A large military truck order will keep its Portland Truck Manufacturing Plant open past a previously announced shut-down in mid-2010, according to Daimler Trucks North America. Plans to shift production of DTNA’s Western Star Trucks to Santiago, Mexico, have also been put on hold.

However, long-term plans for the Portland facility depend on labor negotiations delivering cost reductions and work rule flexibility, according to a Roger Nielsen, DTNA’s COO. “Our decision to reverse the earlier announcement to close the Portland TMP was not easy, and nothing is certain at this point regarding a new contract,” he said in a statement released by the company. “The conditions under which we operate must change, but we have enough confidence to give it a try.”

The Portland plant’s reprieve is tied to a recent U.S. Army Tank Automotive Command order for the Freightliner-branded military vehicles it builds. Although DTNA is moving ahead with plans to reconfigure its Cleveland, NC, plant to build the military vehicles, “We’d prefer to keep our focus on ensuring timely delivery without interruption or the distraction of moving production at this time,” Nielsen said. The Cleveland plant will now be available for addition capacity if expected new military orders come through, the company said.

Retaining Western Star manufacturing in Portland is part of what the company called “a renewed focus” on that brand. While DTNA recently shifted its truck marketing and sales operations from Portland to Fort Mill, SC, its corporate offices and engineering operations have remained in Portland. “The proximity of the plant to the corporate engineering staff was a consideration [in postponing a Western Star move to Mexico],” Nielsen said.