Schaeffler Seizes Control of Conti Board
Schaeffler Group seized control of Continental AG’s supervisory board on 24 January. The Emergency General Meeting (EGM) held at the weekend concluded with chairman Hubertus von Gruenberg stepping down, reportedly to be replaced by Rolf Koerfer, a long-term Schaeffler Group legal aid and partner at Dusseldorf- based law firm Allen & Overy. At the same time, the ball bearing maker was able to negotiate the nomination of group owners Maria-Elisabeth Schaeffler and Georg Schaeffler, not to mention company CEO Dr. Jürgen M. Geißinger to the Conti board.
This shift in the balance of power led to the supervisory board “taking note” of Conti executives’ suggestion to “initiate a process to create an organizationally and legally independent Rubber Group.” In Schaeffler’s words, to “carve out” the rubber group into a separate entity. According to the company, this process will be overseen by the current (but apparently outgoing) chairman of the supervisory board, Hubertus von Grünberg. So while von Grünberg “wants to make his chairmanship available at short notice” he will continue to be a member of the supervisory board.
In an official statement issued by Schaeffler Group the automotive supplier characterised the developments as the substantiation of the two companies’ cooperation. Former German chancellor Gerhard Schröder echoed this sentiment: “I am pleased that it was possible to bring both sides together. Around 200,000 employees around the world will now have a better feeling of certainty.”
However, while the weekend EGM may have given a clear indication of the future direction of Continental’s automotive supply wing, many questions still remain about what the new owners will do with the tyre and rubber business. While some observers suggest that the legal separation of the two businesses is simply a prelude to the sale of the rubber group, tyre sales represent a valuable source of income to the group. And bearing in mind that the newly expanded group is responsible for 22 billion euros of debt in the midst of a credit crunch, the rubber group is increasingly looking like a cash cow the board is unlikely to slaughter just yet.
According to the wording of Schaeffler’s statement – which was for the first time published identically on both its and Continental’s websites – the supervisory board has asked CEO Karl-Thomas Neumann, to “develop concepts for the cooperation between the automotive businesses of both groups.” The two automotive suppliers say they are aiming to become a Germany-based “champion” in this sector.
“I am very happy that that what belongs together can now grow together,” Maria-Elisabeth Schaeffler commented, adding: “It is my strong conviction that Schaeffler and Continental will be able to master the current economic challenges together and have a promising future.”