Continental to Close Hanover and Clairoix Tyre Plants

Closing the Clairoix passenger car tyre production plant will reduce Continental AG’s annual passenger and light truck tyre production capacity by 8 million units in two steps. This means tyre production will not be phased out completely until at least 31 March 31 2010. Earlier reports published by French automotive website autoactu.com on 3 March suggest the decision to close Clairoix is said to have been made late last year, however implementation has reportedly been difficult.

The closure of the Hanover-Stoecken truck tyre plant, which up till now was producing around 1.4 million truck tyres a year, combined the announced 20 per cent cut in production in Puchov, will lower commercial vehicle tyre production throughout Europe by a total of 27 per cent. “We have studied various options and concluded that the competitiveness of the tyre divisions can be maintained only by closing the two plants with the highest costs – and these are the passenger tyre plant in Clairoix and the commercial vehicle tyre plant in Hanover,” said executive board member in charge of the tyre divisions, Dr. Hans Joachim Nikolin, adding: “It has not been easy for us to present these plans to those concerned. Regrettably, there is no alternative. We shall continue talks on this very difficult situation with the employee representatives at the plants in question and discuss the next steps to be taken. It goes without saying that we shall do everything to provide the employees affected far-reaching assistance.”

“Steadfastly dire market trend”

Contiental’s production cuts come on the back of huge falls on vehicle maker demand. In the fourth quarter of 2008, the commercial vehicle original equipment tyre business declined by 20 per cent in Europe, and this trend has accelerated dramatically in the first two months of 2009. And if that wasn’t bad enough, the European commercial vehicle tyre replacement market reportedly plummeted by over 15 per cent in the last quarter of 2008. The situation has been even worse in the European passenger tyre original equipment business, which declined by 20 per cent in the fourth quarter of 2008 and by more than 30 per cent in the first two months of this year. The passenger tyre replacement market also shows a “considerable weakening of demand,” said Dr. Nikolin: “Since the downturn set in last fall, we have managed to avoid taking trenchant measures by resorting to other instruments at our disposal – production flexibility and the reduction of surpluses on working time accounts, longer plant vacations, the capping of contracts for temporary workers and shorter working hours for core staff. Unfortunately, in the face of a stubborn slump in demand of this great magnitude, the short-term measures at our disposal are no longer sufficient.”