German state leader objects to Continental job cuts

Reuters / Automotive News

Frankfurt, Germany -- A senior German politician turned up the heat on tyre maker and car parts group Continental AG on Wednesday to reverse its decision to halt passenger car tyre production at a German plant in Hanover and cut 320 jobs.

"Closing down profitable production is not acceptable," Lower Saxony state premier Christian Wulff told the state's parliament, a day after thousands of workers staged protests over the step that has inflamed public opinion.

Continental's CFO Alan Hippe told Reuters on Tuesday, Dec. 6, that the decision would stand as the group cuts costs where it can to address severe competition. The Hanover plant will still make truck tyres.

"We cannot put our competitiveness at risk just to be patriotic," he said, noting that 40 percent of global staff still work in Germany despite moves to boost production in low-cost centres.

Wulff took issue with Continental's decision given that workers had agreed only in May to work extra hours at no extra pay as a way to cut labour costs and keep output going.

"This spirit of compromise and reason should be seen as something of great value," Wulff said. "It seems that is not the case at Conti."

Germany media have criticised the company and top managers over the job cuts, while Continental has said the Hanover plant is its smallest and most expensive car tyre plant at a time when demand has fallen below expectations.

From Automotive News (A Crain publication)