Hanover, Germany – Continental Corp. has initiated reduced working hours across all its operations in Germany and is looking to implement similar measures elsewhere, the German group has announced.
About 30,000 employees – about half of the group’s global workforce – have been registered for short-time work as of 1 April under a scheme that could last for six to 12 months, said a Continental update.
The measures cover all corporate functions from production and R&D through to administration, including employees at Continental’s headquarters in Hanover, said the 1 April statement.
Overall, it added, more than 40% of Continental’s 249 production locations worldwide have temporarily ceased activities for periods ranging from a few days to several weeks.
The cutbacks mainly affect Continental’s locations in Europe as well as in North and South America. In China, however, the group has been gradually resuming production since 10 Feb.
Certain production lines, according to Conti, will continue to remain in operation at locations around the world so that the group can fulfil its delivery obligations.
Additionally, ContiTech’s products for essential industries, such as hoses for medical applications and products for the water and food industries will still be manufactured “in many plants.”
“We are cutting our costs, optimising our working capital and postponing projects and investments that are not urgently required until further notice,” said CEO Elmar Degenhart.
Continental also withdrew its 2020 financial outlook on the due to the uncertainties surrounding the duration of Covid-19 pandemic and its effects on production, the supply chain and demand.
In its 5 March outlook, the group had anticipated consolidated sales for the current year of around €42.5 to €44.5 billion and an adjusted EBIT margin of around 5.5 to 6.5%.
The group’s Rubber Technologies segment, which includes tire division and ContiTech, was pegged at €17 to €18 billion sales and adjusted EBIT margin of around 10 to 11%.