MUNICH, Germany — Continental A.G. is planning to close its car and light truck tire plant in Aachen, Germany, by year-end 2021, according to information from the trade union IG BCE, which said the closing would impact 1,800 jobs.
Conti, which is struggling with heavy losses, announced at the beginning of September that it would tighten its ongoing austerity and corporate restructuring, moves that could impact up to 30,000 jobs at the diversified auto supplier.
However, the tire division is still considered to be comparatively profitable. The company reported a 41% drop in pre-tax operating (EBITDA) income of $792.7 million for the first half of 2020 on 23% percent lower sales of $4.88 billion.
The IG BCE called the move "not justified by the transformation of the car industry, nor by the Corona crisis," according to Francesco Grioli, a member of the union's executive board.
Christiane Benner, vice chairwoman of the trade union IG Metall and deputy chairwoman of Continental's supervisory board, added: "Announcing further job cuts is a short-sighted answer to economic problems. ... Conti management must finally come up with a future-oriented business strategy. We will not allow a traditional company to be ruined."
Continental has not commented publicly on the matter.
The factory in Aachen — a city of nearly 250,000 in western Germany near the border with Belgium and the Netherlands — was opened in 1931 by then-independent Belgian tire maker Société du Pneu Englebert, which became Uniroyal-Englebert in the late 1950s. Continental acquired that company in 1979.
Capacity there stands at 8 million units a year, according to Conti data. Among products built there are Conti's "SSR" (self-supporting) run-flat tires.
Udo Bohnhof, chairman of the works council at the plant, said: "This plan hits us without any warning.
"In a crisis, the board of directors falls back on management methods that have long been believed to have been overcome. That speaks of central Conti values such as trust and solidarity."
Deputy Works Council Chairman Bruno Hickert added: "For years, our colleagues have been working 40 hours a week without wage compensation, and the profits from Aachen have helped to finance the expansion of the tire division worldwide. And that should now be the thanks?"