Continental Tyre Process Could Cut Costs

German tyre manufacturer Continental AG yesterday downplayed a report that new machinery in development would dramatically reduce production costs and jobs. Prototype machines appeared to offer cost savings in one step in tyre production but were still years away from widespread use, the company said.

Short-term we see no change in the number of workers, said spokesman Dieter von Herz. It's still expensive technology. It could improve quality of our products but this technology won't be ready for five to 10 years.

Machinery slated for production tests in the United States this year could reduce costs and labour enough to make tyre production in Germany and the United States competitive with low-wage countries such as India, North German Radio (NDR) reported yesterday morning.

 

The more flexible process can be reset to produce different types of tyres, and should have an impact on Continental's financial results and its headcount, NDR reported.

But in a statement Conti's management board said: This machine is no real danger for our workforce. Much more important is that with this development we will be in a position to secure jobs in high-cost locations in central Europe.

In the first three months of 1996, Conti's pretax profit rose 62 per cent to 125 million marks ($74 million), fuelled largely by shifts of production from low-wage countries. Sales in the period rose 2.6 per cent to 7.63 billion marks.