When an auto supplier like Continental sweeps across its office corridors with a major savings plan and calls this project “Accelerate”, then that is pretty ambiguous. Because what needs to be accelerated here, for once, is not cars, but rather the company’s key business indicators, especially profitability and profit margins. With accelerated job cuts leading to faster profits, so to speak.
“Accelerate”, that sounds a bit like unintentional irony.
The Conti board of directors under its boss Nikolai Setzer has been working on the savings program for some time, and now it has leaked out: The automotive supplier wants to cut around 5,500 jobs worldwide in its automotive business in the next few years, of which 1,000 jobs will be lost in Germany alone, where the The group maintains around 30 locations. Further details of the restructuring plan, which was first reported on Manager Magazine had reported, are to be presented to employees and the public at an international webcast this Monday. Insider circles report that the job cuts should be carried out in a “socially acceptable” manner. So: no redundancies for operational reasons.
We hear from company circles that the restructuring plan has no impact on production and the group’s central tire manufacturing, nor on the technical development departments. Savings should primarily be made in the administration of the automotive business – where the greatest savings opportunities can be seen, without this having any consequences for the group’s products and technologies. The strategy of thinning out the administration is intended to bring in millions; We are talking about annual savings of 400 million euros in the coming years.
Conti boss Nikolai Setzer: He wants to make the automotive supply business more profitable – and is now planning to cut jobs worldwide.
(Photo: Michael Matthey/dpa)
The company from Hanover was reserved this Sunday – and answered in general terms. “Further measures to strengthen the competitiveness of the Automotive division are being examined,” said a spokesman. Did these measures also mean major job cuts? They include “possible changes in administrative structures in order to enable faster and more agile decisions in the future and to reduce the burden on costs,” according to the company. Relieve the burden on costs – in business this is often a somewhat more flexible way of describing saving and cutting jobs.
Continental currently has a total of around 200,000 employees worldwide. About half of them work in the ailing automotive division, where the classic supply business such as the sale of electronic components to car manufacturers such as VW, BMW or Mercedes is located. The other half is involved, among other things, in the classic production of tires for the end customer business. There is also the Contitech division, which also houses the special car business with products such as belts and sealing systems, which could be sold in the near future.
Auto suppliers like Continental are under considerable pressure in these times. The change from combustion engines to electric cars is making many traditional business areas superfluous; new ones must first be developed. A lot of things come together: the costs of materials are rising, plus inflation and wage increases are a burden. The supplier’s problem: They actually have to impose massive price increases on their customers, the car manufacturers. In any case, suppliers have not had much negotiating power here in recent decades. This is likely to become even more difficult in the future: European car manufacturers are coming under increasing pressure from their Chinese rivals on the world markets, especially with the transition to electric cars. A pressure that is passed on downwards by the manufacturers – to where the auto suppliers are.