Hannover-based Continental AG is a leading automotive supplier and – according to the company – is “the choice of leading car manufacturers, offering award-winning tyres that deliver responsive braking in all weather conditions.”
Continental AG reported “open” to a proposal from the Syrian-owned MAG group to buy the Clairoix plant scheduled for closure later this year. Reuters quoted a Continental spokesman as saying: “We will send a response in the course of this week.”
On Friday June 25 the four parties involved in talks over Continental’s Clairoix tyre factory in France met in Paris to sign an agreement on the course of future negotiations. Representatives from the French Government, Conti’s French and German management and employee representatives signed their names on a document based upon the preliminary agreement concluded on June 6. The signing of this agreement is, says Continental, an “important step for all the employees as this document includes the main negotiated social measures of the jobs safeguard plan” as well as the details of their implementation.
Continental Tyre Group is adding the Simex brand to its offering in the UK and Ireland. In the past, Simex tyres were exclusively marketed through the various national importers in Europe. According to the company, Simex’s premium product is backed by a strong presence in the original equipment sector.
Speaking at a Deutsche Bank conference, Continental AG chief executive, Karl Thomas Neumann has said he is ready to resign if the restructuring solution Conti and 90 per cent shareholder Schaeffler come up with is against Contienental’s best interests. According to Deutsche Bank analysts, Continental is “doing a good job in adapting the company to the current environment, especially in transferring fixed into variable costs (by approximately 50 per cent), mostly concerning labour costs.” However the analysts also point out that a lot of uncertainties remain including: the restructuring of the balance sheet specifically regarding a rights issue to reimburse a 3.5 billion euro debt which expires in August 2010; whether to acquire Schaeffler assets or not, and eventually the disposal of assets to accelerate debt reduction. Continental’s board is expected to present its solution around the end of July.
One hundred years ago, the chemist Fritz Hofmann invented the first ever synthetic rubber. After beavering away with his assistant Carl Coutelle and a research team in their employer’s laboratory in Elberfeld, western Germany, Hofmann produced the flexible substance methyl-isoprene, and in doing so laid the cornerstone for the development of a viable alternative to natural rubber. To honour this invention, Lanxess has established “World Rubber Day”, an occasion that will be celebrated for the first time on September 12, 2009.
Banks responsible for as much as half of Continental AG’s 11 billion euros ($15.5 billion) of debt are reportedly going to oppose the company’s proposed combination with 90 per cent shareholder Schaeffler Group. Citing “people familiar with the situation,” Bloomberg reported that the banks are concerned about the levels of debt necessary for the two companies to re-merge. According to the report, the banks are trying to half the move by blocking changes to a loan agreement first reached in 2007. The two companies have combined debts of around 24 billion euros.
Neither Continental, Schaeffler nor the banks involved have yet commented. However, for all the banks fears and apparent threats to de-rail what is expected to become a reverse takeover, with less than 100 days before the German general election, government support for the move (and the thousands of jobs that depend on it) have the potential to make the re-merger work. Continental executives are expected to officially reveal their plans at the end of July.
Continental Tire North America (CTNA) has appointed Oliver Winschiers, formerly director, Corporate Purchasing for its Automotive and Rubber Groups in The Americas, to the position of managing director of Continental Tire Canada. Winschiers will be based in Ontario and take on responsibility for the profitable growth and overall operation of the company’s Canadian division.
Winschiers’ career with Continental began with the Siemens VDO acquisition – he joined Siemens AG in Stuttgart, Germany in October 1997 as a regional sales manager, and progressed through a number of roles. During his time with Continental, Winschiers has also been responsible for the direct material purchasing for Continental Tire North America, including the overall operation of the Aldora Mills cord fabric plant in Barnesville, Georgia.
A new facility belonging to Continental AG subsidiary Continental Automotive (Thailand) has opened in Amata City. The 11,500 square metre factory, built with an investment of approximately five billion baht (£90.2 million), will produce powertrain diesel injectors, high pressure pumps and common rail assemblies. The production of interior electronics is also planned.
