German coachbuilder Karmann GmbH says it will cut 1,250 jobs at its assembly plant in Osnabrueck this year.

Currently the plant employs 5,200 workers.

The cuts come amid slumping sales, the company and its works council says. Last year, Karmann, the largest manufacturer of convertible cars, saw sales drop 31% to €1.9 billion ($2.40 billion). The company did not disclose 2005 earnings.

Declining demand for the Chrysler Crossfire, which Karmann has built since 2003, is cited as the main reason for the sales decline. Crossfire output fell from nearly 35,700 units in 2004 to about 12,500 units last year.

DaimlerChrysler AG and Karmann are negotiating a payment to compensate for lower production of the 2-seat Crossfire sports car.

Overall, Karmann’s production dropped to 54,500 cars last year from 94,000 in 2004.