HANOVER, Germany—Continental A.G. CEO Elmar Degenhart plans to resign Nov. 30, citing "immediately essential preventative health care" as the reason for doing so.
"It has been a pleasure and an honor for me to have been at the helm of Continental and leading its accelerated turnaround and profitable growth," Degenhart said in a statement issued today. "After a lot of effort invested for the benefit of our organization, I was recently made aware of the importance of immediately giving precautionary measures for my health the utmost priority when it comes to planning my personal life."
Degenhart, who has served at the helm of the automotive supplier for more than decade, requested termination of his Executive Board contract, which runs through Aug. 11, 2024.
Supervisory Board Chairman Wolfgang Reitzle will convene the board as soon as possible to appoint a successor for Degenhart. The board's aim, Reitzle said, will be to create continuity for the company overall as it looks to expand and establish itself as a "pioneering technology and software mobility company" as well as tire manufacturer and automotive supplier.
Finding a successor won't be easy, Reitzle added, noting that since taking the top post at Continental Degenghart has led the company through some tumultuous times.
"When he took office in August 2009, Degenhart and his team led the company out of a situation that threatened its very existence, and brought it back into the DAX 30 Index and to an industry-wide top position," Reitzle said. "Under his leadership, Continental's debt was significantly reduced to a normal level, its equity capital strengthened and its previous high investment grade fully restored."
Degenhart's resignation comes in the midst of a company-wide restructuring plan intended to boost profitability and position the company for growth as the mobility landscape evolves toward electric and autonomous vehicles. The restructuring—at least four North American facilities, numerous German plants and other international plants will be affected—was sparked, in part, by the slowing of the automotive market and the compounded impacts from the COVID-19 pandemic.
With the plan, Continental is looking to save about $1.17 billion per year by 2023 by cutting personnel, consolidating and closing operations, and selling less profitable components of the business.
On the investment side, the company just this month announced it will put $20 million into the campus of its North and South American headquarters in South Carolina.
"I would have clearly preferred to continue working on our structural realignment, our profitable growth and viability enhancement program," Degenhart said. "And I would have loved to enjoy the future success this will bring, especially since we have just recently prepared for it by making the most difficult decisions and setting the decisive course. But in consideration of the health-related advice that I received, I am now setting other priorities."