It was the kind of employer that every metropolitan government in the country covets: a respected, long-time manufacturer that employed hundreds of local workers and paid them a living wage, with benefits.
But Freightliner’s headquarters are in Germany and its primary markets are on the American East Coast and, as a consequence, Portland’s wishes didn’t amount to a compelling reason for the company to keep building trucks on Swan Island. That’s why Daimler said this week it would shut down its Freightliner truck plant in 2010, when its labor contracts expire. At least 900 Oregon-based employees will lose their jobs.
Oregon officials expressed their disappointment, but said there was little they could have done to change the conditions that led Daimler to shift all its truck-making operations to the Carolinas and to Mexico. And while anybody who’s been paying attention to Freightliner for the last five years knew this day was likely to come, its inevitability doesn’t relieve the sting of losing so many jobs at once.
Some blame American trade policy for the closure, but that’s the wrong culprit. Laws that limit cross-border trade are more likely to harm the economy — especially a trade-dependent economy like Oregon’s — than to protect manufacturing jobs. Daimler’s Freightliner subsidiary was one of its few money-losing units last year and the company said in its last annual report that demand for commercial trucks in North American suffered “a massive decline,” partly because of cyclical conditions and partly because of environmental regulations that went into effect last year. Rising fuel prices hurt demand further this year. (But the company said demand for its commercial trucks continues to increase in western Europe and China.)
Daimler says it will save $900 million a year by killing its Canadian-made Sterling Trucks brand and closing its manufacturing plants in Portland and Ontario, Canada. That figure swamps all other considerations. The hard lesson is that its essential for manufacturers to be economically competitive with their rivals, whether across the street or across the ocean.
Oregon loses 900 jobs. The Carolinas and Mexico gain. Not the fault of NAFTA. The south is more business friendly with right to work laws.
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Thomas Sinclair