BERLIN (Business) – In what is seen as a bid to save hundreds of millions of
euros, German automotive supplier Continental will probably have to lay off employees in the wake of a slump in demand triggered by the coronavirus pandemic, the business news weekly WirtschaftsWoche cited the CEO as saying.
Company insiders told the weekly that the CEO in an internal video had mentioned that “it was a painful decision and they were left with no other choice”.
“At the moment we cannot give any job guarantees. The probability that we have to talk about forced layoffs is very, very high.”
– Elmar Degenhart, Manager and Chairman of the Board of Continental AG
Though a Continental spokesperson declined to comment on the report, he said that the management had revealed in its annual news conference in March that further cost cuts in the wake of mid-term market developments were on the anvil.
When the pandemic swept through Europe, the German car industry subsequently went on a downward spiral, causing a 78 % collapse in sales in the region in April as governments locked down their economies.
Amidst the plea for state incentives to buy new cars, the call for special
treatment were ignored by the Angela Merkel government when it rolled out a 130 billion euro (115 billion pounds) stimulus package. Instead, it supported an across-the-board slash in value-added tax.
While the stimulus only offered incentives to buy clean-energy cars, it ignored the petrol and diesel-powered models that still make up the lion’s share of German car production.
Degenhart told employees that the fiscal stimulus would not help the car
industry, one of the key exporters and major employers in Europe’s largest
economy, said the weekly.
“We have given up hope that the stimulus packages are effective and
good enough to give a short-term boost to car markets. We cannot expect any help from politicians,” he was quoted as saying.
(Photo syndicated via Reuters)
This story has been edited by BH staff and is published from a syndicated field.
