America first: Continental sister company Schaeffler investing across the pond
Welt am Sonntag quotes CEO Klaus Rosenfeld as saying Europe is in danger of becoming the “loser” in Schaeffler’s production footprint redistribution (Image: Screenshot welt.de)
Major German automotive components supplier Schaeffler Group, which like tyre and automotive systems firm Continental counts the Schaeffler family’s IHO Holding as a significant shareholder, is shunning investment at home and in Europe in favour of the USA. In addition to more advantageous energy prices, Schaeffler looks approvingly upon the USA’s more pragmatic approach to climate issues.
Speaking with German newspaper Welt am Sonntag, Schaeffler chief executive officer Klaus Rosenfeld commented that although the company has no intention of relocating existing production to the USA it was “more likely” to build its next plants there. Describing these plans as a “redistribution” of Schaeffler’s production footprint, Rosenfeld said “there is a danger that Europe will be the loser.”
Rosenfeld confirmed that Schaeffler will “at any rate” use the Inflation Reduction Act of 2022 (IRA), which was signed into law last August, in order to “invest more in the USA.” The chief executive opines that the IRA will “give more momentum to the issue of sustainability in America” not just in the automotive sector but also within the industrial sectors in which Schaeffler operates. “I think it will be a significant boost to the American economy.”
As for Germany and Europe, Rosenfeld doesn’t see either as ideally positioned to find the right subsidies. “European programmes already exist. Think of the Green Deal,” he told Welt am Sonntag, adding: “The question is – what works best. The IRA is made with a lot of pragmatism. Take hydrogen as an example: In the US, the price of hydrogen is subsidised. Here we have the EU-funded IPCEI projects. We will see which will better promote the necessary innovation and technology push.”
All in the family
The Schaeffler family’s IHO Holding, which owns IHO Verwaltungs GmbH, the holding company with a controlling stake in Schaeffler Group, also has a 46.0 per cent share in Continental. The two firms are respectively the fourth and third largest German automotive suppliers after Bosch and ZF. Schaeffler currently operates ten sites in the USA, Canada and Mexico.
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