HANOVER, Germany—Continental A.G. is planning to reorganize by 2020 into a holding company with three business sectors—rubber, automotive and powertrain—with the powertrain business being set up as an independent, publicly held company.
Conti's executive board has signed off on the proposal, which now must be approved by the company's supervisory board, which includes representatives of the firm's labor unions. Conti said this move will allow it to continue to grow faster than its relevant markets and take full advantage of new potential for expansion in the key future areas of mobility.
Continental CEO Elmar Degenhart called the decision a "historic day" for Continental and said the realignment "will make us exceptionally flexible and agile."
"We are heading into the future of mobility at full speed," Degenhart said. "Our proven readiness and capacity to change give us an outstanding competitive edge which we want to use to the fullest…
"In Continental's successful values alliance for top value creation, we are growing to meet upcoming challenges, remaining competitive now and in the future. This continues to require pioneering and innovative excellence. With this alliance, we are opening up new, promising perspectives for our customers, employees, investors and all other stakeholders.
Following the reorganization, Conti will use Continental Group as its corporate identity, with the three business sectors under it.
The Tires and ContiTech divisions will retain their independent organizational structure, Conti said, and continue to specialize in the development of technology products based upon rubber and plastics.
Their financial results will be reported in under the Continental Rubber group sector. The tire business will be known going forward as "Tire Technologies."
For 2017, Conti's Rubber Group posted about $19.7 billion in sales, employing just more than 100,000. Tires accounted for $12.7 billion and ContiTech about $7 billion.
"In the next decade and after, the global automotive industry will undergo the largest and most profound transformation in its over 130-year history," Degenhart said.