Inside sources recently told reporters that Schaeffler Group is considering unravelling its hostile takeover of Continental AG – offering itself up for reverse takeover by Conti. The automotive parts takeover-predator now finds itself pushed into the role of prey as it struggles to manage debts of 11 billion euros. As a result of the potential corporate role reversal, Continental could find itself well and truly back in the driving seat – but will the company be able to execute this move and at the same time exercise some poetic justice?

There is no question that Schaeffler desperately needs to save money. In the first quarter of 2009, the company’s Automotive division recorded a downturn of 33 per cent compared to the previous year, which is now said to have “stabilized” at 25 per cent below last year, while its Industrial division is down around 40 per cent. However, lost sales don’t just mean reduced income. With output not expected to return to 2008 levels for another four years, the company has announced that it has to cut German labour costs by 250 million euros (the equivalent of 4500 jobs). Schaeffler has already cut 5,000 jobs in other countries, but redundancies at home make the automotive supplier very unpopular with the only people who are now realistically likely to help – the state and federal governments.