Continental AG will stop making tyres at its Mayfield, Kentucky, plant by year end to cut losses at its US operations, the tyre maker told Reuters.

The report said the shutdown will affect about 827 jobs and follows April’s news of an output cut at the factory that is due to become effective in July and involved 200 job cuts.

Mixing and some warehousing operations will continue in Mayfield, Continental reportedly said.

“We have been weighing our options at Mayfield for some time. We must remain cost-competitive in the market and our industry,” said Martien de Louw, CEO of Continental’s US tyre-making unit, said in a statement cited by Reuters.

“Unfortunately this was our only option, as Mayfield remains the highest cost plant for Continental,” he reportedly added.

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According to Reuters, Continental said this year its 2004 profits could be hit by the cost of restructuring its loss-making US operations – it did not say what charges would arise from the Mayfield production stop.

The news agency noted that Continental’s tyre making unit has almost 6,500 employees and operates six plants in North America – production at the other sites will continue.