German auto supplier Continental has announced its plans to gradually close down its plant in Gifhorn, northern Germany, by the end of 2027. The decision comes as the company aims to combat cost pressure and cope with declining automotive markets.
Relocation and Outsourcing
Beginning in 2024, Continental will kick-start the process by relocating the assembly line of air-supply systems. Additionally, the replacement-part business will be gradually moved from 2024 onwards. The company also intends to outsource the production of valve blocks and piston crowns for brake systems to suppliers by the end of 2027.
Impact on Jobs
Initially, this transition is expected to affect around 450 jobs out of the existing 900 at the Gifhorn plant. However, by the end of 2027, all 900 employees will be impacted. Nevertheless, Continental is committed to supporting affected employees by facilitating their transition to new positions within the company or assisting them in securing employment elsewhere.
Reasons for Closure
The decision to close the Gifhorn plant is primarily attributed to its uncompetitive cost structure, along with the broader cost pressure and market decline within the automotive industry. Continental emphasizes that this move is separate from its ongoing structural program.