ST. THOMAS, Ont. — The hurting North American vehicle production sector and depressed truck-hauling industry has caused Sterling Truck to lay off 720 workers at its St. Thomas, Ont. truck assembly plant.

So far, about 1,300 of the 2,000 workers at the facility have been given their walking papers. The most recent cuts will take affect in November.

The plant currently makes about 75 trucks a day, consisting of the Sterling HX heavy-duty truck and the Acterra medium-duty vehicle. The company is expecting that number to drop to about half — 38 trucks a day — by the fall, reducing the plant to a one-shift operation.

The latest round of layoffs means about $40 million in payroll savings alone for DaimlerChrysler, the parent company of Sterling and Freightliner Trucks. The workers make more than $30 an hour.

The scale back in production is expected to trigger a Domino effect in the supply-based region.

"Do the math. This is a huge hit for manufacturing and for the entire region, a huge loss," David Kerr, director of the St. Thomas and District Labour Council told the London Free Press.

In 2006, the Canadian Auto Workers union staged a two-week strike over pay and job security. Union officials feared the truckmaker was getting ready to shift production to Mexico after the pre-buy sales boom at the time fizzled out.

Sterling gave workers a three-year contract that included wage increases of eight percent over three years and improvements to pensions.