No dividend in the crisis: Conti works council calls for a waiver

No dividend in the crisis
Conti works council calls for waiver

Not only the employees, but also others should now "make noticeable contributions". The Continental Works Council calls on the company not to pay any dividends for the crisis year 2020. For the auto suppliers there is currently "nothing to distribute".

In view of the numerous job cuts and the difficult restructuring at the automotive supplier, the Continental works council is demanding more waivers from the shareholders. For the year 2020, which is characterized by further cuts and the Corona sales crisis, there should be no dividend, demands the top representative of the workforce in the group, Hasan Allak. He sent a letter and a video message to employees and management. It is about the strategy under the new Conti boss Nikolai Setzer and the prospects for the coming months.

Continental 115.75

In the current austerity course, employees in Germany urgently need more clarity. "Among other things, with the temporary suspension of the group profit-sharing scheme, the employees have made a significant contribution to reducing costs," said Allak – "not to mention the very painful job losses". Other groups would now also have to "make noticeable contributions" so that the Dax company from Hanover continues to play a leading role even after the upheaval in the automotive and mechanical engineering industries.

"We call on the supervisory board to forego a dividend payment at least for the 2020 financial year," said Allak. "Anyone who leads numerous fixed-cost debates at the locations and implements job cuts has nothing to distribute." Continental is involved in a complicated realignment of mechanics and hydraulics towards more and more electronics, sensors and software. In the "old" world of automobiles, jobs are noticeably disappearing, and not all employees can be taken into the "new" world – despite programs for further qualification.

The tire business recently remained profitable overall. But here, too, the board of directors uses the red pencil – to the incomprehension of trade unionists and also a number of politicians who did not feel involved before the latest savings decisions. In the past year, the pandemic-related economic crisis also had a negative impact on sales. For the second and third quarters, Conti reported high three-digit million losses. In July, the Annual General Meeting nevertheless resolved a dividend for the shareholders, they received a distribution of three euros per share for the 2019 financial year. That was less than the original proposal of four euros – but there were also votes that were aimed at the sensitive Corona situation wanted the owners to be more willing to do without.

"These job cuts will be expensive"

In addition, before the virus crisis began, Conti had lost billions in 2019 due to high depreciation and problems on the Chinese market. Allak said that the management must also offer the workforce more security and predictability: "The colleagues must finally get reliable, individual answers in terms of personal perspectives, employment and qualifications."

IG Metall broke off talks on the progress of the group restructuring in December. The head of IG Bergbau Chemie Energie, Michael Vassiliadis, threatened: "These job cuts will be expensive." In Germany alone, around 13,000 jobs at Continental are on fire; worldwide there will be a good 30,000 by 2029. The company generally speaks of "changes" in these jobs, including deletions and relocations.

However, there is often no detailed information on plans for individual locations. Setzer, who took over from Elmar Degenhart at the beginning of December at the top of the board at Conti, had declared that he wanted to master the crisis with increased investments in digital and electronics: "The software makes the difference." The necessary cuts in other areas are bitter and painful – but there is no way around a profound restructuring for him either.

Allak now said: "We see Continental generally well positioned in the relevant markets, there is a promising product portfolio." What is needed, however, are clear statements to employees in the current uncertain time. "Good prospects for the company are not only important for the board of directors and shareholders, but also for all colleagues," said the works council chairman. "That is why we continue to demand that new products – hardware and software – must also be developed and produced at German locations." In autumn he had warned: "The transformation that has begun will only work with the consensus of all those involved and not with decisions in the Basta format."