Continental AG is mapping out a restructuring plan that will affect as many as 20,000 jobs worldwide, part of the German manufacturer’s effort to restore profits while enduring sluggish vehicle production in key markets, according to a company statement.
The auto-parts maker will invest about 1.1 billion euros during the period through 2029 to achieve a reduction of gross costs of 500 million euros annually starting in 2023, according to the statement. The company employs about 244,000 people in 60 countries.
The global program, which the company’s management announced at the end of July 2019, will serve to strengthen the company’s competitiveness over the long term and ensure its viability.
Continental is thus responding to the decline in global automotive production and the increase in customer demand for digital solutions. The program also takes into account multiple parallel developments: an increasingly digitalized working environment, the emerging crisis in the automotive industry and the accelerated change in powertrain technology due to more stringent emissions legislation.
The Transformation 2019–2029 structural program has two main aims: to increase efficiency and productivity through adjustments to the organization and portfolio, and a greater focus on key growth areas of the future.
As such, Continental plans to reduce its gross costs by about €500 million annually from 2023. The company expects the program to cost around €1.1 billion over its 10-year term. These costs will mostly be incurred between 2019 and 2022. Continental does not rule out additional projects if the current program does not achieve the desired impact.