Continental has said it will close two European tyre factories – one specialising in CV tyres in Germany and another in France.

The firm blamed the recession and its impact on OE and aftermarket business in Europe since the fourth quarter.

The firm said that in the fourth quarter of 2008, the commercial vehicle original equipment tyre business declined by 20% in Europe and the ‘trend has accelerated dramatically in the first two months of the current year’. It said also that the European commercial vehicle tyre replacement market plummeted by over 15% in the last quarter of 2008. The European original equipment business in the passenger tyre sector declined by 20% in the fourth quarter of 2008 and by even more than 30% in the first two months of the current year, Conti said.

Dr. Hans-Joachim Nikolin, Continental Executive Board member in charge of the tyre divisions said: “Since the downturn set in last fall, we have managed to avoid taking trenchant measures by resorting to other instruments at our disposal – production flexibility and the reduction of surpluses on working time accounts, longer plant vacations, the capping of contracts for temporary workers and shorter working hours for core staff. Unfortunately, in the face of a stubborn slump in demand of this great magnitude, the short-term measures at our disposal are no longer sufficient.

“We have studied various options and concluded that the competitiveness of the tire divisions can be maintained only by closing the two plants with the highest costs – and these are the passenger tire plant in Clairoix and the commercial vehicle tire plant in Hanover,” said Dr. Nikolin. “It has not been easy for us to present these plans to those concerned. Regrettably, there is no alternative. We shall continue talks on this very difficult situation with the employee representatives at the plants in question and discuss the next steps to be taken. It goes without saying that we shall do everything to provide the employees affected far-reaching assistance.”

Commercial vehicle tyre production at Conti’s plant in Hanover will end by December 31, 2009. Some 780 employees will be affected. Production at a plant in Puchov, Slovakia, will be reduced by 20%. Together this will lower commercial vehicle tyre production throughout Europe by a total of 27%, the company said.

The company said that its plant at Clairoix, France, has the highest production costs of any passenger car tyre factory in Europe.

Its closure aims to reduce yearly PLT production capacity by 8m units. 1,120 Clairoix employees would be affected. Production would be reduced in two steps and would not be completely discontinued before March 31, 2010.