Auto parts supplier Continental has announced that due to low demand it will reduce production in Germany by closing four factories and moving a production line to the Czech Republic.
To save 400 million euros a year, the group plans to lay off over 7000 employees, according to a restructuring plan that has been in the works for more than a year.
Today, the company reported that it will close the factories in Bad Blankenburg, Stolzenau and Moers, as well as the merged complex in Frohburg and Geithain.
By the middle of this year, a production line from the Hannover-Vahrenwald plant will be relocated to the Czech Republic. Production at the Hamburg plant will also be reduced.
"Trends in the development of the automotive industry and the lignite mining sector in Europe are bringing us challenges," said Continental's executive board member and head of the ContiTech department, Philip Nelles.
The reduction in production in Germany will affect a total of 580 employees, according to the company's statement, dpa writes.
In November, German magazine Manager Magazin reported that Continental plans to eliminate around 5500 jobs worldwide, representing nearly 3 percent of its workforce.
Management plans to cut mainly administrative positions, while production and development jobs will not be affected for the time being.
"We are considering additional measures to strengthen competition in the automotive sector, including possible changes to the administrative structure, to ensure conditions for faster and more flexible decision-making," said the head of the executive division, Philipp von Hirschheydt, adding that he could not confirm whether the decision had already been made.
Numerous automotive companies across Europe are closing factories and laying off employees due to low demand, high costs and competition from China. /Telegraph/
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