Stiebel Eltron will install a stainless steel cylinder production facility for heat pump heating systems at Continental's Gifhorn factory.

Earlier this month, the auto supplier said it would shutter the plant by the end of 2027.

It subsequently signed a letter of intent for Stiebel Eltron to take over the site.

Continental said the deal would ensure long term employment opportunities for as many suitably qualified employees as possible.

The company's 'from work to work' programme finds new jobs elsewhere in the company or at other firms for workers axed from its own facilities.

“The talks with Stiebel Eltron.... present the first potential opportunities for our workforce's future,” Conti HR chief Ariane Reinhart said in a statement.

It was also talking with "several" other companies.

For potential roles at Stiebel Eltron, Continental would offer training through its Institute for Technology and Transformation (CITT).

It said 8,500 workers had qualified for various posts either within the company or at outside employers by the end of 2022.

“Binding contracts must now be drawn up based on the letter of intent, which we will support however we can,” a Continental works council representative said.