Continental plans a decade-long restructuring plan that will lead to the closure of plants in Europe and the U.S. in an effort to restore profits as vehicle production slows in key markets.
The supplier did not say how many jobs would be lost but it estimates that globally 20,000 of its 244,000 positions will be affected by job cuts or job creation and the sale or transfer of parts of the business.
The restructuring will affect 7,000 employees in Germany, where the supplier employs 62,000 people, Continental said.
Continental listed some of the sites that will be affected in the restructuring:
- In Germany, the production of high-pressure pumps will end in Roding, Germany, affecting 540 people, and a diesel-injector operation in Limbach-Oberfrohna that employs 1,230 people will be shut down.
- In Pisa, Italy, the production of gasoline injectors will end, affecting 940 jobs.
- In the U.S. Continental said it plans to close a plant in Newport News, Virginia, by 2024. The factory produces gasoline injectors and employs 740 people. A factory in Henderson, North Carolina, will close. The plant makes hydraulic brake systems and employs 650 people.
CEO Elmar Degenhart said Continental would reduce headcount through attrition and offer alternative jobs at other sites where possible, although he did not rule out layoffs as a "very last resort."
"We are determined to protect our affected employees as much as possible and offer them prospects for the future," he said in a statement on Wednesday.
Continental said it would offset some of the job losses with increased hiring in high-tech areas such as software engineering.
The supplier will invest about 1.1 billion euros through 2029 in an effort to cut costs by 500 million euros annually starting in 2023.
Continental said it was not ruling out further restructuring "if the current program does not achieve the desired impact."