HANOVER, Germany (Jan. 13, 2006) — Continental A.G. will phase out production of passenger tires at its Hanover-StÃ¶cken tire plant by year-end 2006 and cut employment there by 10 percent, or 320 workers.
Conti cited “unexpectedly weak growth” in car tire sales for its decision to discontinue passenger tire production at the 66-year-old plant.
The firm also will cut back the number of shifts at other plants to cut costs, Conti Chairman Manfred Wennemer said, while also reiterating Continental's fundamental strategy—to deal with weaker markets in cost-intensive sectors by filling capacity at low-cost plants and cutting capacity at high-cost plants.
Continental produces more than 105 million passenger tires a year, mostly at factories with an annual capacity of at least 8 million units.
Hanover-StÃ¶cken, with annual production of about 1.3 million passenger tires, is Continental's smallest factory and also its most expensive passenger tire plant overall. The factory also makes light and medium truck, agricultural/off-road and industrial tires.