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Continental: Two Billions Loss on Automobile Suppliers – Just Three Months



The change in the car industry takes a long time – and can be painful. The automotive supplier Continental has now to determine for themselves. In the third quarter of 2019, the Group has to cope with a loss in the billions. Corresponding key data, which were announced at the end of October, have now been confirmed in Hannover.

  

Also in the coming year, Continental expects  chart show no recovery of the car market. "In the best case scenario, we can see a worldwide sideways development of automobile production in 2020," said CFO Wolfgang Schäfer. But a decline is possible.

  

For the final quarter of 2019, the Dax Group expects falling production rates in the three major world regions of China, Europe and North America. In addition, costs for an austerity program burden the numbers.

  

Thousands of jobs threatened

  

Continental CEO Elmar Degenhart spoke of a relatively solid development – "despite the continuing decline in the market environment". However, management also believes that the global production of cars and light commercial vehicles will decline in the next five years and therefore writes off 2.5 billion euros. Most of the allowances are for the interior decoration of cars.

  

Given these depreciations, the loss in the period from July to September is almost two billion euros. Continental posted an operating profit of 851 million euros one year ago. Consolidated sales climbed in the third quarter by about three percent to 11.1 billion euros.

  

"The current situation requires us to permanently increase our competitiveness," said Degenhart. With the recently launched program "Transformation 2019-2029" he wants to rebuild the group, away from hydraulic and combustion technology, to more electronics, software and components for electric mobility. The employees should be qualified. But there may also be job cuts.

  

By 2023, the company's reorientation could affect 15,000 jobs, 5,000 of them in Germany. Degenhart had said that dismissals can not be ruled out, but only as a "last resort." At the end of September, Continental employed more than 242,000 people worldwide.

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