Elmar Degenhart has to lead the automotive supplier Continental out of the worst crisis in its history. The manager is under pressure. Because he is responsible for some difficulties himself.
FA lot is coming together for Continental boss Elmar Degenhart at the moment. Last year, under the impression of the increasingly weaker car markets and the high costs in the company, he had to take a course of savings. Corona is currently making everything worse, which is forcing the auto supplier listed in the Dax to make further cuts. Many questions are unanswered, but at the headquarters in Hanover it has long been clear to everyone that in addition to partial retirement, retraining and reduced working hours, it will probably not go without layoffs. It is possible that Conti will have to resign for operational reasons, says the 61-year-old manager. This is “only the last resort,” he emphasizes. But still there is great fear in the workforce.
Preliminary figures for the second quarter published by Continental this week show how high the pressure is. Sales fell by almost 40 percent. The return adjusted for acquisitions and sales as well as currency effects is minus 9.6 percent, which means nothing other than that Conti should have made a loss of more than half a billion euros before interest and taxes in the period from April to June. Because revenues fell drastically as a result of Corona, as in the entire automotive industry, the excess cash (free cash flow) turned into a deficit of around 1.8 billion euros. The markets had expected even worse numbers, so the Conti share temporarily increased by 4 percent to 92 euros on Tuesday.