The automotive supplier Continental is tightening its austerity program. According to information from the FAZ, plants in Hessen are also affected.
Dhe automotive supplier Continental is tightening its austerity course dramatically. Instead of around 500 million euros as previously planned, the group now wants to reduce costs by more than a billion euros annually – the goal is to be achieved by 2023.
In the austerity program launched by Conti just a year ago, it was said that up to 20,000 jobs around the world would be affected. There is now talk of around 30,000 jobs around the world, 13 percent of the workforce. Locations in Germany are particularly affected by the new plans. In the old “Transformation 2019-2029” structure plan, the Conti management made 7,000 jobs in the Federal Republic available last autumn. In the new program now being presented in Hanover, there is talk of around 13,000 jobs in Germany, plus “a further large part in countries with similarly high labor costs”. Conti employs around 59,000 people in Germany.
Locations in Hessen affected
Continental CEO Elmar Degenhart justified the new massive cost reductions and restructuring planned until 2029 with the ongoing crisis in the automotive industry. “It hits suppliers particularly hard,” he said. “It demands a lot from us in the short term and challenges us to the extreme for years.”
The company also announced that parts of the strategy that has now been presented will “likely lead to the relocation or closure of plants and parts of operations at locations with permanently high costs, expiring technologies or foreseeable medium to long-term uneconomical utilization of production capacities”. The plans – which have yet to be approved by the Supervisory Board – also include consolidating tasks in production and research and development “at the world’s most competitive locations”.
The group works council chairman Hasan Allak and his deputy Lorenz Pfau spoke of a “shock” when they heard of the management’s new plans to cut costs. “This is a major blow,” they said in a joint statement from the two of them. “The board of directors is adopting the familiar pattern: sales down, costs down, plants shut down, jobs cut.”
They complained that the employees were not given reliable prospects. In addition to the crisis in the industry, the trade unionists also blamed management mistakes for the tense situation at Conti – such as an excessive growth strategy, quality problems and multi-billion dollar depreciation.
According to information from the FAZ, several Continental locations will be affected in Hesse alone. Apparently, the automotive plant in Karben, which produces components for air conditioning, speedometers and driver assistance systems, is to be closed completely by 2024. Almost 1,100 people are employed there. The first positions should be eliminated as early as next year.
In Frankfurt-Rödelheim, almost 500 jobs are to be cut, which is almost a tenth of the workforce there. This is where the headquarters of the subsidiary for safety systems such as high-performance brakes is located. At the locations in Babenhausen and Schwalbach, the already planned job cuts are to be accelerated significantly. The group did not want to comment on this information. “Talks are still ongoing and confidentiality has been agreed,” said a Continental spokesman.
“This is more brutal than feared anyway,” said trade union circles about these savings plans. That is a “clear cut”. The goal is now to avoid redundancies for operational reasons, but this is hardly possible in Karben. Now it is said: “Off to the fight”. A protest action is planned for this Wednesday afternoon in Karben. The company operates another factory there, but the chemical union is responsible for it.