While around 70 per cent of total output will ultimately go to domestic vehicle manufacturers – the factory will start supplying the Thai market next year – the first exports to Europe, China and India are expected to get underway before the end of June.
Continental AG has reportedly opted to put payroll payments on hold for “a few days” in June to so it can honour its loan commitments. According to a report published by Bloomberg, all of Continental’s 45,000 workers in Germany as well as some in France and the US will be affected. Bloomberg quoted Continental’s headquarters as saying that Employees will receive their wages by July 3 at the latest. However, Continental Tyre Group representatives confirmed the news won’t affect UK employees.
Continental AG passenger car tyre head, Nikolai Setzer predicts that global demand for passenger car tyres will grow to 1.25 billion units in 2010 from 1.2 billion units this year, according to an interview published in German motoring magazine Auto Motor und Sport on Thursday. The total expected to rise again to 1.3 billion units in 2011. The same article quoted Guglielmo Fiocchi, head of Pirelli Tyre’s German operations, as saying he forecasts a 7 to 10 per cent decline in global demand this year.
According the interview, Fiocchi expects the market to bottom out in or before 2010, with growth return after that. Pirelli reportedly predicts annual growth of up to 6 per cent after this. Meanwhile, the German Pirelli Tyre boss said he expects the German summer tyre market to fall 7 – 8 per cent with “better development” in winter tyre business.
Dubai’s Moaffaq Al Gaddah (MAG) Group hopes, according to numerous news sources, to complete an agreement to buy Continental’s Clairoix factory in France before the end of 2009. According to Fawaz Sabri, the company’s vice president for strategy and finance, if “they (Continental) sign (the due diligence process) by the end of this month, we can start the process on July 1, and by November or December could sign a final agreement … production would be in 2010.”
Michelin’s domestic labour reorganisation program, (announced on 17 June) will save the company between 100 and 150 million euros a year, according to Deutsche Bank research analyst Gaetan Toulemonde. Restructuring charges are estimated at a maximum of 200 million euros to be accounted for in the first half of 2009 of which half will be paid for in cash and the other half as assets write offs.
In an investor’s note published today, the financial analysts explained that while the company’s complex statement appears to have been designed to avoid to much clamour after Continental and Goodyear’s recent difficult plant closures, “it looks like they aren’t doing much.” The bank’s take on the situation is that “some plants will be downsized, and the restructuring program involves 1,100 people on top of a pre-retirement program of 1,300 people. Thus, when normal attrition is included, approximately 3,000 people will leave the group by the next 18 months out of a French workforce of 25,000…of which 12,000 in production.”
Continental’s redesign of its ContiSoccerWorld.com website has been completed just in time for the opening kick-off at the FIFA Confederations Cup 2009 in South Africa. The football site that was first launched in 2005 is now online with a new layout that offers not just background reports on South Africa and the players, teams and coaches in the worldwide qualification matches, but also statistics, attractive competitions and interactive content. Conti adds that, thanks to a content cooperation with the “sid” sport information service, the site will remain up-to-date.
Former Continental AG CEO, Manfred Wennemer, is set to represent Berlin on an advisory board overseeing the trust that administers Opel, according to a Reuters report. Wennemer, who led Continental’s rearguard action against Schaeffler Group’s July 2008 hostile takeover, stepped down last August after seven years with the company when the automotive supplier managed to overcome Conti’s defences. He was subsequently nominated to join the board of steel wire manufacturer Bekaert in March 2009. According to Reuters, the trust holds 65 per cent of Opel shares and is charged with ensuring that 1.5 billion euros ($2.1 billion) in bridge financing offered by Berlin and the four German states with Opel plants is not misappropriated.
German communications agency Kienbaum Communications has awarded Continental AG a gold ‘Kienbaum Communications Award’ for its communication with job seekers. The award was given after a jury of five, made up of industrial organisational psychologists, human resource officers, communications specialists and trainees evaluated the letters on the basis of authenticity, individuality, linguistic style and their effect on the addressee.
If you would like the latest news from the Chinese tyre industry in Chinese, visit our partner site TyrepressChina.com. Or click below to continue on Tyrepress.
