Skip to main content
Sister Publication Links
  • European Rubber Journal
  • Plastics News
  • Tire Business
web
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • Automotive
    • Tire
    • Non-Tire
    • Suppliers
    • Silicone
    • Latex
    • Coronavirus
    • Executive Action
    • Government/Legal
    • Opinion
    • Technical Notebooks
    • Women in Tire & Rubber
    • ITEC
    • International Elastomer Show
    • HEXPOL Sponsored Content
    • Goodyear's global footprint would get strategic boost with Cooper Tire deal
      Goodyear-Cooper Tire deal 'a transactional milestone'
      Cooper recalling 430,000+ whitewall LT tires in multiple brands
      Yokohama sets ambitious goals through 2023
    • Goodyear's global footprint would get strategic boost with Cooper Tire deal
      Goodyear-Cooper Tire deal 'a transactional milestone'
      9 Goodyear-Cooper Tire stories you may have missed
      Cooper recalling 430,000+ whitewall LT tires in multiple brands
    • USTMA, NAM among associations backing passage of Equality Act
      ASC seeks presenters for fall convention
      Birla Carbon again recognized for sustainability efforts
      Carlisle TyrFil out with new recycling technology
    • Zeon receives pair of ISO certifications
      Trinseo taps K.D. Feddersen to supply soft-touch elastomers
      New products: MonTech offering customized bale cutters
      Synthomer dismisses takeover reports
    • Stockwell Elastomerics' legacy moves on
      Larger mixers tout economies of scale, along with the need for speed
      Hexpol, Bloom deal with COVID, reorganization, fire since start of 2020
      Small, mid-size compounders keep value, agility, service 'in the mix'
    • Ohio firm focuses on making better masks in U.S.
      U.S. to increase NBR, make gloves using Defense Production Act
      Tire Cologne canceled; rescheduled for 2022
      Tire Technology Expo canceled for 2021
    • 9 Goodyear-Cooper Tire stories you may have missed
      Goodyear promotes Chris Helsel, expanding his global technology, operational role
      Stockwell Elastomerics' legacy moves on
      Dana Inc. hires Byron Foster in executive role
    • 9 Goodyear-Cooper Tire stories you may have missed
      Cooper recalling 430,000+ whitewall LT tires in multiple brands
      USTMA, NAM among associations backing passage of Equality Act
      Conti recalling 94,000 LT/SUV tires
    • Column: Discussions of race, equality may mean uncomfortable moments
      Column: Business trips possible because of essential workers
      Editorial: Associations see opportunity for progress under new administration
      Editorial: Against a backdrop of turmoil, M&A deals give glimpse of normalcy
    • Studying RPA ASTM methods for detecting compound quality differences
      Damage mechanism in oil and gas formulations during downhole testing
      Advancements in synchronous drive belt design for industrial and consumer markets
      Effects of multiple repurposed materials for reinforcements of standard rubber compounds
    • Rubber Division introduces WORD webinar series
      WORD panelists say evolution, authenticity keys to success
      New video celebrates women in rubber industry
      ITEC panelists say women can thrive in tire industry
    • Goodyear recognized by Lockheed Martin as 'elite supplier'
      EV tire advancements to help secure future
      Lambillotte: Only question on AVs is timing
      CAR official says EV future brighter than autonomous
    • Rubber Division introduces WORD webinar series
      Rubber Division seeks abstracts for 200th Technical Meeting
      WORD panelists say evolution, authenticity keys to success
      IEC keynote: Communication key to logistics
    • Sponsored By HEXPOL Compounding
      Faster Access to Your Polymer Compounding Experts Around the World
      Sponsored By HEXPOL Compounding
      Take a walk thru a HEXPOL Lab
      Sponsored By HEXPOL Compounding
      HEXPOL offers a unique selection of High Performance Elastomers to match your application requirements
      Sponsored By HEXPOL Compounding
      It’s what you can’t see that makes the Difference at HEXPOL
  • Blogs
    • Products
    • Wacky World of Rubber
    • New Products: Starrett expands field-of-view for multi-sensor vision system
      New Products: Nova thinks outside the box with sealing tech
      New Products: MonTech introduces 1,500 kN lab press
      New products: 3M introduces new durable, pliable medical adhesive
    • Wacky World of Rubber: How Trelleborg, teens sealed a spot in the world record book
      Wacky World of Rubber: Of chicken and feet, but not chicken feet
      Wacky World of Rubber: Time to go mattress shopping
      Wacky World of Rubber: Because nothing says football like 'frunk' shrimp
  • Newsletters
    • Rubber in Automotive
    • Silicone News
    • Latex News
    • Sign Up for Newsletters
    • Goodyear's global footprint would get strategic boost with Cooper Tire deal
      Goodyear-Cooper Tire deal 'a transactional milestone'
      Cooper recalling 430,000+ whitewall LT tires in multiple brands
      Yokohama sets ambitious goals through 2023
    • Stockwell Elastomerics' legacy moves on
      Larger mixers tout economies of scale, along with the need for speed
      Hexpol, Bloom deal with COVID, reorganization, fire since start of 2020
      Small, mid-size compounders keep value, agility, service 'in the mix'
    • Sri Trang Gloves starts major capacity expansion
      Synthomer dismisses takeover reports
      Combined Goodyear-Cooper Tire company has tire tech, sustainability edge
      Helixtap launches new digital marketplace for rubber
  • Multimedia
    • Videos
    • Photo Galleries
  • Directory
  • Resources
    • Classifieds & Mold Mart
    • Sponsored Content
    • White Papers
    • Sponsored By HB Chemical
      Above and Beyond with HB Chemical
      Sponsored By HB Chemical
      The Company Behind the Inventory
      Sponsored By French Oil Mill Machinery
      Process Improvement, Cost Reduction with Custom Press Systems
      Sponsored By HB Chemical
      Above and Beyond with HB Chemical
    • Sponsored By Uncountable Inc.
      Labs of the Future: How to Choose a Laboratory Information Management System in 2021
      Sponsored By Uncountable Inc.
      Cooper Standard deploys lab informatics platform to synchronize R&D
      Sponsored By Elkem
      LSR Selectâ„¢: A solution to improve your financial impact in molding applications
      Sponsored By HEXPOL Compounding
      Peroxide Cureable Silicone Injection Molding
  • Data
  • Events
    • RPN Events
    • RPN Livestreams/Webinars
    • Industry Events
    • Past Events
    • ITEC Library
    • International Silicone Conference Library
    • 2021 Healthcare Elastomers Virtual Edition
      2021 Rubber in Automotive Virtual Edition
      2021 International Latex Conference Virtual Edition
      2022 ITEC
  • Advertise
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. Tire
December 17, 2020 10:04 AM

