Dr. Neumann to Head Restructured Conti Powertrain Division

The Powertrain Division of Continental AG is to be restructured worldwide in an attempt to make the most of its production facilities within a two-year period and address production cost issues. According to Continental this restructuring programme is the result of a thorough analysis it conducted into the division’s strengths and weaknesses.

“We offer a broad range of products and we are convinced that they hold significant market potential that we will be able to fully exploit in the near future,” commented Continental Executive Board member Dr. Karl-Thomas Neumann. “But to achieve this we have to ensure that we are properly structured. We will undertake a global restructuring programme with the aim of optimising production within a period of around two years and achieving a much better balance between high-cost and low-cost locations.

“The aim of this targeted programme is to bring our organisation, production, quality and reliability up to the same world-class level already attained by the division’s high-tech products. At the same time, our comprehensive package of measures will also ensure that we reach the earnings targets set for 2010 and that the business units acquired from Siemens VDO will deliver the level of operating margins typically seen at Continental,” Dr. Neumann continued. “We will immediately set about the systematic, step-by-step implementation of this program.”

As part of the reorganisation, Dr. Neumann has assumed operational responsibility for the Powertrain Division in addition to his duties as a member of the company’s Executive Board. He replaces Dieter Rogge at the helm of the division following Mr. Rogge’s decision to retire after more than three decades in the automotive industry.

The restructuring will combine three business units – Diesel Systems, Gasoline Systems and Electronics – into a single entity, which will also be headed by Dr. Neumann. “The new Engine Systems business unit represents our commitment to focus on the future, where the trend is clearly toward a convergence of gasoline and diesel engine technologies and the associated electronics and components,” explained Dr. Neumann.

The new division chief also indicated that a number of jobs might disappear as a result of the restructuring “At the same time we will make our organisational structure, which is currently characterised by some duplication of responsibility, significantly leaner and more efficient. The positive impact of this will become apparent very quickly,” said Dr. Neumann. However he also expressed his confidence in the division’s strengths. “We are talking about renovation work within a house that has sound foundations and a stable basic structure, not about knocking it down and rebuilding it!” he said. “Furthermore, our division has many highly innovative products with excellent future growth potential. The greater the increase in the oil price and the cost of fuel and the stricter the environmental regulations for vehicles, the better the prospects for sales of, for example, our highly efficient fuel-injection technologies, turbochargers and hybrid systems.”