Nearly three decades ago, Continental A.G. of Germany came in and made a blockbuster deal to purchase General Tire, one of the historic names of the Akron tire and rubber industry. It was looking for a foothold in the North American tire business.
The deal wasn't all that different from earlier this year, when Continental completed its acquisition of Veyance Technologies, which did business as Goodyear Engineered Products, also a longstanding name in Akron. This time Conti, through its ContiTech business, was looking to boost its non-tire rubber product presence in North America.
But the similarities in how Continental has handled the two acquisitions end there.
When the German firm bought General Tire in 1987, it struggled for years to make it a success. It fired its popular U.S. president a little more than two years after the purchase, and it went through a total of four presidents for the U.S. subsidiary within 10 years, changing back and forth between U.S. and German leaders.
Conti also found that General Tire's plants in the U.S. and Canada were old and outdated, and the German executives had difficulty understanding the dynamics of the U.S. market. One leader even angered employees when he used the term “creative destruction” to describe why cuts and layoffs were needed at General.
Eventually all but one of General Tire's factories were closed or sold, and the company moved from Akron. Only in recent years—boasting new and updated facilities in North America—has Continental finally found success in the region.
Fast forward to 2015, and there is a much different story. From all indications, the transition continues to go smoothly, and the Veyance business didn't miss a beat as it merged into ContiTech.
Jim Hill, a 27-year veteran of Goodyear and Veyance, is the CEO for ContiTech's NAFTA region, helping to give workers at its Akron-area headquarters a sense of stability.
One executive called Continental officials “cordial and inclusive” as they went about the task of putting two multi-billion-dollar businesses together. Their message was simple: trust and support each other; keep your passion for the business; and use the freedom to act when and opportunity arises.
Same company. Different generation. Entirely different outlook.