DaimlerChrysler Buys Western Star Trucks, Orion Bus

DaimlerChrysler AG and Western Star Trucks Holdings announced it intends to acquire 100% of the outstanding stock of Western Star Trucks Holdings, a Canadian-based manufacturer of trucks, and Orion Bus Industries. In an agreement reached with Western Star, DC subsidiary Freightliner will purchase Western Star for C$670 million (US$450 million). Daimler said the move further strengthens its position in commercial vehicles (trucks and buses) by broadening product lines and its dealer organization for trucks. “The proposed acquisition makes DaimlerChrysler’s line of bus product offerings, including Thomas Built Buses and Setra, the broadest and most complete in North America,” added Dr. Dieter Zetsche, head of DaimlerChrysler Commercial Vehicles Division. Through the purchase, Freightliner will oversee Orion Bus Industries. Although company statements praised the addition of Orion’s presence in the 40-foot bus business to Freightliner as completing its bus product line, observers speculated that it might sell part of the operation. For example, the Mississauga, Ontario facility once ensured that Orion would receive a steady stream of orders from provincial transit operators. However, new policies in Ontario have changed this calculus. One area of the transit bus business that Orion continues to enjoy a cutting edge is in hybrid propulsion buses, in which the company’s Orion VI dominates this growing market segment. Since most of these and other U.S. 40-foot bus orders are assembled in Oriskany, NY this facility’s closure is less likely in the immediate future, the same observers say. The move also coincides with Daimler’s acquisition of Detroit Diesel Corp., which helps bolster the company’s moves in trucks and buses. DDC is North America’s market leader in the heavy-duty transit bus engine business. Meanwhile, DaimlerChrysler announced it has sold its Rail Systems business called Adtranz to Bombardier.