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Business

Continental to Leave Russia, Cut 1,000 Jobs

Continental, the German maker of tires and car parts, plans to pull out of Russia and to cut about 1,000 jobs, CEO Manfred Wennemer said in a newspaper interview published Friday. "We have agreed with our Russian partner to withdraw from our joint venture," Wennemer told the daily Frankfurter Allgemeine Zeitung. "The withdrawal will cost us just under €30 million ($39 million)," he added. Still, Continental was sticking to its profit forecasts and expected to achieve its targeted 15 percent return on capital by the end of this year, Wennemer said. Continental set up its Russian joint venture with the Moscow Tire Plant in 2002 and holds a 76-percent stake in the unit. Originally scheduled to begin making tires in the autumn of 2003, the project has encountered a number of financial and administrative hurdles and is still not operational. Wennemer also revealed that Continental plans to cut around 1,000 jobs in its ContiTech automotive plastics division and shut down a factory in Cologne. Continental recently acquired rival car parts maker Phoenix, bringing the total number of employees at ContiTech to 24,000.

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