FAIRLAWN, Ohio—Continental A.G.'s strategy with its businesses is to build its operations and create value, not cut back and close plants.
That was the message Heinz-Gerhard Wente, a member of the executive board of Continental and CEO of its ContiTech A.G. division, passed on to employees of Veyance Technologies Inc., which Continental said it plans to acquire for $1.91 billion after it receives approval from antitrust authorities. The announcement was made Feb. 10.
Wente told employees at the Fairlawn facility, where Veyance is headquartered, that it wants to acquire Veyance because it is profitable and on a growth course.
"For growth you need production sites," he said. "So closing plants does not fit into our strategy. Fundamentally, the ongoing optimization of production and logistics operations is part of our everyday business at Continental/ContiTech."
Continental also uses the expansion of relevant plants and investments in them as a means of achieving optimization, he said.
The Continental and ContiTech executive said current plans call for Continental to retain Veyance's work force of about 9,000 "because the business acquired is a suitable complement to our own existing business. For that reason, the priority is growth rather than consolidation."
Veyance will be integrated into the ContiTech division, which will expand the operation's position in rubber and plastics technologies on a global basis, said Elmar Degenhart, chairman of Continental's executive board in Hanover, in a prepared statement.
Once the deal is closed, Wente said, ContiTech only will be able to use the Goodyear brand name that Veyance used for a limited time. But that won't be a problem, he said, because both Continental and ContiTech, as corporate and product brands, are well known by customers in relevant markets.