Continental AG

Continental AG
Publicly traded company
Traded as FWB: CON
OTC Pink: CTTAY
Industry Automotive
Founded 1871
Headquarters Hanover, Germany
Key people
 Elmar Degenhart, CEO
Wolfgang Reitzle, Chairman
Products Tires, brake systems, powertrain and chassis components, automotive safety, vehicle electronics[1]
Revenue

€34.5 billion (2014)[2] Decrease

€32.7 billion (2012)[3]
€3.073 billion (2012)[3]
Profit c. €1.9 billion (2012)[3]
Total equity €7.543 billion (end 2011)[3]
Number of employees
 c. 190,000 (end 2014)[4]
Website conti-online.com

Continental AG, commonly known as Continental, is a leading German automotive manufacturing company specializing in tires, brake systems, automotive safety, powertrain and chassis components, tachographs, and other parts for the automotive and transportation industries. Continental is based in Hanover, Lower Saxony, Germany. Continental is the world's 4th largest tire manufacturer.[5] Continental was founded in 1871 as a rubber manufacturer, Continental-Caoutchouc und Gutta-Percha Compagnie.[6] After acquiring Siemens AG's VDO automotive unit in 2007[7] Continental was ranked fourth in global OEM automotive parts sales in 2009 according to a study sponsored by Ernst & Young LLP.[8]

In 2008, Continental appeared overextended with its integration of VDO and had since lost almost half of its market capitalization when it found itself to be the takeover target of the family-owned Schaeffler AG.[9] By 2009 Schaeffler successfully installed the head of its motor division at the helm of Continental.[10]

On 6 September 2012, Continental returned to the benchmark DAX index of 30 selected German blue chip stocks after a 45-month absence.[11] Schaeffler AG is the controlling shareholder and currently owns 49.9% of Continental shares.[12]

Overview

Continental AG global locations.
Continental tires on a Mercedes-Benz SLS AMG

Continental is structured in five divisions:

One of Continental's main areas of expertise and technological leadership is Fuel Consumption Reduction, achieved through more efficient fuel injection systems, reduced rolling resistance tires and hybrid propulsion systems.

Continental sells tires for automobiles, motorcycles, and bicycles worldwide under the Continental brand. It also produces and commercializes other brands on a regional level, such as General, Euzkadi, or Barum. Continental's customers include all major automobile, truck and bus producers, such as Volkswagen, Daimler AG, Ford, Volvo, Iveco, Schmitz, Koegel, Freightliner Trucks, BMW, General Motors, Toyota, Honda, Renault, PSA and Porsche.[13][14]

In 2001, Continental acquired a controlling interest in Temic, DaimlerChrysler's automotive-electronics business, which is now part of Continental Automotive Systems. The company also purchased German automotive rubber and plastics company Phoenix AG in 2004, and the automotive electronics unit of Motorola in 2006.[15] Continental acquired Siemens VDO from Siemens AG in 2007.[16]

In Argentina, teamed up with FATE in 1999 for the production of tires for cars, trucks and buses[17] and exports the production of the San Fernando plant to the rest of South America.[18] In 2007, the company began to construct a plant in Costa Rica to produce powertrain components for North America. The plant was to open in two phases and ultimately employ 550 workers.[14]

Schaeffler takeover offer

Continental bicycle tire ad, France, circa 1900

When Continental decided to purchase ITT Industries' brake and chassis business for $1.93 billion in 1998,[19] the head of ITT's brake division, Juergen M. Geissinger was hired as the CEO of the family-owned bearing and auto parts manufacturer Schaeffler Group.[20]

Ten years later, Geissinger returned to Continental with mother and son owners Maria-Elisabeth and Georg Schaeffler and a consortium of banks, to buy control of the company.[21] Continental appeared to have overextended itself with the acquisition of Siemens’ VDO automotive unit in 2007 for €11.4 billion[7] and had lost almost half of its market capitalization since.[9]

