Continental, the German car parts maker, deepened its cost-cutting programme and warned that a further 10,000 jobs were at risk, as the coronavirus crisis hammered the global auto industry.
The Hanover-based company, whose customers include the world’s largest carmakers, announced last year that 20,000 positions would be affected by its restructuring plan, as it sought to identify savings to fund an expensive technological shift to electric vehicles.
On Tuesday, the group almost doubled the number of roles at risk in Germany, from 7,000 to 13,000, and cautioned that the strategy “will probably lead to the relocation or closure of facilities and operations at locations where costs are persistently too high”.
Continental, which employs more than 230,000 people worldwide, and almost 60,000 in Germany, has already axed 3,000 roles as part of its 10-year plan, which it says will save the company €1bn annually from 2023.
“The entire automotive industry is currently faced with enormous challenges,” said Elmar Degenhart, chief executive.
“It will demand a lot from us in the short term and push us to our limits in the coming years,” he added. “After roughly a decade of fast, profitable growth and workforce expansion in line with the growth model of the automotive industry at that time, we are now gearing our operations to a new kind of growth with future technologies.”
In July, the company said it did not anticipate global car sales recovering to 2017’s record of more than 95m vehicles until at least 2025.
But on Tuesday workers’ representatives in Germany accused the company of exaggerating the effects of the current downturn to justify job cuts.
Latest coronavirus news
Follow FT’s live coverage and analysis of the global pandemic and the rapidly evolving economic crisis here.
“Under the guise of the corona crisis, everything that no longer meets the profitability requirements is apparently now to be swept away,” said Francesco Grioli of the IG BCE union, who is also a member of Continental supervisory board.
Mr Grioli added that IG BCE was open to “creative solutions” such as a temporary reduction in working hours or retraining schemes.
Continental said investments in its software divisions and in electric vehicle technology will lead to new jobs, but declined to predict how many of the 30,000 staff whose roles are currently at risk would be able to find further employment at the company.
Earlier this year, Continental came under fire for continuing to pay a dividend of €3 a share, totalling €600m, despite having put several thousand workers on furlough.