TORONTO, Ont. — The Sterling brand has been killed by parent company Daimler. As of March, the company will be shutting down its Sterling Truck factory in St. Thomas, Ont. a move which will affect a total of 2,300 workers, according to a Canadian Press report.

This total includes 720 workers in St. Thomas already scheduled to be laid off next month with the elimination of one of the plant’s last two shifts, said the report. The plant had already been affected by heavy cuts, including when Daimler laid off 600 people at the St. Thomas facility last year when the first of three shifts was cut. The factory produces a range of medium- and heavy-duty trucks.

Daimler blamed the decision on “continuing depressed demand across the industry and structural changes in the company’s core markets.”

Daimler Trucks North America will also reduce its salaried staff by about 1,200 positions, with more than half directly related to the Sterling brand.

The closure of the factory is said to coincide with the expiry of the plant’s contract with the Canadian Auto Workers union.

Sterling’s truck plant in Portland, Ore. is slated to be closed June 2010, when current labour contracts expire. Western Star commercial production will be assigned to the company’s Santiago, Mexico plant, while production of Freightliner-branded military vehicles will take place at one of the company’s manufacturing facilities in the Carolinas by mid-year 2010. Production will start in February at the plant in Mexico, making Freightliner’s new flagship Cascadia model.

The end of production at the 39-year-old Portland manufacturing plant will not affect the location or operation of the company’s headquarters in the same city, the company said. The company recently completed the relocation of sales, marketing and customer support functions to Fort Mill, S.C., leaving 2,200 employees engaged in administration, product development, procurement and information technology in the headquarters building on Portland’s Swan Island and neighboring satellite offices.

The company estimates the changes will cost US$600 million but improve annual earnings by $900 million by 2011. With the elimination of the Sterling badge some of its products will be added to Daimler’s Freightliner and Western Star truck lines, the company said.

Centring in on two brands will “drive an even more attractive program of innovation in safety, environmental impact, and user productivity,” the company was quoted as saying in the CP story.

Sterling models have substantial overlap with offerings in the Freightliner Trucks product line. Launched in 1998, Sterling has only achieved one-fourth of the Freightliner nameplate’s market penetration despite ongoing improvement initiatives and product launches, the company said in a release.

“We are very mindful of the effects these decisions will have on the lives of many of our employees and on our Sterling dealers’ businesses,” said Chris Patterson, president and CEO of Daimler Trucks North America. “We are committed to taking measures to ease the transition for all those affected and to emphasize the support offered to those owning and operating Sterling Trucks in the wake of this announcement.”

–With files from the Canadian Press