Freightliner counts down to mass layoff at Swan Island
By DON McINTOSH
Associate Editor
The last Freightliner truck ever to be
made in Portland will roll off a Swan
Island assembly line March 29, at
which point 802 local union workers
will lose family-wage jobs.
In all, 632 members of Machinists
Local 1005, 65 members of Painters
Local 1094, 94 members of Teamsters
Local 305 and 11 members of Service
Employees Local 49 will be laid off
March 30, with no expectation of re-
call.
German-based Daimler-Chrysler,
which owns Freightliner, will continue
to manufacture Western Star brand
trucks at the Portland plant, so about
900 union jobs will remain.
But as of April 1, Freightliner, a
brand begun by Portland trucking mag-
nate Leland James, will be made only
at plants in North Carolina and Mex-
ico. Nearly 1,200 workers are also be-
ing laid off at the Cleveland, North
Carolina, plant (a little under a third of
the work force there), but are being
told to expect recall when demand re-
turns for Freightliner trucks.
In recent years, demand has risen
and fallen in time with progressively
stricter emissions standards imposed
by the Environmental Protection
Agency (EPA) as part of its mandate to
enforce the Clean Air Act.
Before each new technology is in-
troduced, trucking companies, cautious
about increased cost or decreased relia-
bility, engage in a buying binge. They
“buy ahead” before the new model
year kicks in. Then the new truck
comes out, demand drops, and workers
are laid off.
In this case, the EPA standards for
2007 call for a 90 percent reduction in
particulate matter, the ultrafine soot
that can be seen coming out of exhaust
pipes, which is linked to cancer, bron-
chitis and increased heart disease.
In the past, truck-makers were able
to meet federal emissions standards for
diesel trucks by making changes within
the engine compartment, like altering
the shape of the cylinder, or improving
fuel-metering. But to get to the new
level, engine manufacturers have to
treat tailpipe emissions, burning the
particles and running exhaust through a
catalytic converter for the first time.
The device uses platinum and rhodium,
rare metals, and will render U.S.-made
diesel engines the cleanest in the
world, as clean as vehicles that run on
natural gas. Freightliner has boasted
that emissions from the new trucks will
be so reduced that a white handker-
chief placed over the exhaust pipes of a
running truck will come off clean.
The problem is the new trucks are
$5,000 to $10,000 more expensive, and
have a modest drop in fuel economy —
about 2 percent. The EPA allowed
truck-makers to manufacture the old
model year through the end of the first
quarter of 2007.
Freightliner plants are running at ca-
pacity until then. After that, demand
drops dramatically.
Joe Kear, a business agent at Ma-
chinists District Lodge 24, says the
company is using that slack time to ex-
ecute an unrelated business decision —
shifting production to Mexico, where
it’s cheaper, and North Carolina, where
it’s closer to suppliers and customers.
Last December, Freightliner an-
nounced the construction of a new
$300 million facility in Saltillo, Mex-
ico which will make up to 30,000
Freightliner and Sterling trucks a year
starting in early 2009. That’s when the
next buying spree is expected, because
EPA standards on nitrogen oxide emis-
sions ramp up the following year.
The Machinists Union saw that
coming, and last year was able to get
the government to certify Freightliner
layoffs as “trade-related.” That means
any workers the company lays off
through the end of 2008 will get much
more generous job retraining assis-
tance from the government. Those ben-
efits include employment counseling,
up to two years of unemployment ben-
efits, a two-thirds health insurance sub-
sidy through COBRA, tuition reim-
bursement for up to two years of trade
school or technical education, a wage
T HE M ARCO C ONSULTING G ROUP
Daimler-Chrysler
decision ends
60-year track record
of truck-making in
Portland
subsidy to give employers incentive to
hire them and provide on-the-job train-
ing, and job search and relocation ben-
efits to enable workers to move to take
jobs for which they’re qualified.
At a recent meeting explaining
these benefits, one worker asked if the
relocation benefits could be used to
move to Mexico. The answer: “No.”
Under NAFTA, only jobs can freely
cross borders, not workers.
As mass layoffs go, this one isn’t as
bad as it could have been. Over half the
workforce will remain to produce
Western Star brand trucks, so union
seniority rules apply to the layoff. That
means the laid-off workers are a rela-
tively young group — most in their 20s
and 30s. They’ll have many years of
work ahead and will be better able to
take advantage of retraining benefits
than workers in their 50s.
And other employers are lining up
to offer jobs to the laid-off workers. A
“Transition Team” made up of unions,
management, non-profits and govern-
ment agencies is meeting weekly to
sew together a safety net before the
layoffs occur. Thus far, they’ve lined up
80 employers to take part in a massive
jobs fair in late March. As of press time
they were looking to rent space in the
Rose Quarter for the event, which
would also be open to the family mem-
bers of laid off workers.
Kear said welders, painters and
workers doing body repair have obvi-
ous and sellable skills, while others
have hidden talents. Some assemblers
are actually diesel mechanics — skills
they weren’t using. Meanwhile, Team-
sters classified as material handlers
know how to do inventory control, op-
erate forklifts, and manage shipping
and receiving, so some of their work
experience may qualify them for jobs
elsewhere.
However, no amount of optimism
can eliminate the sting of losing a good
union job with excellent fringe bene-
fits. Wages in the Machinist contract
start at $12 an hour and top out at
$20.55 after four-and-a-half years. The
maximum unemployment insurance
benefit will be $445 a week.
Adding to the sting for some is the
fact that they agreed to a pay cut in
2001 in a deal to keep the plant open.
“People feel betrayed,” said Frank
Rouse, president of Local 1005 and a
chief steward at Freightliner. “They put
in all this time for the company, and
now they’re getting laid off.”
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MARCH 2, 2007