Year in Review: Conti restructures with eye toward e-mobility

Andrew Schunk
Rubber & Plastics News Staff
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Marcus Prell
    Thousands of employees at Continental sites in North America will be impacted by the auto supplier’s global restructuring effort.

    HANOVER, Germany—When Continental A.G. began its restructuring overhaul in 2019, a plan that was to take 10 years and be conducted in phases, it was with an eye toward a sustainable, environmentally friendly e-mobility market—one with assisted, automated, connected and zero-emission driving, and a continued focus on tire, industrial and end-customer businesses.

    But when the coronavirus pandemic and subsequent decline of the automotive industry hit suddenly in the first and second quarters of 2020, Continental was forced to rethink its massive restructuring program once again, this time to align with the unexpected estimate that it would be at least five years before the automotive industry recovers.

    Pushed by the pandemic beginning in February, the 232,000-employee company said in late September that its plans will affect thousands of jobs in North America and at least 30,000 jobs worldwide.

    At least four North American facilities, numerous German plants and other international plants have been or will be shuttered, a plan that is expected to save about $1.17 billion per year by 2023, according to Continental. Toward the beginning of 2020, the company initially said the overhaul would affect 20,000 jobs globally and save the company more than $580 million per year.

    Continental is training its work force for next-generation manufacturing.

