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Orion To End Production
Posted by NJT Oradell on Wed Apr 25 12:45:19 2012
By Christoph Rauwald
Of DOW JONES NEWSWIRES
FRANKFURT (Dow Jones)--Daimler AG (DAI.XE) plans to end production of Orion buses and combine the sales network of its Setra brand in North America with U.S. peer Motor Coach Industries Ltd. in a bid to save costs and improve efficiency, according to people familiar with the matter.
The German automaker plans to take a minority stake of around 10% in Motor Coach Industries as part of the deal, these people said. MCI is controlled by KPS Capital Partners LP., which bought the business in 2010.
Daimler and MCI signed a letter of intent and aim to reach a final agreement by the end of May, the people said. Setra buses would continue to be produced in Germany and exported to North America.
The deal with MCI, if finalized as planned, would be part of a comprehensive program to boost efficiency within Daimler's global bus operations and meet the Stuttgart-based firm's profitability targets.
Daimler plans to cease production of Orion city buses, according to the people. The brand's plant in Mississauga, Ontario, is due to be closed and the plant in Oriskany, New York, would focus on parts production and services for existing customers only.
The Mississauga and Oriskany plants combined employ around 850 staff.
Charges stemming from these restucturing measures could possibly be booked in the first quarter. Daimler is scheduled to release first-quarter earnings April 27.
- By Christoph Rauwald, Dow Jones Newswires; +49 69 29 725 512; firstname.lastname@example.org