Continental to renegotiate Tier 2 contracts

Hanover, Germany -- Continental AG will restructure contracts with its suppliers following its $16.8 billion acquisition of Siemens' VDO automotive unit.

"We started talking to our suppliers about the prices," Continental CEO Manfred Wennemer told Automotive News Europe in an interview at VDO's headquarters.

“Some of them gave us signals that they will give the same conditions to Continental as they had contracted with Siemens VDO.”

On

Monday, Continental had a chance to look into Siemens VDO's books. It

discovered differences between what each company is being charged by

the same suppliers.

The savings should help Wennemer reach his goal of a 10 percent return on investment from the newly formed megasupplier.

Continental

is now one of the top five global automotive suppliers, within reach of

rival and industry leader Robert Bosch GmbH, and double in size as a

result of the deal.

Continental,

of Hanover, Germany, said Monday it had completed its purchase of

Siemens VDO from Siemens AG of Munich for $16.7 billion.
From Automotive News Europe.