    "The current crisis is the largest, most severe one we have seen in the past 70 years," Elmar Degenhart, Continental's CEO at the time, said in September. Degenhart stepped down from the top post at the tire maker in November due to health reasons.

    "So the aim of our plan is now to prepare for our sustainable success and to ensure the future viability of our organization," he said. "As important as these resolutions are for our future, the consequences can be just as painful for the employees affected."

    The Supervisory Board of Continental A.G. approved the newest restructuring plan Sept. 30, adding a German tire plant in Aachen (to be shuttered in 2021) to the list of affected facilities, and disclosing that it would terminate a joint venture with Osram Licht A.G., signed in 2018 for LED and laser-based lighting modules, sensor solutions and associated electronics.

    Conti said in September that it does not expect the passenger car tire market to grow in the foreseeable future—a market change that has been exacerbated by the coronavirus pandemic.

    In North America, thousands of jobs will be affected by Conti's restructuring, between the initial, non-pandemic related restructuring disclosed in September 2019 with the closure of a hydraulic engine component facility in Newport News, Va., (740 employees) and a hydraulic brake component plant in Henderson County, N.C. (650 employees).

    On Sept. 1, 2020, Conti said it would close a Vehicle Dynamics plant in Culpeper, Va. (200 employees), after saying in July 2020 that it would close an infotainment system and automotive electronics plant in Nogales, Mexico (2,000 employees).

    While some of those "affected employees" will be laid off, others could be shifted to other facilities or re-trained for future technologies and locations, Conti said this year. The auto supplier added that the plan does not take into account the number of jobs that will be created in the coming years, such as those related to the projected growth in mobility, though the number of jobs that could be added in the coming years has not been disclosed.

    The Nogales and Culpeper locations will close sometime in 2024. The Henderson County and Newport News locations, the latter of which is part of Conti's former powertrain division, a carve-out soon to be known as Vetesco, also will close in 2024.

    Continental's headquarters in Fort Mill, S.C.

    Not all doom and gloom

    On the expansion side, earlier this year Continental detailed plans to build a new manufacturing site in New Braunfels, Texas, to produce Advance Driver Assistance Systems—part of its focus on innovation and the opportunities available with the dawn of AI and EVs.

    The greenfield facility will retain approximately 450 jobs in Texas and create an additional 130, Conti said this summer.

    Continental Tire the Americas, citing the continuous growth of its executive staff, disclosed a $20 million investment in its Lancaster County headquarters in South Carolina for an office building for up to 400 employees.

    At 88,000 square feet, the new structure will nearly double the amount of office space for Conti at the South Carolina campus.

    In addition, the company is automating its processes, with the implementation of Industry 4.0 training for its global work force. Training will be offered in digitalization, plastics and rubber technology, additive manufacturing, 3D printing technologies and new drive concepts.

    "The automotive industry is changing and development cycles are getting shorter," Conti said in late July.

    As such, Continental established its own supercomputer for AI in late July of this year. It is operating from a data center in Frankfurt and offering computing power as well as storage to developers in locations worldwide.

    AI enhances advanced driver assistance systems and makes mobility smarter and safer, bringing autonomous driving within reach of mid-term business plans.

    And in early July, two major automotive OEMs made their bid to work with Continental for the production of innovative telematics and antenna solutions. Both projects build on Conti's 5G Hybrid V2X platform.

    As it pertains to the ongoing restructuring, the focus on e-mobility will impact four Continental locations:

    • The Roding, Germany, site that employs about 540 people in the production of hydraulic components for gasoline and diesel engines (high-pressure pumps). Closure is set for 2024, with about 320 production jobs to be affected. About 220 jobs will be transferred to "similar functional areas;"

    • The Limbach-Oberfrohna, Germany, location, which employs about 940 people in the production of hydraulic injectors for gasoline engines. Closure is set for between 2023 and 2028, with 860 of those jobs to be affected. About 370 jobs will be transferred to similar areas;

    • The facility in Pisa, Italy, which employs about 940 people in the production of hydraulic injectors for gasoline engines. Closure is set for between 2023 and 2028, with 500 of those jobs to be affected. About 440 jobs will be transferred to similar areas; and

    • In North America, the Newport News facility, which employs about 740 people in the production of hydraulic injectors for gasoline engines. This closure was detailed pre-pandemic, in the second quarter of 2019.

