Daimler says its Sterling truck sales have not met expectations

At total of 3,500 factory and office workers at Daimler, one of the world's biggest makers of heavy trucks, are to lose their jobs.

Daimler has said it will close two factories in Canada and the US, and drop its Sterling brand of trucks.

Daimler's truck sales in North America fell 18% in the first eight months of 2008 as economic growth slowed.

As well as 2,300 workers at the two factories, 1,200 white-collar staff across the US and Canada will also go.

"We adjust supply to demand," Dieter Zetsche, chairman of Daimler's management board, told BBC News in a recent interview, commenting on how the company was responding to the economic downturn in the US.

"When it goes up, you have to increase your production. When it goes down you have to reduce your production."

Production switch

The job losses include 720 workers whose redundancies were announced earlier, in July.

Daimler said by closing the factory in Ontario by next March, and the plant in Portland in 2010, it hoped to boost its earnings by $900m (£513m).

"We are confident this forward-looking strategy is the right measure to address the challenges in the North American market," said Andreas Renschler, head of Daimler's trucks division.

The firm said it would switch some of its truck production to Mexico and other areas of the US.

The company said it now hoped its truck customers would switch to its larger Freightliner brand.

Source BBC News