Continental to close two tyre plants

Quite often when we think of the economic downturn's impact on the car industry we neglect to consider the bigger picture.
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Now German tyre giant Continental says it is suffering as car manufacturers reduce production and may have to cut nearly 2,000 jobs and close production at two of its high-cost European tyre manufacturing sites as the auto industry's financial situation worsens.

"We have studied various options and concluded that the competitiveness of the tire divisions can be maintained only by closing the two plants with the highest costs -- and these are the passenger tire plant in Clairoix and the commercial vehicle tyre plant in Hanover," said Continental CEO, Hans-Joachim Nikolin. "It has not been easy for us to present these plans to those concerned. Regrettably, there is no alternative."

Production capacity of 8 million car tyres annually in its French site would be reduced in two steps with its complete closure no earlier than the end of March next year, affecting some 1,120 employees.

Production in its home plant of Hanover, where some 1.4 million commercial vehicle tyres are made every year, would end as of December 31 this year, while output at its Slovak plant in Puchov would be reduced by 20 percent.

Continental said it had finally exhausted short-term instruments such as the reduction of surpluses on working time accounts, longer plant vacations, the capping of contracts for temporary workers and shorter working hours for core staff.

"Unfortunately, in the face of a stubborn slump in demand of this great magnitude,” Nikolin said, “the short-term measures at our disposal are no longer sufficient."