German automotive supplier and tiremaker Continental plans to cut thousands of jobs in its automotive department to restore competitiveness and reduce costs by €400 million, the company acknowledged on Monday. Continental didn’t give exact figures, but on Sunday, the German Manager Magazin wrote that 5 500 jobs, of which 1 000 in Germany, are at stake.
The news comes somewhat as a surprise as just days before the company said it expects a strong quarter after losses in the second quarter and regaining profitability in Q3 ending in line with expectations. According to a press release, this was thanks to price adjustments, high-cost discipline, and stabilized supply chains.
Adjusting sales outlook
Continental said it has adjusted its sales outlook for the Automotive group sector, mainly because of ongoing negative exchange-rate effects with sales of around €20,0 billion to €21,0 billion, half a billion less.
Continental’s automotive sector employs about 25 000 people for a total of 200 000 in the whole group and specializes in technologies for passive safety, brakes (by wire systems), chassis, motion, and motion control systems.
Other applications include assisted and automated driving solutions, display and operating technologies, audio and camera solutions for vehicle interiors, and communication technology for fleet operators and commercial vehicle manufacturers.
Electronic sensors made in Belgium
Continental Automotive has a factory in Mechelen, Belgium, employing 360 people to produce electronic brake and wheel sensors for passenger cars. This unit, Continental says, is a pioneer in cloud-based access and telemetry for car rental and car-sharing companies, enabling companies to manage their fleets efficiently without physical keys. Whether the Belgian factory will see job cuts is not known yet.