Continental confirms Aachen plant closure amid protests

Hundreds of people protest at demonstrations against the closure of the Continental tire factory.

Continental's Supervisory Board has officially approved the decision to close the tire plant in Aachen (Germany) by the end of 2021, which, according to the company, is related to the need to remain competitive in the tire business. 1,800 of the company's 2,000 employees will lose jobs, and Continental's decision led to major protests in three German cities - Aachen, Frankfurt and Hannover, where the group is headquartered.

“The production shutdown in Aachen is a painful event for everyone involved,” said Philip von Hirschheidt, Head of Continental's Car and Truck Tires Europe. - It was not an easy decision for us. However, we do not expect the overcapacity to change over the next five to ten years, and since overcapacity is projected to be 15 million tires in the long term, we must act now. Only by reducing excess capacity will we be able to remain competitive in the tire market. ”

Continental says it is working with employees to find socially responsible solutions for those affected by the decision to close the plant. The employees themselves strongly oppose the stoppage of production, and on September 29, according to the IG-BCE, more than two thousand people, including one thousand employees of the plant in Aachen, took part in a protest in Hanover.

“Here we are discussing not just the decision of the supervisory board,” said the head of the union, Michael Vassiliadis, addressing the demonstrators. “This is where the German flagship company decides whether to go out of the way of solidarity and social responsibility. Unnecessarily and in great haste, the board of directors intends to pass a decision that will harm both Conti and the entire industry. We do not hear a word about the social acceptability of this step, not a word about the future of those who will be affected by it. "

Continental says the reason for the closure is because excess production has been created at all of its factories in Europe. “Continental needs to align its manufacturing capacity with market demand and reduce costs in Europe,” Continental said in a statement. “For several years now, overproduction has led to extremely significant financial losses that harm the long-term competitiveness of the company. Aachen produces eight million passenger car tires a year and is the company's smallest yet most expensive production in all of Europe. ”

Continental also notes that the European car tire market has stagnated since 2017. “Since 2018, the number of cars produced has been decreasing year after year,” the company says. “The changes in the automotive industry will fully affect the suppliers, that is, Continental and the company's tire business. While the market remains stagnant, new suppliers continue to intensify competition, and as a result, the surplus of production increases even more - and this is in a market that will not grow in the foreseeable future. "

The workers were supported by Armin Laschet, the prime minister of North Rhine-Westphalia, who called for the refusal to close the plant and called Continental's actions "cold capitalism." He also supported the union's proposal to cut production at all Continental plants instead of closing one of them.

The closure of the Aachen plant is only part of a full-scale restructuring program that Continental plans to undertake. As the company recently confirmed, the reorganization will directly affect 30 thousand people, including 13 thousand in Germany.

Michelin has closed two tire factories in Europe in the past few years, while Bridgestone recently announced a production stop in Bethune, France. The future of the Goodyear plant in Montlucon, France, is also a concern for unions.