A massive restructuring is reported to lead to the elimination or transfer of 30,000 jobs in the Automotive Industry, Continental has reported. In fact, this drastic action was caused by Asian rivals going into Europe. From there, they went into the market with way too many tires.
10th Tire Factory to Close or Restructure
Continental’s plant in Aachen, Germany’s westernmost city will approximately be the 10th tire factory in Western Europe to close or restructure in a five-year period. CEO Elmar Degenhart told reporters on Wednesday, September 30th. “We had so far been able to withstand this development, but is reaching a point where the overcapacity in Western Europe is between 13 and 15 million passenger-vehicle tires,” he said.
Aachen Factory Shut Down
The Aachen factory will shut down by Continental at the end of 2021. The shutdown will affect as many as 2,000 jobs. However, Continental’s supervisory board approved a more severe reorganization of the almost 150-year-old manufacturer. Degenhart spoke after the supervisory approved this extreme step.
Efforts To Revive Profits
Last year, measures to boost profit were insufficient as the COVID-19 pandemic hurt global car production and it heavily weighted on prospects for the auto industry.
Workforce Cuts, Jobs Transfer
As of September 1st, Continental said it planned to cut or transfer as much as 13 percent of its workforce to reduce costs by at least 1 billion euros ($1.2 billion) a year. Therefore, put into place by 2025, with some 90 percent of the restructuring measures as they would affect 30,000 automotive jobs.
13,000 positions will move to other areas under the restructuring of the company’s German operations will be hit hard. In Karben, north of Frankfurt, an auto-electronics plant, will close by the end of 2024. About 232,000 people work for Continental. This includes 59,000 in Germany.
Outlook For Full Year, Persistent Market Uncertainty With Jobs
Continental is hesitant to provide an outlook for the full year, citing ongoing market uncertainty. As a result, the global market may not return to 2017 levels until the middle of the decade. As a result, the company has forgotten plans to spin off. This would include its powertrain division Vitesco Technologies until markets start to improve.
