OPPENWEILER, Germany—Continental A.G. is considering the closure of its hose assembly plant in Oppenweiler, in central Germany. The plant, which develops and manufactures refrigerant lines for the passenger car and commercial vehicle sectors, employs 340.
The company is in talks with the works council to work out a compensation plan for the plant's staff.
The potential closure, disclosed in June, is not part of a restructuring plan unveiled recently by Continental, company spokeswoman Antje Lewe said in a written statement issued Sept. 26. The move, she said, is part of a $165 million "margin improvement program" detailed by ContiTech in its nine-month statement in 2018.
The program seeks to achieve the majority of enhancements through process improvements by 2020.
"We, unfortunately, can no longer see any prospects for a long-term future. For that reason, we intend to cease operations in Oppenweiler," said Christian Pfistner, the financial director at the site.
Sales figures in Oppenweiler have "fallen continually" over the past six years, according to ContiTech.
"We expect this trend to continue, so we foresee a further significant decline in our sales in the next few years," Pfistner said.
Despite moves to upgrade the plant, through partial automation and process improvements, the unit has been operating at a loss for many year, Pfinster said. "That is not going to change in the future, either. This step is, therefore, a necessary response."
In addition to low sales, the plant also has suffered from a recent reduction in a customer's order.
"The consequence of that is that the downturn in sales will be even more marked in the short term than originally forecast," explained Pfistner.
Operational since 1975, the manufacturing unit was established by Kuehner and taken over by Continental at the beginning of 2000.