The recent news that Continental AG will close its Aachen, Germany tyre factory underlines the fact that it is aiming to cut 13,000 of 59,000 jobs in Germany as part of a major group-wide cost-cutting programme. Now, the German Manager Magazin is reporting that Continental is also considering the sale of parts of the wider group. Indeed, Continental is said to be in talks “already with prospective customers”. The Rubber Technologies business sector, which includes Continentals Tire and ContiTech division is also said to be affected.
Continental AG’s ContiTech division is close the 100-year-old former Goodyear plant in Bowmanville, near Durham, North Carolina, USA in mid-2016. Workers were told the news on 13 November 2015. The Bowmanville plant makes conveyor belts for mining, coal and tar sands operations and has reportedly been hit by slowing demand from the global mining industry.
ContiTech specialist compounder Phoenix Compounding Technology will exhibit its latest developments and showcasing its international locations at Booth 213, Hall 12 at the Deutsche Kautschuk-Tagung 2015 (DKT; German Rubber Conference) in Nuremberg from 29 June to 2 July, 2015. The focal point of its trade showcase is compounds in various delivery forms, which all meet the current requirements of the REACH regulation. More of ContiTech’s technologies will be unveiled during the lecture programme.
However, while the company had also hoped to secure approval from Brazilian authorities this year, this part has not yet been completed. Due to Christmas holidays all round any decision is now likely to be made in 2015. Nevertheless Veyance representatives said “they are confident that we will secure the approval from the Brazilian authority and close very soon thereafter”.
It was decided at yesterday’s meeting of Continental AG’s Supervisory Board that, as of 1 May 2015, Hans-Jürgen Duensing will join the company’s Executive Board and simultaneously take charge of the ContiTech division. He will take over from Heinz-Gerhard Wente, who has requested the termination of his contract on 30 April, thus ending a career with Continental spanning more than forty years.
Continental aims to place workshop services centre state at the upcoming Automechanika show in Germany and demonstrate that, now more than ever, the company embodies the formula that “top-quality products + A to Z service = success for workshops.” Amongst the products Continental will present in Frankfurt am Main between 16 and 20 September are tyre pressure monitoring sensors, belt drive components, air springs and diagnostic devices. The company also promises a number of new additions to its product portfolio.
Sales at Continental’s ContiTech division are expected to increase five per cent year-on-year in 2014, but the plan for the coming decade is for much larger growth. In an interview with German financial daily Handelsblatt, division head and ContiTech AG Executive Board chairman Heinz-Gerhard Wente shared on expansion plans for the newly-enlarged ContiTech: “The goal within the next ten years is to again double the turnover of ContiTech, including Veyance. This is by no means utopian.” This means turnover of around €11 billion.
Continental has concluded an agreement with equity firm The Carlyle Group to purchase Veyance Technologies Inc for roughly 1.4 billion euros. Veyance operates globally in the field of rubber and plastics technology and in 2013 recorded sales of approximately 1.5 billion Euro, around 90 per cent of which were achieved outside the automotive industry. Veyance has 27 plants around the world and a workforce of about 9,000 employees at the end of 2013. The Carlyle Group announced it had bought what was formerly Goodyear’s Engineered Products division for US$1.475 billion on 23 March 2007.
Participants at today’s meeting of Continental AG’s Supervisory Board have agreed to extend the contract of Executive Board member Heinz-Gerhard Wente until 30 April 2015. The 62-year old has been responsible for ContiTech division since October 2008 and for Corporate Purchasing since 1 August 2011. He was first appointed to Continental’s Executive Board on 3 May 2007.
Continental has been in business for 142 years, and since 1882 the company has utilised the ‘prancing horse’ in its logo. This year, Conti’s logo and corporate image has been given the once-over in order to, as the company puts it, underline its change over the years from being a pure tyre maker to becoming one of the world's largest system suppliers for automotive technologies. The horse still features prominently in Continental’s new logo – the company says it now holds a more natural and dynamic position – and it is joined by a new slogan: Continental, the future in motion. This is written in a new font, although the uninitiated may be hard pressed to spot the difference between the new and old.
“Our technological solutions are helping people to enrich the quality of their life through mobility and to structure their living space in a sustainable manner,” explains Continental’s chief executive officer Dr. Elmar Degenhart. “We create fascinating solutions and products for volume production in reliable, first-class quality and faster than our competitors. Our brand symbolises this goal and is the promise to our stake-holders by which we measure ourselves on a daily basis.”
Continental AG has appointed Elke Strathmann its new director of Personnel and appointed her a regular member of the company’s Executive Board. The tyre and automotive supplier says the 53-year old mathematician and human resources manager will take up her three-year contract position during the first quarter of 2012. Current Executive Board member for human resources, Heinz-Gerhard Wente, will henceforth concentrate on his duties as head of the ContiTech division plus take on responsibility for corporate purchasing in the Executive Board.
ContiTech, Continental’s rubber and plastics technology division, has further expanded its global activities in the mining and raw materials industry through its Conveyor Belt Group’s acquisition of Australian trade company M.I.R.S. (Mining Industrial Resource Supplies). The agreement to purchase the Perth-based company was made on July 12 and backdated to July 1, 2011. Both sides have agreed not to disclose the purchase price.
Matthias Schönberg, who has served as chief executive officer of Continental Tire the Americas since October 2006, is soon to leave the company’s American operation to assume management of the ContiTech Fluid Technology business unit on July 1. Schönberg will take over this Germany-based position from incumbent Hannes Friederichsen, who as of October 1 will take on management of the Air Spring Systems business unit; current manager Dr. Thomas Johannsen, who is credited for transforming the Air Spring Systems business unit from an air spring manufacturer located in Hanover, Germany into an international supplier of air spring systems with plants in six countries, has announced his impeding retirement. Mr. Schönberg's replacement has yet to be named.
Contitech has opened a new production facility in Ponta Grossa, Brazil, for textile and steel-cord conveyor belts, creating a stronger foundation for the company’s activities in the Central and South American region. The new 5,000m2 facility is designed to produce 300km of textile and steel-cord conveyor belting annually and has created over 60 new jobs. The total amount invested so far by ContiTech in the factory, machinery and equipment amounts to more than 10 million euros.
Analysts have reported that Continental’s first quarter financial results (released last week) show a “100 per cent increase in numbers.” This means that, in Morgan Stanley’s view, the company’s net debt is now “under control at 8.2 billion euros,” approximately 200 million better than they expected.
“Excluding the 1.1 billion capital increase during last quarter, the net financial position deteriorated by 413m in the first quarter 2010, which was largely expected due to seasonality of working capital,” the analysts explained in an investor’s note dated 4 May, adding: “[Capital expenditure was unsustainably low, however, decreasing by 62 million euros year-on-year and represented just 63% of depreciation and amortization and 3 per cent of sales.”