HANOVER, Germany (Feb. 24, 2009)—Continental A.G.'s loss of $1.6 billion in fiscal 2008 likely will be a catalyst to accelerate cooperation between Conti and Schaeffler Group, its industrial partner and largest shareholder.
“All options are being discussed” to boost synergies between the firms' automotive divisions, said Conti CEO Karl-Thomas Neumann.
Continental, burdened with a net indebtedness of $13.4 billion, is not paying out dividends for the year.
The companies have formed a joint team to move the integration process forward, but it will be a few months before they have a plan that can be implemented completely. There hasn't been a decision on whether the solution the team is discussing will entail cooperation exclusively or involve the integration of the two automotive units, Neumann said.
Neumann is emphasizing the short-term opportunities for action in purchasing and the development of technology.
For example, he sees possibilities in the joint purchase of steel. Because some of Continental's suppliers have fallen into financial difficulty, Neumann speculates there may be alternatives among Schaeffler's sources of materials and components.
One obligation stands above all these measures: to continue to reduce the debt from Continental's takeover of Siemens VDO Automotive in late 2007, Neumann said.