom Chassis and American LaFrance and related affiliates in 1995; and Sterling Trucks and Thomas Built Buses in 1998,” explained Patterson. “The advent of the new century saw the addition of Western Star to the Freightliner family in 2000, while DaimlerChrysler acquired Detroit Diesel Corporation that same year.”

At the end of 2005, Class 8 market share stood at 36.1%; while in the market for medium-duty vehicles Freightliner commanded a 30.3% share over the same period.

“The future will see a marked reduction in our willingness to share our scale with our competitors,” Patterson told the attendees. “Freightliner LLC has the advantage of affiliation with the world’s largest truck and component manufacturer on our side, and will fully exploit that advantage in the years ahead.”

Freightliner’s corporate name changed from Freightliner Corp. to Freightliner LLC in 2000. Freightliner is now a key pillar of the DaimlerChrysler Truck Group which includes the brands Sterling, Western Star, Mitsubishi Fuso and Mercedes-Benz. With an impact in markets across the globe, the Freightliner and DaimlerChrysler silver anniversary celebration attracted a contingent of truck writers from around the world. Germany, Denmark, Switzerland, Sweden, Ireland and the United Kingdom were some of the countries represented during the event in Portland.

“Today, the DaimlerChrysler Truck Group is the biggest commercial truck manufacturer in the world,” stated Andreas Renschler, member of the DaimlerChrysler board of management, responsible for Truck Group and Buses. “That’s an impressive accomplishment. But we also have the potential, the talent and the ambition to be the best in every respect.”

To achieve this goal, DaimlerChrysler is counting on its Global Excellence program and its initiatives to promote stronger networking within the Truck Group.

“Our goal is to improve profitability significantly, independent of market cycles,” Renschler explained. “It’s all about building our global competitiveness in our short-, medium- and long-term future.”

One of the initiatives will reinforce DaimlerChrysler Truck leadership in technology; with innovative safety systems including ESP, the Lane Assistant system and Active Brake Assist. In a different initiative, the Truck Group plans on increasing market development where its brands already have a strong presence. On the product side, the group will implement a world-wide modular strategy, which aims to provide superior products that will strengthen each of the brands.

“Our objective is to achieve a high degree of common components and modules across our five truck brands – Freightliner, Western Star, Sterling, Mercedes-Benz and Fuso – without compromising the unique needs and requirements of our customers, wherever they are,” stated Renschler.

Another initiative of the Global Excellence program involves optimizing the business model and brand portfolio, such as grouping worldwide engine activities. The European “BlueTec” concept for exhaust purification uses an SCR (selective catalytic reduction) system with an AdBlue carbamide solution.

“We’ve already sold more than 20,000 BlueTec trucks in Europe, improving fuel consumption and emissions,” explained Renschler. “And we hope to offer BlueTec here in the US in 2010 to meet the next round of diesel emission standards in the most optimal way for our customers.”

In 2007, Freightliner and Detroit Diesel will introduce the Heavy-Duty Engine Platform (HDEP). This common design platform will help meet European, Asian and NAFTA emissions standards; and the need for higher power ratings.

“The Heavy-Duty Platform is an important step toward our long-term goal of having three DaimlerChrysler engine families worldwide (light, medium, heavy), instead of the current eight engine platforms for all brands,” noted Renschler.

“Freightliner has come a long way in the 25 years since it joined what’s since become DaimlerChrysler,” he added. “Now, backed by our global resources, with a sharper organization focus on creating superior products – and with the great Freightliner spirit – I can say with confidence that the next 25 years will be better still.”

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