"Truck-ocalypse" Hits Main Street As Daimler Fires 1,250 Amid Collapsing Demand

Tyler Durden's picture

If you were looking for signs that US trade may be collapsing on itself, a good place to start would be Class 8 truck orders which, as we first documented in early December, have posted sharp y/y declines of late.

In November for instance, orders collapsed 59% y/y. In December, the drop was 37%, and in January, Class 8 orders dove 48% from the year ago period.

This is all consistent with the trend towards broadly lower global growth and trade, something which at this point looks to be structural and endemic rather than transient and cyclical.

To be sure, the writing has been on the wall for quite a while. Have a look, for instance, at Morgan Stanley’s Dry Van TLFI:

As you can see, things haven’t been this bad since the crisis. And expectations aren’t looking so hot either:

Speaking of trucking and expectations, Daimler pretty clearly shares the rather dour outlook expressed by Morgan Stanley’s survey respondents because on Monday, the company laid off 1,250 people in North Carolina.

"We see a fall in demand of about 10 percent for heavy trucks in North America this year,” a spokeswoman said. “This is a response to lower demand," she added, flatly. 

"Workers at Daimler’s truck manufacturing plants in Mount Holly and Cleveland, North Carolina, said they were told Monday morning that the company is cutting hundreds of jobs at each plant at the end of the week," the local WSOCTV wrote yesterday, adding that "Daimler has taken over the plants that were run by Freightliner in Rowan and Gaston counties, and workers at the plant in Cleveland told Eyewitness News the announcement of job cuts came as a shock to many."

“I know that I'm one of the ones that's going to be laid off, so it's going to affect me,” said Andre Tucker, who has worked at the plant since May 2014. “Right now probably the biggest thing is to figure out the next step as far as trying to find a new job,” he laments. Tucker has a wife and two children.

Daimler also laid off 900 employees in Rowan County last month. "Everybody around here's been hurting, and it's going to hurt even more," a convenience store clerk told WSOCTV.

Yes, it most assuredly is "going to hurt even more," because as we've said time and again as it relates the collapsing Baltic Dry, central banks can't print trade. The US economy is bumping along at a barely positive 0.69% growth rate, and that's according to the BEA who, as we saw last summer, is prone to doing all sorts of things to make the data look better than it actually is.

Quick, someone tell the executives at Diamler that the industry forecasters who see a double-digit decline in Class 6-8 demand this year are merely "peddling fiction."

Full statement from Daimler

Pursuant to the notification requirements of the Worker Adjustment and Retraining Notification Act of 1988 ("WARN"), Daimler Trucks North America (DTNA) has announced that it will implement a reduction in force of approximately 700 employees at its Mt. Holly Truck Manufacturing Plant and approximately 550 employees at its Cleveland Truck Manufacturing Plant, effective April 16, 2016. Employees at the Mt. Holly and Cleveland plants were notified in Town Hall meetings yesterday and today.

The last day of work for employees affected by this announcement will be Friday, February 19, 2016 in both facilities. Impacted employees will receive payment in lieu of the notice period at each employee's regular rate of pay, and employees are free to seek and accept other employment during the notice period without jeopardizing their entitlement to the WARN period payment or benefits.

As of February 22, the workforce at the Mt. Holly Truck Manufacturing Plant will be reduced from approximately 2,150 to approximately 1,450 employees, with plant operations scaled back to two full shifts per day. The workforce at the Cleveland Truck Manufacturing Plant will be reduced from approximately 2,150 to approximately 1,600, with plant production scheduled at one full shift per day. The Cleveland reduction in force is in addition to a previous workforce adjustment announced in January affecting approximately 936 employees at the Cleveland Truck Manufacturing Plant, effective March 5, 2016.

These workforce adjustments are in response to a sustained reduction in orders and a diminished build rate, and are expected to be temporary, based on future market developments. 2015 was an extraordinarily strong market for trucks in NAFTA. DTNA anticipates the North American truck market Class 6 to 8 to be down around minus 10 percent in 2016. This is still expected to be above the 2014 Class 6 to 8 market.

The Mt. Holly Truck Manufacturing Plant is located in Mt. Holly, North Carolina and manufactures medium-duty Freightliner trucks. The Cleveland Truck Manufacturing Plant is located in Cleveland, North Carolina and manufactures heavy-duty Freightliner and Western Star trucks.

The company has no further comment pertaining to the announcement. 

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Soul Glow's picture

The layoffs are momentarilly bullish because when a corporation cuts workforce they cut input costs.  But this is long term bearish as obviously the cut in the workforce is due to a lack of productivity.

Lost of cuts lately.  Looking like 2008 all over again.

RafterManFMJ's picture

More bad economic news? DOW up by 400 tomorrow!

knukles's picture

So betcha betcha betcha that after a couple more mass firings like this, that the FED who right now say the business cycle doesn't exist, start blaming it in the ....
Are you ready?

                            BUSINESS CYCLE.....   Need some straw-man.... why not?

        Stranger shits happened like a gay Muslim illegal immigrant getting elected to a high office, and not upholding the Constitution

813kml's picture

It's obviously the weather, Daimler should have made more four-wheel drives.

Antifaschistische's picture

Daimler makes many 4x4s...including the worlds most popular UNIMOG.  However, thanks to the non-American non-free trade mandate (drafted by Detroit and approved by the fascist minions in Washington) they don't get to sell them in the US without a ton of red tape.

bamawatson's picture

old truckers never die; they just get a new PeterBilt

Iknowstuff's picture

Unimog. You have to love a vehicle with about 8 stickshifts and still only three pedals. Many years ago in a distant life I was a golf course mechanic. The fertilizer co. came out with their Unimog. Equipped with monster truck tires for turf and a broadcast spreader it was the coolest vehicle I have ever seen!!!

