GUADALAJARA, Mexico (Dec. 17, 2001)—Continental A.G. has closed the Guadalajara plant of its CompaÃ±Ãa Hulera Euzkadi S.A. de C.V. subsidiary, eliminating 1,164 hourly and salaried jobs.
Continental blamed the closing on the labor union at the plant, saying nearly two years of “repeated efforts to implement international productivity standards proved ineffective due to internal union politics.”
Conti said the closing will not affect the commercial viability of the Euzkadi brand nor the operations of a second plant in San Luis Potosi. Continental's other factories in the U.S. and Mexico will absorb the production being taken out of service.
The 29-year-old plant in the Guadalajara suburb of El Salto produced 3 million radial car, light and medium truck, and farm tires annually, Conti said. Employees will receive full severance payments according to Mexican law, Conti said.
Continental Tire has an estimated market share in Mexico of about one-third, with its Continental, General and Euzkadi brands. Throughout 2001, Conti has identified the situation in Mexico as one of the drains on earnings for Continental Tire North America Inc., which suffered an operating loss of $21.5 million in the third quarter and $68.9 million for the nine months.