Continental to close Semperit tyre plant
In December 2001, the German-based tyre manufacturer Continental announced its intention to close its Semperit unit in Traiskirchen, Austria, by July 2002. The closure will put 1,300 people out of work. Austria's ÖGB trade union confederation and opposition Social Democratic Party have protested vehemently against the closure and demanded that the government take measures to maintain tyre production at the location.
On 6 December 2001, the German-based tyre manufacturer Continental AG decided to shut down by 2002 its subsidiary Semperit, Austria's only tyre production plant, located in Traiskirchen. This will mean a loss of a total of 1,300 jobs, with 1,000 employees to be made redundant almost immediately. The remaining 300 employees, who work in the factory's mixing or finishing areas, will presumably be made redundant one year later.
According to Continental, the weakening demand for passenger car tyres and the increasing price competition in this market in recent years are two main reasons leading to the closure of the Traiskirchen plant. In addition, and of more general importance, the company is pursuing the strategic goal of producing about 50% of its total output in low-wage countries. This implies a tendency to relocate production from western Europe to eastern Europe. However, the management of the company stated that the Austrian sales unit, which provides 100 jobs, will not be affected by the closure.
The Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund, ÖGB) and the opposition Social Democratic Party (Sozialdemokratische Partei Österreichs, SPÖ) have urged the government to take measures to prevent the closure of the tyre production factory. Fritz Verzetnisch, president of ÖGB, called upon the Minister of Economic and Labour Affairs, Martin Bartenstein, to summon a meeting of the National Economic Commission (Staatliche Wirtschaftskommission), consisting of representatives of the Ministry of Economic and Labour Affairs (Ministerium für Wirtschaft und Arbeit) and the social partners, to conduct negotiations with the management of Continental. This Commission can be called in under the terms of Labour Constitution Act (Arbeitsverfassungsgesetz), which provides employees' representatives with co-determination rights in the event of major company decisions. However, the Commission may not impose sanctions on privately owned companies for closing down their plants. Moreover, it does not seem likely that the management of Continental will change its course of action, given its strategic goal of transferring production to low-wage countries.