SEGUIN — Continental AG announced Thursday it will cut 100 local jobs beginning the first quarter of 2007 and wrapping up by the end of the year.
The job losses will affect administrative and technical positions at the Continental manufacturing plant in Seguin, which was formerly operated by Motorola.
The move is the result of the company’s realignment of electronics manufacturing in North America, said Continental Manager of Communications Sue Frederick.
The Seguin plant’s Telematics division, which, for example, produces devices that alert emergency services when an automobile’s air bag has been deployed, will be transferred to a plant in Nogales, Mexico.
The Seguin plant will continue to manufacture engine, chassis and transmission control products and shift its focus to pre-production and the development of new products.
Continental plans to establish the local plant as a “North American Center of Manufacturing Excellence” and one that will develop best practices to serve as manufacturing models for other plants.
Also a result of the realignment, an electronics manufacturing facility in Elma, N.Y., will be shut down by 2009.
The move is Continental Automotive Systems’ latest step in a program that has seen the $7.2 billion division shift production to Eastern Europe and Asia, establish an engineering center in India and expand its engineering presence in China.
“This is a difficult decision,” said Henner Cnyrim, senior vice president of operations. “Rapid globalization and the emergence of lower-cost producers are driving the restructuring of virtually the entire automotive industry. The production of automotive electronics is not immune to this transformation, and Continental Automotive Systems is making changes to its business to strengthen its long-term competitiveness and provide value to its customers. As we move forward, we will continue to evaluate our electronics manufacturing strategy in all regions to ensure the competitiveness of the division.”
James O’Toole, vice president of operations, said in light of the softening in the automotive market this year, the necessity of addressing the manufacturing financial issues became more urgent. O’Toole thanked employees for the dedication to the company.
“We are grateful to our employees for their commitment and hard work over the years,” O’Toole said. “We are committed to treating our employees with respect and will do all we can to support those affected by today’s announcement.”
Frederick said that support will include comprehensive severance packages and career transition services for eligible employees.
The Continental Corporation is a leading automotive supplier of brake systems, chassis components, vehicle electronics, tires and technical elastomers. The German company acquired Motorola’s automotive electronics business in early April.
Seguin Economic Development Director Ramon Lozano said when the billion-dollar deal was inked, the community feared for the worst. In spite of the job loss, Lozano said, Seguin fared better than other communities that lost their entire operations.
“Any loss of jobs in the community is unfortunate. In the case of Continental, with their recent acquisition, there was a period of time where the community thought the whole facility would close its doors,” Lozano said. “We’re very glad it will remain in the community. One-hundred jobs is sizable, but we’re glad the lion’s share of jobs will remain.”
Ramon attributed Continental’s decision to keep the Seguin plant in operation — unlike its counterpart in New York — to the company’s recognition of the city’s highly-trained workforce.
Continental employs about 1,400 full-time and contract workers in Seguin, Frederick said.
The layoffs are uncharacteristic of the current economic climate in the city, which has experienced low 4.5 percent unemployment rates.
“That’s a good thing but also a challenge when we’re trying to recruit new companies,” Lozano said.
Lozano said it’s difficult to estimate the impact the Continental job losses will have on the rate because it’s unknown how many workers reside in the city. He expressed optimism that jobs lost will be replaced by new opportunities as Seguin continues to recruit industry.
When asked about the effect of the changes on the Seguin facility’s taxable value, Frederick said “since the reductions aren’t scheduled until the first quarter of next year, there are still a number of variables that are being sorted through, so I don’t have any specific information about the impact this may have on taxes.”
Continental is the largest single taxpayer for Navarro ISD, which has seen the value of the plant drop by millions during the past few years.
Email This Page!