Continental announces plan for Aachen site – production ending in 2022
Tyre production at the Continental plant in Aachen, Germany will cease at the end of next year, if not earlier. This is one of the outcomes of talks between the company and representatives of Aachen plant employees. Continental has also published details of upcoming retraining programmes.
Although plans to close the factory were initially met with combative language from union representatives, including the threat that job cuts “will be expensive,” Continental reports that the parties involved have now agreed on the general conditions for the “socially responsible discontinuation of tyre production.”
Gradual phase-out of production activities
Anyone following developments in Aachen may have noticed that Continental now intends to end production later than it first announced. The company explains that the various parties have agreed to retain up to 1,200 employees to make tyres up to the end of 2022 at the latest, with production gradually phased out. Up to 500 employees will then remain at the plant in 2023.
In addition to financial compensation, the agreed ‘social plan’ includes numerous measures to provide support for affected employees. Continental shares that the plant’s decommissioning will be accompanied by a “comprehensive training initiative” that aims to enable as many employees as possible to make the direct transition “from work to work.” For employees approaching retirement age, the extension will also simplify the transfer to a statutory pension. Continental is setting up a transfer company for the training and procurement of follow-up employment on the job market. The social partners have also agreed on a volunteer programme.
Practiced & resilient social partnership
“The discontinuation of tyre production in Aachen is painful. We are aware of the consequences of this step for our employees, and we stand by our responsibility,” says Dr Ariane Reinhart, Continental’s Executive Board member for Human Relations. “We can only overcome the transformation of our industry and its jobs through a practiced and resilient social partnership. The agreement now reached creates clarity and prospects for our employees in Aachen and is an expression of the social partners’ ability to shape the future. Our training initiative is intended to enable the affected employees to make as direct a transition as possible ‘from work to work.’”
Plant employees have the opportunity to retrain for the internal and external job market at full pay. Unskilled and semi-skilled employees in particular can, for example, complete a further training course certified by the German chambers of industry and commerce at the company’s own CITT (Continental Institute for Technology and Transformation) with the option of obtaining a full professional qualification. In addition, the company will ensure that all trainees at the Aachen tyre plant can complete their training at Continental.
Extending production into 2022 provides additional time for the ongoing talks on the viable re-use of the factory premises to reach a satisfactory conclusion. Continental says it will “maintain an open dialogue with all stakeholders” and “work in close coordination” with them. The parties discussing the factory site’s future use includes participants of a City of Aachen round table that was set up for this discussion.
Massive structural overcapacity in Europe’s tyre market
The company views the discontinuation of tyre production in Aachen as an “unavoidable” measure caused by “massive structural overcapacity in the European tyre market.” The market hasn’t grown for several years and the tyre maker doesn’t anticipate a recovery in market demand in the foreseeable future.
“Continental must therefore adjust its production capacity to the declining market trend in order to secure the competitiveness and future viability of its remaining tyre production in the long term,” states Continental. “The tyre plant in Aachen is the smallest and also the most cost-intensive site in the company’s European production network.”