To meet growing demand, Continental AG is adding around 1,200 jobs and spending around $524 million (370 million euros) as it builds a new factory in the south of the United States and expands a plant in Illinois.
The plant in the south, according to the CEO of its North and South American tire unit Matthias Schoenberg, may cost approximately $300 million. Continental is the fourth biggest manufacturer of tires in the world.
On the other hand, the company will be investing approximately $224 million for the factory in Mount Vernon in Illinois so that it can increase tire production capacity by 4 million per year before 2014.
Schoenberg, who will become the company’s head of fluid-technology unit in July, further disclosed that the company’s sales growth over the years has been “so much stronger” than the growth of capacity despite all the investments it has made.
"That's something we hope we'll change through this investment," Schoenberg further stated. Tire manufacturers including Continental, Bridgestone Corp., Goodyear Tire & Rubber Co. and Cooper Tire & Rubber Co. are moving quickly to cope with demand after halting operations during the worst recession in the U.S. since the Great Depression.
Continental approved the plan this month to build a tire factory in the south, which is closer to the vehicle production in Tennessee, Georgia, Alabama and South Carolina.
The company expects to select the location of the plant before October, and to start the operations as early as 2013. Schoenberg added that new plants typically employ approximately 750 workers. He declined to give a specific number for the planned factory.