HANOVER, Germany—Continental A.G. has initiated reduced working hours across all its operations in Germany, and is looking to implement similar measures elsewhere.
About 30,000 employees, which represent roughly half of the group's global workforce, have been registered for short-time work as of April 1. It's part of a plan that Continental said could last six to 12 month.
The measures cover all corporate functions from production and R&D through to administration, affecting employees at Continental's headquarters in Hanover, according to an April 1 statement.
In China, Continental gradually has been resuming production since Feb. 10.
Overall, more than 40 percent of Continental's 249 production locations worldwide temporarily have ceased activities for periods ranging from a few days to several weeks. These cutbacks mainly affect Continental's locations in Europe as well as in North and South America. Certain production lines will continue to remain in operation at locations around the world so that the group can fulfill its delivery obligations.
Additionally, ContiTech's products for essential industries, such as hoses for medical applications and products for the water and food industries, still will be manufactured "in many plants."
"We are cutting our costs, optimizing our working capital and postponing projects and investments that are not urgently required until further notice," CEO Elmar Degenhart said in a statement.
Continental also withdrew its 2020 financial outlook due to the uncertainties surrounding the duration of COVID-19 pandemic and its effects on production, the supply chain and demand.
In its March 5 outlook, the group had anticipated consolidated sales for the current year of around $46.4 billion to $48.5 billion and an adjusted EBIT margin of around 5.5 percent to 6.5 percent.
The group's Rubber Technologies segment, which includes tire division and ContiTech, was estimated to be around $18.5 billion to $19.6 billion sales and adjusted EBIT margin of around 10 percent to 11 percent.