Continental rejects allegations over plant closures

ERJ staff report (RD)

Hanover, Germany - Continental AG has defended itself against what it calls “unjustified” criticism over its decision to stop adjust production at its European manufacturing plants. The company recently announced it is halting production at the its tyre production plants in Hanover, Germany, and Claroix, France, as well as reducing production at its Puchov, Slovakia, plant.

The works council of the Hanover-Stöcken plant has alleged that there has been a breach of law by Continental.

“We are fully understanding of the fact that the decision, which was indeed very difficult for us to make, gives rise to reactions and concern,” said Executive Board member for human resources Heinz-Gerhard Wente. “However, we are not understanding of the fact that unfounded assertions are made against better knowledge,” added Wente.

The company said its Stöcken production plan for 2009 already had to be reduced at the end of 2008 from 1.28 million tyres to 930 000 tyres, resulting in a staff surplus of 168 employees.

Moving to shorter working hours “would just postpone, but not prevent the eventual closure of the plant,” said Hans-Joachim Nikolin, Continental executive board member.

The company said that even a significant double-digit market recovery in 2010, from a substantially lower level, would lead to under-utilisation of capacities in Stöcken by far more than 50 percent and by as much as 70 percent at the end of the shorter working time period.

“The uniform distribution of the production quantities that could be sold in the market to the two key plants in Stöcken and Puchov (Slovakia) would result in additional costs of Euro 30 million - Euro 40 million per year, even if capacities in Stöcken were fully utilised and there were layoffs in Puchov,” the company said.

“We therefore explicitly and urgently ask all those involved to bear these facts in mind,” added Went and Nikolin. “The time has now come for an objective exchange.”

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Press release from Continental AG