Detroit Diesel to end sales to non-Freightliner OEMs

PORTLAND, Ore. (July 3, 2003) — A major reorganization of DaimlerChrysler’s Commercial Vehicles Division will put Detroit Diesel under the Freightliner LLC umbrella and end sales of Detroit Diesel on-highway diesels to other truck makers.

As part of a global restructuring effective January 2004, DaimlerChrysler will dissolve its Powersystems Unit and move responsibility for major component production to regional vehicle units. In the U.S., that means Detroit Diesel — once a sister company to Freightliner — will report to Rainer Schmueckle, president and CEO of Freightliner LLC.

In the press release announcing the changes, DaimlerChrysler said a decision to discontinue selling its own truck components to other original equipment manufacturers was a result of its own strategic aims.

But in a press briefing afterward, Schmueckle said the decision regarding Detroit Diesel engines was triggered mainly by the fact that most of Freightliner’s competitors have dropped the Detroit Diesel option since DaimlerChrysler bought the engine maker in 1998. (Freightliner LLC produces three truck brands: Freightliner, Western Star and Sterling.) He added, however, that they have no plans to terminate existing relationships with non-Freightliner customers, and that Detroit Diesel will continue to market bus and off-highway engines to other OEMs.

Another big change for DaimlerChrysler’s commercial vehicles group will be the consolidation of truck and component development under one management team. Responsibility for the new P4 Organization will include product planning, product development, procurement and production strategy and planning. Schmueckle said Freightliner engineering will be part of P4, but will continue to work out of the company’s Portland, Ore., headquarters.

“Trucks for the North American marketplace will continue to be designed in Portland and not Stuttgart,” he said. “You’ve got to look at this new structure as a backbone to insure that we make the maximum use of common parts without wanting to design a world truck. There will be no world truck. There will be trucks that fit the market in Europe, Asia and North America.”

Schmueckle said he also wanted to make it clear that this was not a second restructuring of Freightliner. The company, he said, is currently operating in the black and is hitting all of its business and financial targets one year ahead of plan.


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