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. 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.
Orion plans to take no additional new orders. Following the fulfillment of current production commitments over the next twelve months, the operating facility in Mississauga, Ontario will be closed, and the facility in Oriskany, New York will continue operations related to parts and field service only. In addition, Daimler expects to continue a retrofit program for current customers at the Oriskany 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.
"Daimler Buses considered all possible options for reconfiguring our transit bus operations in North America, but 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 Schick.
"Discontinuing production of Orion buses was a very difficult decision for us to make, but to secure our leadership position we must always strive to invest resources efficiently in support of our global strategy for growth. As part of our lasting commitment to all existing Orion customers, we will make sure a robust parts and service infrastructure continues to provide a high level of service and support."
Daimler intends to provide a separation benefit to all eligible employees affected by the reconfiguration of its Setra and Orion bus and coach businesses in North America, including to those separating employees for whom such benefits are not otherwise required by law.
'Globe 2013': A worldwide initiative for growth and efficiency
Daimler Buses last month announced GLOBE 2013, an initiative for Global Bus Excellence that aims to shape the future of mobility, while securing sustainable competitiveness through worldwide advances in growth and efficiency. In 2011, Daimler Buses sold 39,740 buses and coaches worldwide. Whereas the bus business was booming in some parts of the world, particularly in Latin America, the industry in Western Europe remained in a slump because of the financial and debt crisis. Market demand was similarly negative in North America, which, like its Western European counterparts, suffered from public sector budget constraints and therefore from substantially fewer calls for bids.
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