In August 2008 and after a protracted standoff, Continental agreed to be taken over by the Schaeffler Group in a deal that valued the company at approximately €12 billion.[22] Schaeffler in return agreed to limit its position to less than 50% for a period of four years and support Continental's ongoing strategy. This arrangement was overseen by former German Chancellor Gerhard Schroeder[23] At Continental's 2013 annual shareholder meeting Schaeffler gave notice that it will terminate its mutual investment agreement with Continental in May 2014.[24] Continental's CEO Elmar Degenhart commented, "Notice of termination of the investment agreement is understandable from the vantage point of Schaeffler, our anchor shareholder. We are confident that the two companies will continue their very good and goal-oriented cooperation on into the future."[24] Continental's CEO Manfred Wennemer, who had opposed Schaeffler's offer, resigned and was succeeded by Karl-Thomas Neumann on 1 September 2008.[25] Less than one year later, Schaeffler's CEO Juergen Geissinger succeeded in installing his longtime confidant (and former leader and later head of ITT Teves/Continental Brake and Chassis Division) Elmar Degenhart, the head of his automotive division, as the new chief executive of Continental, ousting Neumann.[10]

Continental Tire the Americas, LLC

Continental Tire entered the North American Tire industry with its 1987 purchase of General Tire, forming Continental Tire of North America (CTNA).[26] At the time, Continental was following other tire manufacturers, such as Bridgestone and Michelin, into the American tire market.

The North American headquarters of the tire divisions are located in Lancaster County, South Carolina. The North American headquarters of the CAS division are located in Auburn Hills, Michigan, directly East of the Great Lakes Crossing mall.

The company announced that effective 1 January 2006 it would implement massive cuts on retiree health care for retirees across the country. After a class action lawsuit, the company and United Steelworkers union, representing the retirees, agreed to a settlement whereby the company would continue to fund benefits.[27] Later that year, it announced it would cease tire production in Charlotte, North Carolina.[28] and would close its tire production plant in Mayfield, Kentucky,[29]

In 2011, CTNA announced that it would build a plant in Sumter, South Carolina. The plant will cost approximately $500 million and employ 1,600 workers by 2020.[30]

Automotive electrical-energy storage systems

Continental was one of the companies bidding to work with GM to provide the battery pack for the Chevrolet Volt extended-range electric vehicle (E-REV).[31] It is the primary contractor for a system utilizing Lithium-ion batteries from A123Systems. GM instead signed a contract to assemble packs with cells purchased from Compact Power.[32]

Executive management

Chief executive officers

Chairmen of the board

Supervisory Board

Acquisition of Veyance Technologies Inc.

The German branch of Continental AG has acquired the Fairlawn-based rubber company Veyance Technologies Inc. Veyance will be integrated into the company’s ContiTech division, will serve as the regional home office for ContiTech in North America.

The Brazilian antitrust authority Council for Economic Defence, or CADE, made it official on January 29th, described in a press release on the 30th, from the company. The total transition was $1.6 billion. The company will divest Veyance’s NAFTA air springs business in Mexico and its Brazilian steel-cord belting business in response to some of the concerns raised by antitrust authorities, the release said, employing about 600 people work in those operations.[34]


