WHITESTOWN — Daimler Buses is exiting the transit bus business in North America and will take no new orders for Orion buses at the local plant.
Daimler announced in a statement today that it is reconfiguring its operations in North America, which will mean a drastic shift in operations at the local plant at 165 Base Road.
The company is partnering with Motor Coach Industries to strengthen Setra’s coach business in North America. It will mean a minority stake in MCI for Daimler and an end to new production of buses at the Orion plant in Whitestown. Daimler will, however, "stand behind all current customer commitments and warranties," it noted.
"Expectations for the transit bus business, which suffers from low public sector investments by municipal government agencies, are low and likely to remain depressed over the next several years," Daimler stated. "As a consequence, Daimler has decided to exit the transit bus business in North America and to wind down production of Orion buses in the U.S. and Canada."
Starting today, Orion will take no additional new orders, according to the company. Following the fulfillment of current production commitments over the next 12 months, the operating facility in Mississauga, Ontario will be closed, and the facility in Whitestown will continue operations related to parts and field service only. The company would not comment on current orders. Daimler expects to continue a retrofit program for current customers at the Whitestown facility.
"Daimler clearly stands behind all current customer commitments and warranties, and will therefore continue to support all Orion customers’ warranty and service agreements through its extensive network of parts and field service representatives in the United States and Canada," the company stated.
"At the end of the day, Orion is facing a situation where the cost position is not competitive, the local market is in a continued slump, and growth opportunities are not available from selling the product overseas," said Hartmut Schick, head of Daimler Buses.
Daimler intends to provide a separation benefit to all eligible employees affected by the reconfiguration, including to those separating employees for whom such benefits are not otherwise required by law. That includes local employees.
The company employs about 480 people at the Whitestown plant. "It’s too early to speak about any number of jobs being lost during the 12-month period," said Daimler spokesperson Silke Walters when asked what the job count could be once the local facility is used only for service and retrofitting.
Orion has been on the receiving end of a number of government efforts to inject life into the company.
In 2007, the state announced it was giving the company $750,000 as part of an incentive package to keep the transit bus assembly operation from driving south to North Carolina. The company was to use the company to pay utility costs and employee medical claims, with the promise that it would add 59 more employees. Orion agreed in 2005 it would invest $3.4 million in its Whitestown facilities and maintain employment of at least 500 for the next 10 years in exchange for state and county Industrial Development Agency incentives. The IDA signed off on a Payment in Lieu of Taxes agreement under which the company is paying 75 percent of its property taxes through 2015. The status of that PILOT will be reviewed to see what impact today’s announcement will have on its terms, said OCIDA officials.
In 2010, the company received a $7.6 million order for 19 Orion buses from Syracuse-based regional public transportation provider Centro, which runs the Rome bus service. That money came from Recovery Bill funding for Centro. In addition to the business from Centro, Daimler Buses estimated it had built 250 buses for other transit authorities across the country as a direct result of Recovery Bill funding.
The company also received $80,000 for the Whitestown facility to repair, refurbish and install new components for customer buses as part of the county’s share of Regional Economic Development Council initiative funds as announced by Gov. Andrew M. Cuomo at the end of 2011.
The company has also had trouble with labor deals in recent years. In 2007, United Auto Workers Local 2243 members went on strike for about three weeks over the lack of a new contract. In 2010, the plant’s union employees, which make up over three-quarters of the work force there, nearly struck again, but signed a three-year deal a few weeks after the previous contract expired that fall.