Continental expands business structural optimization program

German company Continental is expanding its structural optimization program for 2019-2029 and is announcing further measures to reduce costs and increase efficiency. Conti's goal is to achieve annual savings of over €1 billion from 2023 onward, an increase of around €500 million over previously announced targets.

In general, according to Continental estimates, the restructuring around the world will somehow affect more than 30 thousand workplaces of the company, about 13 thousand of which are in Germany, and a significant part - in countries with high wages.

Today, Continental employs more than 232 thousand people worldwide, including approximately 59 thousand in Germany.

Conti originally announced the optimization measures in September 2019. It was then planned that they would affect 20,000 jobs worldwide, including about 7,000 in Germany.

All core functions and business units will now operate within a strategy that includes "consolidating production and research and development tasks in the most competitive regions of the world, as well as adjusting the portfolio." In addition, Continental is committed to increasing production automation and business agility, as well as reducing labor costs and plans to get rid of unprofitable business operations.

The strengthening of the restructuring process reflects "persistently low levels of global car production, as well as the deepening economic crisis caused by the coronavirus pandemic." In addition, Continental executives do not expect car production to return to pre-crisis levels until 2025, which will directly influence tire production volumes. “The entire automotive industry is currently facing huge challenges. The industry has not experienced a more severe crisis over the past 70 years, ”said Continental Chief Executive Officer Dr. Elmar Degenhart, adding that the crisis hit suppliers particularly hard.

The tire company's action, Degenhart said, will provide "enough room and vital resources to return to fast, profitable and sustainable growth using the technologies of the future."