TRAISKIRCHEN, Austria-Continental A.G. plans to cut passenger car tire production at its Semperit Reifen A.G. plant in Traiskirchen by one-half and trim nearly 20 percent of the workforce, measures local labor leaders interpret as a closure warning. This proposal has aroused stiff opposition in Austria, where a government task force has floated the idea of buying the unit back from Conti, which has owned and operated Semperit since 1985.
Conti is willing to entertain offers for the plant, a spokesman said, but will not sell the rights to the Semperit name.
Conti's plan to reduce annual car tire capacity to 2 million units during 1997 would result in the loss of at least 400 of the unit's 2,200 jobs, and result in savings of more than $33 million, Conti said. Semperit's truck tire production would not be affected by the move.
The 2 million units of car tire production is roughly equal to the Conti group's market presence in Austria, the company said. However, a Semperit spokesman said the firm sold nearly 7 million Semperit-branded units last year-18 percent of Conti's European tire sales.
Redundant machinery at Traiskirchen will be transferred to Continental Barum in the Czech Republic, where labor costs are only about 15 percent of those in Austria, according to labor sources. Excess machinery at Barum might then be transferred to Conti's new joint venture in India with Apollo Tyres Ltd.
Traiskirchen's dilemma stems in large part because Semperit has lost most of its lucrative original equipment business with Japan.
Before Austria joined the European Union, it had a trade deal with Japan allowing Japanese-made cars into the country if they contained a certain percentage of Austrian-made content. This resulted in Semperit delivering as many as 2.4 million tires in a year to Japan. That fell to 500,000 units last year and likely will run out completely next year, a Semperit official said.