‘New Era’ at Conti Following Siemens VDO Purchase

Continental has wasted no time getting down to business following the completion of the company’s acquisition of the Siemens VDO Automotive unit. Day one of the “new Continental” was December 5, and Continental Executive Board chairman Manfred Wennemer travelled to Regensburg in Germany’s south, where the unit has its headquarters, to meet with the company’s newest colleagues.

“We warmly welcome the employees from the former Siemens VDO Automotive AG. By consolidating forces, we will forge our Continental into one of the world’s foremost automotive suppliers,” said Mr. Wennemer in his address to the unit’s employees, just one day after the official conclusion of the 11.4 billion euro purchase. “Following exhaustive preparation we can now tackle the integration with a flying start.

“It will take us another two to three months, however, to make a series of key decisions,” he added. “This gives us enough time to thoroughly examine data that antitrust laws have so far barred us access to. This applies in particular to information concerning sales, earnings and the number of employees by product group and plant. In the final analysis, the plans required for the operative business and especially for production will form the basis for the generation of synergy effects, paving the way for the emergence of a better and more efficient corporation from two top-notch companies as well.”

On the basis of planning to date, Continental anticipates net synergy effects in the order of at least 170 million euros as of 2010. “From what we know at the moment, we would be disappointed if it remained at this conservatively estimated sum. The amount will presumably be higher. We will be able to provide more details in the next ten weeks,” stated Wennemer.

The number of divisions under the Continental AG umbrella has increased from four to six; three of the existing divisions, Passenger and Light Truck Tires, Commercial Vehicle Tires and ContiTech, remain unchanged by this reorganisation and remain the respective responsibilities of Dr. Hans-Joachim Nikolin, Manfred Wennemer and Gerhard Lerch. The company’s old Automotive division and the Siemens VDO Automotive unit together form three new divisions:

Chassis & Safety – headed by Dr. Ralf Cramer under the Board responsibility of Dr. Neumann, this division is positioned to provide technology solutions for brake and chassis systems, the networking of active and passive safety systems, and sensors. The division has more than 27,000 employees at over 65 locations worldwide and reports more than 5 billion euros in sales.

Powertrain – this division is headed by Dieter Rogge, also under Dr. Neumann’s Board responsibility, and offers products and system solutions for powertrain, engine management, injection technology, sensors, actuators and hybrid technology. According to Conti, the division lays claim to worldwide market and technology leadership in the area of economical and eco-friendly driving. More than 27,000 people are employed by the Powertrain division at approximately 70 locations worldwide, and the division generates more than 5 billion euros in sales.

Interior – the new Interior division, headed by Helmut Matschi under the Board responsibility of Manfred Wennemer, positions itself as a worldwide market and technology leader for information management with systems that provide a link between the vehicle and the driver and passengers, between different vehicles, and between the vehicle and the infrastructure in which it operates. The division generates more than 6 billion euros in sales and employs more than 33,000 people at approximately 70 global locations. “Viewing ourselves as information managers in vehicles, we intend to optimise the flow of information,” said Mr. Wennemer regarding the division. “We will develop new functions that establish a link with the vehicle surroundings and present information in a way that motorists can grasp intuitively.

Dr. Karl-Thomas Neumann, Executive Board member in charge of corporate-wide technological development and the new Chassis & Safety and Powertrain divisions, stressed that with its expanded global operations and stronger product portfolio, the new Continental will be able to greater profit from future key auto industry trends: “Our innovative force and core competence cover precisely those automotive industry megatrends that will clearly dominate the upcoming years – safety, sustainability and Information”.

“In the Chassis & Safety division, we intend to integrate high-quality components in the area of brake systems, sensors and chassis to form a safety concept – called ContiGuard – that will make for zero crashes and injuries in the future. We are likewise well placed with respect to “zero emissions”, as envisioned for the future. We have, for instance, set standards with precise and highly efficient piezo injection systems for diesel and gas engines, as well as with hybrid drive solutions or roll-resistance-optimised tyres. In the Powertrain division we are determined to live up to our motto “Experience passion-driven mobility” by offering innovative products and system solutions that make diesel- and gas-engine vehicles more economical, reliable, powerful and eco-friendly,” said Dr. Neumann.

Continental now counts itself amongst the top five automotive suppliers worldwide and, based on 2006 figures, generates annual global sales in excess of 25 billion euros. The corporation currently employs approximately 150,000 people at nearly 200 locations in 36 countries.