Daimler Bus to Partner with U.S. Coach Maker

Daimler AG's bus unit has signed a letter of intent to form a strategic partnership in North America with Motor Coach Industries International Inc. for distribution of Daimler's Setra brand buses.

The companies aim to finalize the agreement by the end of May. Daimler would take an unspecified minority stake in MCI, which would become the exclusive North American distributor of the German-made Setra S407 and S417 premium buses.The Wall Street Journal cites unidentified sources who say Daimler will buy 10% of MCI.

Schaumburg, Ill.-based MCI makes intercity buses for tours, charters and transit companies.

Daimler says it will exit the North American transit bus business by closing its Orion bus unit. The company cites the unit's uncompetitive costs and a market slump caused by declining municipal bus orders. Daimler will close Orion's Mississauga, Ont., factory and headquarters. The unit's Oriskany, N.Y., factory will continue to retrofit and service buses.