Rebuilding Continental: Slowed Down Or Failed?

For 125 years, Continental has been in a position to feel pleased with its identity as a tyre and rubber producer until, under the Physicist von Grünberg, it was steered on to a different course. The plan, which at first sounded sensible, i.e.

to use the available human and technical resources to search for and explore technically sophisticated products, in order to present itself increasingly as a partner in development with the automotive industry. That plan suddenly changed when ITT-Teves (Bremsen Teves, from where von Grünberg had come to Continental AG), came up for sale early in the summer of 1998. Teves was acquired for about Euro 1,700 million (1998 sales Euro 1,950 million) which corresponds to 18 times EBIT.

The corporation had plunged into debt and now, analysts who had at first applauded the German Corporation’s initiative, points out Continental as an ideal take over candidate, or states that, alternatively, the corporation will collapse under its debts or can be expected to be broken up. The groundwork for this article had already been completed before Continental’s boss Kessel was dismissed. This only goes to show that any speculations about the impact the terrorists’ attacks on New York, for example, may have had on the world of Continental, are totally beside the point; the decline had begun long before that.