Oppenweiler, Germany – Continental Corp. is considering the closure of its hose assembly plant in Oppenweiler, in central Germany, the company has announced.
The plant develops and manufactures refrigerant lines for the passenger car and commercial vehicle sectors and employs 340 employees.
The potential closure, announced earlier in June, is not part of a restructuring plan unveiled by Continental last week, company spokeswoman Antje Lewe said in a written statement 26 Sept.
The move, she explained, is part of a €150-million “margin improvement programme” announced by ContiTech in its nine-month statement in 2018.
The programme will seek to achieve the majority of enhancements through process improvements by 2020.
“One concrete example was an announcement that we have made in early summer in one of our German plants, in Oppenweiler,” she added.
In a statement released in June, ContiTech said that the decision had been prompted by “the lack of prospects for the future”.
“We unfortunately can no longer see any prospects for a long-term future. For that reason, we intend to cease operations in Oppenweiler,” said Christian Pfistner, the financial director at the site.
Sales figures in Oppenweiler have “fallen continually” over the past six years, according to ContiTech.
“We expect this trend to continue, so we foresee a further significant decline in our sales in the next few years,” Pfistner went on to say.
Despite moves to upgrade the plant, through partial automation and process improvements, the unit has been loss-making “for many years”, Pfinster said.
“That is not going to change in the future, either. This step is therefore a necessary response,” Pfistner added.
In addition to low sales, the plant has also suffered from a recent reduction in a customer’s order.
“The consequence of that is that the downturn in sales will be even more marked in the short term than originally forecast,” explained Pfistner.
The company is currently in talks with the works council to work out a compensation plan for the plant’s staff.
Operational since 1975, the manufacturing unit was established by Kühner and taken over by Continental at the beginning of 2000.