ContiTech workers back sale, seek commitments from Lone Star

Hanover – German trade union IGBCE and ContiTech's works councils are seeking “binding” commitments from Lone Star Funds following the private equity firm's agreement to acquire Continental AG's industrial and materials 4 July.

In a joint statement, the employee bodies said they had secured a “transformation package” and framework agreement requiring the buyer to invest in the business and protect jobs.

"As employee representatives, we were unable to prevent the sale," said Hasan Allak, deputy chairman of Continental's supervisory board and chairman of the group works council.

However, noted Allak, the workers' representatives have “critically monitored” the process and agreed with Lone Star that it should "invest, safeguard jobs, and provide apprenticeships in Germany."

The US equity firm, he added, has also agreed to discuss business plans and negotiate binding agreements with employee representatives.

"Therefore, we did not oppose the sale and are thus giving them a considerable vote of confidence," Allak said.

IGBCE board member Francesco Grioli said the union remained "unconvinced by the reasons for the sale of ContiTech" and criticised Continental's plans to pay much of the proceeds to shareholders and to support its share price.

"Nevertheless, in the interest of the employees, we are now committed to a binding dialogue with the new owner," said Grioli.

Grioli went on to add that IGBCE would oppose any further job cuts beyond those already announced by Continental.

Matthias Tote, chairman of the ContiTech Rubber Works Council, said the agreed 'transformation package' offered a "very good basis" for discussions with the new owner.

“With a view to the future of ContiTech jobs in Germany, we are offering the owner a cooperative partnership based on common sense,” Tote concluded.