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Continental to slash tire production in Europe

Continental to slash tire production in Europe

German auto parts and tire company Continental AG said Wednesday it would stop producing tires at its plant in Clairoix, France and reduce capacity at other sites in Europe, laying off workers as a result.
The Hanover-based company said that due to a steep drop in car sales it would end tire production in Clairoix by the end of March in 2010. The move would affect some 1,120 employees that make passenger car tires.
Continental said it would also stop making commercial vehicle tires at its plant in Hanover, Germany on December 31, prompting some 780 job cuts, and plans to reduce its commercial vehicle tire capacity by 20 percent at its Puchov, Slovakia site.
The measures in Germany and Slovakia will lower commercial vehicle tire production in Europe by more than a quarter.
"In the fourth quarter of 2008, the commercial vehicle original equipment tire business declined by 20 percent in Europe," Hans-Joachim Nikolin, a Continental tire division representative said.
Nikolin said production was down 30 percent in the first two months of 2009.
"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," Nikolin said.
Continental said it expects its tire plants in Europe to work below full capacity in 2009 by 15 million passenger car tires and 1.7 million commercial vehicle tires.
Luc Chatel, the junior French minister for industry and government spokesman, met directors of the Continental factory in France last week.
"If the group persists in its restructuring, it will have to justify in court the reason, the motivation for such layoffs, especially in a period in which the group Continental announced positive earnings in 2008 in its tire business," he told reporters in Paris on Wednesday.
Shares of Continental were 4.3 percent lower at