What follows is a portion of the lengthy, major announcement released by Continental outlining the company’s restructuring to remain compeitive as the auto industry changes. The program(s) include major investment, plant closures (including on in Henderson, N.C.and one in Newport News, Va.), employee training programs, withdrawal from certain segments and increased presence in others. The entire document can be found by clicking on this sentence.
Hanover, Germany – At the meeting of the Supervisory Board of Continental AG on September 25, 2019, its members and the Executive Board discussed Continental’s Strategy 2030 and the Transformation 2019–2029 structural program.
The global program, which the company’s management announced at the end of July 2019, will serve to strengthen the company’s competitiveness over the long term and ensure its viability. Continental is thus responding to the decline in global automotive production and the increase in customer demand for digital solutions.
The program also takes into account multiple parallel developments: an increasingly digitalized working environment, the emerging crisis in the automotive industry and the accelerated change in powertrain technology due to more stringent emissions legislation.
The Transformation 2019–2029 structural program has two main aims: to increase efficiency and productivity through adjustments to the organization and portfolio, and a greater focus on key growth areas of the future. As such, Continental plans to reduce its gross costs by about €500 million annually from 2023.
The company expects the program to cost around €1.1 billion over its 10-year term. These costs will mostly be incurred between 2019 and 2022. Continental does not rule out additional projects if thRe current program does not achieve the desired impact.
Worldwide by 2029: changes in up to 20,000 jobs and simultaneous creation of new jobs
According to a preliminary analysis, up to 20,000 of more than 244,000 jobs worldwide are expected to be affected by changes under the structural program over the next 10 years, including about7,000 of more than 62,000 in Germany. By the end of 2023, around 15,000 jobs are expected to be affected, including about 5,000 in Germany. At the same time, the software-based portfolio will be expanded. A large number of jobs will be created in this sector and in key growth areas in the coming years.
The transformation will have various effects on the affected jobs. These include job cuts due to a number of reasons such as lower business volumes as a result of weaker markets and the discontinuation of operating activities.
Changes will also arise from the possible sale of parts of the business and (sub)segments to external parties, as well as from the transfer of jobs to other Continental locations in order to ensure market proximity and/or enhanced competitiveness.
Other changes will arise from the transfer of jobs to future technologies such as electric mobility.
Finally, changes will also result from the declining number of traditional tasks and activities due to the transition to a digital working world and the structural alignment with the requirements of Industry 4.0.