See also

References

  1. ↑ "Continental Automotive -The Automotive Group of Continental AG - Innovations for a Mobile Automotive Future". conti-online.com.
  2. ↑ "Annual Report 2014".
  3. ↑ 3.0 3.1 3.2 3.3 "Continental Official Website".
  4. ↑ "Pressemitteilung". Conti Media. Retrieved 1 January 2013.
  5. ↑ "The History of General Tire from 1915 up to now". General Tire. 27 January 2005. Retrieved 2012-05-02.
  6. ↑ "History 1871 - 1926". Continental Corporation. Retrieved 2012-05-02.
  7. ↑ 7.0 7.1 Dougherty, Carter (28 August 2007). "Continental sets about integrating Siemens VDO". The New York Times. Retrieved 3 January 2013.
  8. ↑ "Top 100 global suppliers". Automotive News (Crain Communications). 14 June 2010. Retrieved 3 January 2013.
  9. ↑ 9.0 9.1 Christoph Hammerschmidt (14 July 2008). "Hunter Continental AG now becomes the hunted". EE Times. UBM Tech. Retrieved 6 January 2013.
  10. ↑ 10.0 10.1 "Schaeffler wins battle on Continental chief". The Financial Times. The Financial Times Ltd. 12 August 2009. Retrieved 6 January 2013.
  11. ↑ Tschampa, Dorothee (6 September 2012). "Continental Back in German DAX After Schaeffler Recovery". Bloomberg News (Bloomberg L.P.). Retrieved 3 January 2013.
  12. ↑ "Continental Corporation -Shareholder Breakdown, Notification of Voting Rights". Continental AG. Retrieved 6 January 2013.
  13. ↑ "Continental General Tire Corp.". Funding Universe. Retrieved 2012-05-02.
  14. ↑ 14.0 14.1 "German Autoparts Company Begins Investment in Costa Rica". Inside Costa Rica. 17 October 2007. Retrieved 2012-05-02.
  15. ↑ "History 1997-2010". Continental Corporation. Retrieved 2012-05-02.
  16. ↑ Carter Dougherty (28 August 2007). "Continental sets about integrating Siemens VDO". The New York Times (NYTimes.com). Retrieved 2 May 2012.
  17. ↑ "Fate se asoció a Continental". Lanacion.com.ar. Retrieved 3 April 2012.
  18. ↑ "Blog de las Marcas: Historia de Fate". Blogdelasmarcas.blogspot.com. Retrieved 3 April 2012.
  19. ↑ Staff writers (28 July 1998). "Continental A.G. in $1.93 Billion Deal". The New York Times. The New York Times Company. Retrieved 3 January 2013.
  20. ↑ Jann Bettinga and Sheenagh Matthews (28 January 2009). "Billionaire Schaeffler Shunned School to Lead Company". Bloomberg L.P. Retrieved 3 January 2013.
  21. ↑ Schaeffler AG Press Release (16 July 2008). "Schaeffler Group seeks strategic shareholding in Continental AG". Schaeffler AG & Co. KG. Retrieved 7 January 2013.
  22. ↑ "Schaeffler agrees to limit Continental stake". The Economic Times. Bennett, Coleman & Co. Ltd. 21 August 2008. Retrieved 6 January 2013.
  23. ↑ "Continental concludes far-reaching Investment Agreement with Schaeffler". Continental AG. 21 August 2008. Retrieved 6 January 2013.
  24. ↑ 24.0 24.1 "Schaeffler Ending Conti Investment Agreement". Tire Review (Babcox Media). 14 May 2013. Retrieved 4 July 2013.
  25. ↑ Schuetze, Arno (23 August 2008). "Continental appoints Neumann as new CEO". FinanzNachrichten.de. AFX News. Retrieved 7 January 2013.
  26. ↑ "History 1971 - 1995". Continental Corporation. Retrieved 2012-05-02.
  27. ↑ "USW Lawsuit Results in Continental Tire Agreeing to Provide Retiree Health Care" (Press release). Reuters.com. 16 April 2008. Retrieved 2012-05-02.
  28. ↑ Fuchs, Roberta (10 March 2006). "Continental may halt production, lay off 478". Charlotte Business Journal (bizjorunals.com). Retrieved 2012-05-02.
  29. ↑ "Continental Tire to close Kentucky plant". Charlotte Business Journal (bizjorunals.com). 2 August 2006. Retrieved 2012-05-02.
  30. ↑ "Continental to build tire plant in S. Carolina". reuters.com. Reuters. 6 October 2011. Retrieved 2012-05-02.
  31. ↑ Green, Jeff; Ortolani, Alex (12 January 2009). "GM to Build Michigan Plant to Supply Volt Batteries". Bloomberg.com. Retrieved 2012-05-02.
  32. ↑ Jin, Hyunjoo (14 November 2010). "LG Chem sees more battery orders for GM's Volt in 2011". Reuters.com. Reuters. Retrieved 2 May 2012.
  33. ↑ "Supervisory Board / Committees". Continental AG. Retrieved 4 January 2013.
  34. ↑ McAfferty, Rachel Abbey. "Continental AG closes $1.6 billion acquisition of Fairlawn-based Veyance Technologies Inc.". crainscleveland.com. Cleveland Business. Retrieved 27 February 2015.

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