Berlin - Giant German auto-parts maker Continental AG announced Wednesday a far-reaching shakeout in its business as the group struggles with the deepening crisis in the global car industry.

Faced with a dramatic slump in car sales and production, Hanover- based Continental said it was planning a massive cutback in production, the closure of factories and the elimination of about 1,900 jobs over the next 12 months.

Under the proposals it will stop producing truck and bus tyres at its main Hanover plant as well as shutting a passenger car-tyre factory in Clairoix in France by March 2010.

"We have considered the different options and have come to the conclusion that the competition of the tyre division can only be ensured through the closure of the two plants with the highest costs," said Hans-Joachim Nikolin, a member of the Continental board.

Overall Continental said it planned to slash the European-wide production of commercial vehicle tyres by 27 per cent.

As part of the cutbacks, production at Continental's Slovakian plant will be reduced by 20 per cent.

Continental's announcement coincided with a statement from leading German passenger carmaker and heavy vehicle manufacturer Daimler AG that it was placing another
18,000 employees on shorter working weeks as the global recession tightens its grip on Europe's biggest economy. (dpa)