"A huge order" for military line-haul tractors is the main reason Daimler Trucks North America will keep open its assembly plant in Portland, Ore., said Martin Daum, the company's president, during a webcast.

He declined to comment on labor union claims that $130 million in unanticipated pension payouts was the reason, except to say that "I hate to spend money to close something when it can be better spent to help the company."

DTNA had faced shutdown costs of more than $900 million after the plant's planned closure next June, the company had announced last fall. But the U.S. Army's order for 1,780 Freightliner-based M-915A5 tractors caused DTNA on September 28 to announce a reversal.

"Encouraging sales" of Western Star civilian models is another factor that "will give the plant a second chance," Daum said. That suggests the plant could still eventually close because "it is not the most efficient place to make the military trucks."

DTNA wants a new three-year contract with four unions at the plant and hopes to gain concessions from them, according to local news reports. The Machinists Union, with about 425 members, is the largest; the Teamsters, Painters and Service Employees together represent another 174. About 1,000 others were laid off last year when Freightliner truck production went to the Carolinas.

The plant on Portland's Swan Island has been producing M-915-series military trucks and tractors, based on Freightliner's FLD-SD vocational model, since the late 1980s, and Western Star 4900s and 6900s since 2001. Military production was to go to the Carolinas and Western Stars would have been built in Mexico, but those plans are now on hold.