Continental AG (Germany, acquired by Schaeffler Group KG) announced it will close two European tire plants, in Hanover and Clairoix. Schaeffler will close a timing chain plant.

Hanover produces 1.4 million truck tires per year. The plant will lay off all 780 workers and be shut down by the end of 2009.

Continental Clairoix, in France, will close by the end of first quarter 2010. It currently produces nearly 8 million automotive tires per year.

A Continental spokesman said these are its two highest-cost manufacturing facilities, and the company needs to continue adjusting to its worldwide overcapacity as the automotive and truck markets continue to decline.

Continental's OEM business fell more than 20% in the fourth quarter of 2008; it collapsed another 30% on top of that during the first quarter of 2009.

Conti's parent Schaeffler announced it is closing a timing chain factory in St. Simeon de Bressieux, France, and moving the work to a facility in Calais which employs 300 workers. Approximately 200 people at Chain Drive Systems in St. Simeon de Bressieux will lose their jobs and receive severance pay when the plant closes, but they will be given preference for any new positions opening within Schaeffler.

Schaeffler said combined automotive OEM and aftermarket demand for timing chain has fallen by more than half in recent months.