Continental Ends Hanover Passenger Tyre Production

Continental AG has announced that it will reduce the number of staff working at its Hanover-Stöcken plant by 10 per cent, by the end of 2006. The job losses will affect 320 tyre production employees.

“The unexpectedly weak growth in passenger tyre sales…left us no other choice in the end but to schedule discontinuation of passenger tyre production in Stöcken as of 31 December 2006 and to demonstrate cost-optimised flexibility at other plants by cutting back the number of shifts,” said Manfred Wennemer, chairman of the executive board of Continental AG and board member responsible for the Passenger and Light Truck Tires division.

Wennemer pointed out that Continental’s aims to deal with the weak market by exhausting capacity at low-cost plants and reducing capacity at high-cost plants. The corporation produces a total of more than 105 million passenger tyres each year, mostly at factories with an annual capacity of at least eight million passenger tyres. With an annual turnout capacity of around 1.3 million passenger tyres, Hanover-Stöcken is Continental’s smallest and also its most expensive passenger tyre plant overall.

Discontinuation of production also triggers a rescinding of the plant agreement on longer working hours at equal pay for this sector of production. “In concluding the plant agreement of May 2005 and making the production commitment contained therein, management had envisioned a much stronger market development and seen in this a possibility to give the plant a further chance,” an official statement read.

Wennemer indicated that discontinuation of passenger tyre production would not have any direct repercussions on tyre research and development or on other branches of production at the plant. “Cost optimisation is an ever-present duty and one that we can successfully fulfil in Stöcken as well.”