Continental: protectionism, trade wars make our products more expensive
German automotive supplier Continental voiced its support to completely abolish trade tariffs or bring them into line at the lowest level. “Protectionism and trade wars make our products more expensive,” Continental CEO, Dr. Elmar Degenhart, at the technology company’s Annual Shareholders’ Meeting.
“For example, unequal tariffs are hurting the free trade of cars between the U.S.A. and Europe. The best solution is to abolish them completely or bring them into line at the lowest level. We are calling for policy makers to enter into negotiations. We expect them to work hard for fair, free trade. Artificially inflating prices reduces national income and in doing so puts jobs and prosperity at risk,” warned Degenhart in Hanover in front of more than 1000 participants.
Degenhart underlined the importance of the free flow of goods for his own company. For example, the Automotive divisions of the technology company work with more than 17,000 suppliers and partners across the world. “They handle over 140 billion components a year. On average, they cross national borders four times because they do not reach our customers until they are finished products. Protectionism and trade wars make our products more expensive.”
Continental must constantly change and adapt in light of the rapid development of the markets, anticipating change as a normal, everyday activity. “That is why we are becoming even more flexible and agile, which helps us to remain competitive and fit for the future on a permanent basis. With a network culture, flat hierarchies and small units that respond more quickly to customer requirements as well as greater responsibility and freedom for our staff including more trust-based working hours worldwide,” emphasized Degenhart.
As part of this adapting process, the company might spin-off its business that makes car engine components. The company has been in talks with banks about a possible structural overhaul to become more flexible and adjust to far-reaching shifts in the auto industry towards electric and self-driving technologies.
Continental will expand the “Powertrain Division” which accounts for less than a fifth of its US$ 53.15 billion annual sales and makes components for battery and combustion engines, Degenhart said.
“We are currently testing suitable scenarios. We want to find out which setup for our organization will make us adaptable even faster. We expect to submit a recommendation to the Supervisory Board by the middle of the year,” explained Degenhart.