TeamDepends's picture

Daimler is clearly peddling fiction.

Durrmockracy's picture

Part of the vast right-wing conspiracy.

nuubee's picture

I love the smell of reset in the morning.

All Risk No Reward's picture

I don't love the smell of "reset" because I know what it means.

It means resetting the collateral of this inextinguishable debt monster from the ordinary citizen to the Debt-Money Monopolists, mostly via their various mega-corporate fronts that have cute commercials.

Lumberjack's picture

Long Western Star and Mack,

iggenFlot's picture

As long as I can go to McDonald's, play on my X Box and watch my 60-inch screen, ain't got a care in the world.

R.R.Raskolnikov's picture

4,9% unemployment-rate. There is room for some slack.

gunzeon's picture

Can't TPTB blow up more trucks in Syria ? then get new replacements from Daimler ? Helpful right ?


I woke up's picture

Waiting for the stock buyback announcement (assuming it hasn't happened already)

becky quick and her beautiful mouth's picture

maybe they can go apply at carrier.

scintillator9's picture

Everything is fine now, the BDI is over 300 again.


But, Harpex slipped slightly:


And playing around with the chart from the Association of American Railroads gives a much different picture with and without intermodal included.


And, I do believe that the negative sign still means a decrease or deficit, unless common core has permeated accounting too.


And, just for fun:

Gasoline Retail sales:


And what is also interesting, is the miles driven is about where is was in 2007:


So, know we know why "the market" is up.

moonmac's picture

The Sheeple know they’re about to get slaughtered. OT has all but ended in our factory. Hard to survive on $10-12/hr. New office hires skip lunch and work late to show how dedicated they are. They have mortgage payments to worry about, but that won’t matter when the chopping begins.

All Risk No Reward's picture

Did they send copays the way of the dinosaurs and implement a multi-thousand dollar deductible... yet?

A massive majority of the sheeple have been willfully floating down the River of Denial for some time. I know, because I interest with them and they treat the facts like the plague - to be avoided at all costs.

But, alas, my warning that the River of Denial ends in an Ocean of Consequence will not seem like empty words for too much longer.

Dr. Engali's picture

I'm sure there's a bartender position somewhere for them.

Jethro's picture

BLS says that's good for job growth!

Early Retirement's picture

If you work two jobs totalling half the pay, the BLS calls that job growth.

new game's picture

took a part time job today, feeling good, whats the problems? got life by the balls.

go merica, we be great again, i can feel it in my aching bones...

Buckaroo Banzai's picture

Bartender? It's been reclassified as a manufacturing job: "Bespoke Beverage Craftsman"

wildbad's picture

for every one of those 700 families the end just got nearer.  since we know that we should not ask for whom the bell tolls we won't  this shit is getting realer by the read.

Early Retirement's picture

While "Central Banks can't print trade," they can give management free money to move jobs to Mexico.

Spungo's picture

If the country had more gay people, those male truck drivers could make money as strippers. 

ajkreider's picture

See, this is yet another reason why the chicken littles have lost all credibility.  Look where sales are compared to the great recession.  They're not even close.  Sales are down from the fracking sand and water hauling glory days bubble that has thankfully burst. 

Sucks for the plant workers, I get it.  But this is the froth coming off.  

Kirk2NCC1701's picture

How's the Freighliner mothership in Portland OR doing?

They were the ones who bought out Western Star (in Kelowna BC) and then promptly shut it down.  That owner (an Aussie) did well; he now owns a ski resort in Big White BC, while the Western Star employees are long gone.

Iknowstuff's picture

Carrier corp. in indiana just let 1500 go and is moving the plant to Monterey Mexico. United technologies which is the parent co. had a 13.79 billion in profit in 2015. But just to save a few bucks.

ToSoft4Truth's picture

Boycott Carrier....  Attack the stock of United Tech? 

stormsailor's picture

new employee tried to sign up for obama care last year but never would allow it.   making 14k a year she had a 600 dollar fine.

ToSoft4Truth's picture

Paul Ryan is gonna fix it.  Boehner just didn't have enough time.... 

new game's picture

boehner is the poster child of what is wrong with america. fell flat on his back like a junkie whore going through withdrawl doin the deal, making a cheap lawn chair look sturdy...

stormsailor's picture

also i have many clients that work at daimler,  they were already talking about it

autofixer's picture

Now go and get two or three part-time jobs!  Do your part to keep the Obamao/Old Yellen charade up!  

gwar5's picture

I sold a nice 7 acre storage building facility in little downtown Mount Holly, NC last year for mid-7 figures. We were ahead of the curve this time around, unlike 2008.

This time we got out of dodge before the SHTF. Chain corporation bought us out, had a cash contract within 5 days of deciding to sell. Very, very lucky. 2008 caught us by surprise and it was scary with people trying to live in the storage units. We were prepared this time around because I started reading ZH shortly thereafter and could see what was going to unfold. Serious.

I know that plant (and Cleveland, NC) and it's workers and it's the lifeblood of that dinky little town. I knew it was them when I read todays ZH headline. Irony: Obama's motorcade went right past our property not too long ago on it's way to that Mt Holly plant just a mile up the road from us to brag about the 'wonderful' economy. Now they're all fucked, as is Everyothertown, USA. This lay off feels like it's going to be permanent.

Thanks be to ZH and the Tylers for not being 'insouciant'. Anybody says ZH information is not actionable is just wrong.



GotGalt's picture

gwar - congrats for getting out while the getting was still good!  When the next shit storm finishes up in the next 12 months you can take the money and buy the storage building back 3x over at the bottom.