    In addition to the welcome news regarding e-mobility contracts, cooperatives and industry training, Conti did see an uptick for its third quarter earnings in 2020.

    Its tire business reported relatively strong results for the quarter ending Sept. 30, with pre-tax operating income up nearly 18 percent on nearly flat sales driven by strong performances in China and the U.S.

    Europe remained the lagging region, down 8 percent, with the key German and French markets down by 16 percent and 23 percent, respectively, according to the company.

    Conti said OE sales of consumer tires were "significantly" below the comparable 2019 period, while replacement market sales of both consumer and commercial vehicle tires were below 2019 levels.

    Conti received some validation for its tire segment in late June, being named a GM Supplier of the Year by General Motors during a virtual ceremony June 24.

    CEO Nikolai Setzer and Elmar Degenhart

    Degenhart steps down

    A surprising change in Continental A.G.'s top post was disclosed in early October, when Degenhart said he would step down as CEO due to health reasons.

    The supervisory board of Continental A.G. appointed Nikolai Setzer, 49, head of the firm's tire business from 2011 to 2019, to succeed Degenhart, who officially stepped down Nov. 30.

    "Continental is in the process of transforming into a technology and software company that, together with vehicle manufacturers, is laying the foundation for the sustainable mobility of the future," said Wolfgang Reitzle, chairman of Conti's Supervisory Board. "Nikolai Setzer has our utmost trust and confidence. The Supervisory Board is certain that he will push forward with and successfully shape this transformation."

    Setzer's term runs through March 2024. He will continue in his position as spokesman of the Automotive Board, Conti said.

    Christian Koetz, a 24-year Conti veteran, heads up the firm's tire division as Setzer's successor.

    Related Article
    Conti looks for continued growth with Vision 2030 blueprint
    Nikolai Setzer named Continental CEO
    S.C. headquarters expansion gives Conti room to grow
    Continental's recovery plan affects thousands, saves $1.17 billion
    Letter
    to the
    Editor

    Rubber & Plastics News wants to hear from its readers. If you want to express your opinion on a story or issue, email your letter to Editor Bruce Meyer at [email protected].

    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Rubber & Plastics News delivered straight to your inbox, free of charge.

    Subscribe Today

    Subscribe to Rubber & Plastics News to get the best coverage and leading insights in the industry.

    SUBSCRIBE
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter

    MISSION

    To serve companies in the global rubber product industry by delivering news, industry insights, opinions and technical information.

    web
    Contact Us

    2291 Riverfront Pkwy, Suite 1000
    Cuyahoga Falls,
    OH 44221

    Customer Service:
    877-320-1726

    Resources
    • About Us
    • Digital Edition
    • Contact the Staff
    • Advertise
    • Order Reprints
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Careers
    • Ad Choices Ad Choices
    • Sitemap
    Partner Sites
    • Tire Business
    • European Rubber Journal
    • Plastics News
    • Plastics News China
    • Urethanes Technology
    • Automotive News
    • Crain Brands
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • Automotive
      • Tire
      • Non-Tire
      • Suppliers
      • Silicone
      • Latex
      • Coronavirus
      • Executive Action
      • Government/Legal
      • Opinion
      • Technical Notebooks
      • Women in Tire & Rubber
      • ITEC
      • International Elastomer Show
      • HEXPOL Sponsored Content
    • Blogs
      • Products
      • Wacky World of Rubber
    • Newsletters
      • Rubber in Automotive
      • Silicone News
      • Latex News
      • Sign Up for Newsletters
    • Multimedia
      • Videos
      • Photo Galleries
    • Directory
    • Resources
      • Classifieds & Mold Mart
      • Sponsored Content
      • White Papers
    • Data
    • Events
      • RPN Events
      • RPN Livestreams/Webinars
      • Industry Events
      • Past Events
      • ITEC Library
      • International Silicone Conference Library
    • Advertise
    • DIGITAL EDITION