Continental wants to close tyre plant despite employment pact

On 22 November 2005 the Continental AG, Hannover, Germany, announced that it would close down its production of vehicle tyres at the company’s site in Hannover-Stöcken at the end of 2006 and cut 320 jobs. This announcement was made despite an employment pact concluded between the company and the works council in May 2005 in which the company had agreed to maintain the tyre production at the Stöcken site in exchange for longer working hours without pay compensation. The Mining, Chemicals and Energy Industrial Union (IG BCE) said it was the first time a company had not honoured such an employment pact and regarded the company’s move as a revocation of social partnership at Continental.

On 22 November 2005 the Continental AG, Hannover, Germany, announced that it would close down its production of vehicle tyres at the company’s site in Hannover-Stöcken at the end of 2006 and cut 320 jobs. Continental employs a total of about 80,600 people, of which 31,800 work in Germany. Besides vehicle tyres the company produces a wide range of parts for the automotive industry. The company’s announcement was made despite an employment pact concluded between the company and the works council in May 2005 in which the company had agreed to maintain the tyre production at the Stöcken site in exchange for longer working hours without pay compensation. In a statement to the press the Continental justified its move with worldwide developments on the tyre market, stating that there were excess capacities and the closure of the Stöcken plant was in line with the company’s strategy to switch production to low-cost sites. Continental produces about 100 million tyres worldwide and has important production sites in eastern Europe and South America. The tyre plant in Stöcken has a capacity of 1.3 million to 1.5 million tyres a year. Two other German plants run by Continental in Aachen and Korbach have capacities of about 8 million tyres.

The Mining, Chemicals and Energy Industrial Union (Industriegewerkschaft Bergbau, Chemie, Energie, IG BCE) protested against the plans of the company. 3,000 employees took part in a rally in Hannover on 23 November 2005. The IG BCE demands that the tyre production in Stöcken should be maintained and that the company should honour the employment pact which was concluded in May 2005 between the works council of the Hannover site and the company.

This works agreement is based on a so-called opening clause in the framework collective agreement for the chemicals industry which applies to Continental and allows deviation from the collective agreement with the consent of the bargaining parties ie trade union and employers’ association for the chemicals industry. Following this opening clause the parties at company level agreed to increase the weekly working time from 37.5 hours to 40 hours without pay compensation in exchange for a commitment on the side of the company to produce at least 1.3 million tyres in Stöcken. The duration of the agreement was until 2009. The company has now declared that the agreement became void at the moment the company decided to close down tyre production at the Hannover site. The IG BCE said that this would be the first time that a company had not honoured such an agreement. According to the trade union the decision was unacceptable and the company was closing down a profitable production. According to the works council the tyre plant in Stöcken - although being the smallest within Continental - was the most profitable and contributed 10% to overall profits within the tyre division of the company.

The union fears that the closure of the tyre production in Stöcken is only the beginning of a complete relocation of the company’s tyre production in Germany. The IG BCE regards the move of Continental as a revocation of social partnership at the company. The chair of the IG BCE, Hubertus Schmoldt, said the trade union would now consider whether to continue other similar agreements with the company which are based on collectively agreed opening clauses.

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