FRANKFURT (Reuters) - German automotive supplier Continental AG (CONG.DE) on Wednesday said it would cut jobs and close plants over the next 10 years as it faces a slowing global auto sector.
The program will result in costs of around 1.1 billion euros (972.9 million pounds), which will mainly be incurred between 2019 and 2022, the company said after a meeting of its supervisory board.
The slowdown in the auto sector has prompted profit warnings from various suppliers, including Continental, in recent months.
Following a review of its strategy, Continental said it will discontinue business at two of its German plants, as well as at locations in Italy, Malaysia and the U.S..
Continental did not say how many jobs would be lost but 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.
It said there were a number of reasons for the cuts, including “lower business volumes as a result of weaker markets and the discontinuation of operating activities.”
The supplier sees savings in gross costs of about 500 million euros a year from 2023.
Reporting by Tom Sims, editing by Riham Alkousaa and Kirsten Donovan