Continental AG announces major reorganization of its executive board
Continental AG's executive board has opened up "broader future options" by reorganizing the tasks of its members to concentrate on two core business fields.
Those options include the possibility of selling off either one or both of its tire divisions. However, there is no indication by Continental that such a sale or sales would be to a competing tire manufacturer.
In contrast, there is every indication that selling off either or both divisions would be in its/their best interests as well as Continental's.
Here is how the reorganization shakes out.
1. Automotive. Board Chairman Dr. Karl-Thomas Neumann now heads up the Automotive group, which consists of the Chassis & Safety, Interior and Powertrain divisions.
There will also be no changes in the operative management of the divisions within the Automotive group, which is in the hands of Dr. Ralf Cramer (Chassis & Safety), Helmut Matschi (Interior) and Dr. Karl-Thomas Neumann (Powertrain).
2. Rubber. Deputy chairman Dr. Alan Hippe is now managing the Rubber group, made up of the Passenger and Light Truck Tires, Commercial Vehicle Tires and ContiTech divisions. He continues to hold the position of CFO and heads the Passenger and Light Truck Tires division within the Rubber group.
Dr. Hans-Joachim Nikolin will continue to lead the Commercial Vehicles Tires division. Nikolin also is responsible for purchasing, quality control and environmental process management for the executive board.
Heinz-Gerhard Wente will fill the position of the retiring Gerhard Lerch as head of the ContiTech division. Wente will maintain his position as executive board member for HR and director of labor relations for the company.
On Tuesday at the company's headquarters in Hannover, Germany, Continental's supervisory board formally accepted the executive board's new task allocation. The supervisory board also extended executive board member Nikolin's term of office until May 2014.
In an official statement, Continental AG officials explained why the moves are necessary.
"Following an elementary change in strategy, Continental developed two major company groups in the past 10 years, primarily through selective acquisitions, major investments and focused expenditures in research and development. These groups are concentrated on two very different business fields: Automotive and Rubber," explains Executive Board Chairman Dr. Neumann.
"Following the acquisition of Siemens VDO, we created the three Automotive divisions in the summer of 2007 -- already at that time with a common management for the coordination of cross-divisional tasks. The future Automotive group was thus called to life.
"We are now taking the next logical steps, creating not only a strong Rubber group as a counterpart but, at the same time, setting up very clear management and responsibility structures for both groups."
"Under the roof of Continental, two company groups have basically achieved positions that are much stronger and more stable, than the initial position of the "classical" Continental at the beginning of the nineties -- with regards to sales and margins, production capacities and market position," stressed Vice Chairman of the Executive Board Dr. Hippe.
"With this move, we are providing both company groups with more freedom so they can react to the respective trends and options in their various business fields with much greater sovereignty. At the same time, the corporation attains the flexibility it needs to respond quickly and decisively to the wide range of future trends and possible options, especially in view of the tough economic environment and the critical situation on the financial markets."