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March 11, 2009 02:00 AM

Conti to cut capacity in France, Germany

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    HANOVER, Germany (March 11, 2009)—Continental A.G. plans to close a passenger tire plant in Clairoix, France, by early next year and phase out truck tire production in Hanover by year-end in an attempt to balance production capacity with shrinking demand.

    The moves will affect 1,120 employees in Clairoix and 780 in Hanover, Conti said, and remove 8 million units of passenger and 1.4 million units of truck tire capacity annually. Production at Clairoix should end by March 31, 2010, Conti said.

    In addition, Conti is planning to cut truck tire output at its Puchov, Slovak Republic, plant by 20 percent this year.

    Hans-Joachim Nikolin, executive board member in charge of the tire divisions, said the company will continue talks with employee representatives at the plants in question and discuss the next steps.

    Conti did not say what costs it expects to incur related to the closings nor what annual savings it might accrue from the reduced employment.

    Conti cited a steep drop in OE tire sales and a marked deterioration in replacement markets for its decision and said it does not expect the markets to recover sufficiently in the short- and medium-range future for it to make optimum use of existing capacities.

    It said expects to have roughly 15 million passenger car and approximately 1.7 million commercial vehicle tires overcapacity this year.

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