Automotive News - March 17, 2008 - (Page 14f)

14F • MARCH 17, 2008 Continental plans to bring r&d in-house Bettina Mayer bmayer@craincom.de HANOVER, Germany — Continental AG plans to cut costs by doing more r&d in-house. The move follows the company’s acquisition of Siemens VDO Automotive late last year. “We are talking about savings of a lower double-digit million potential,” Continental CEO Manfred Wennemer said at a press briefing here late last month. In the future, work now done by 5,000 engineers employed elsewhere will be done by Continental engineers. The company declined to say which suppliers would be affected. Continental executives say the move is part of a plan to improve groupwide profits. Continental has an overall profit margin of 10 percent, but former Siemens VDO divisions have an operating profit margin of 7.8 percent. After the $16.71 billion purchase of Siemens VDO, Continental is bundling its activities in r&d, purchasing and information technology. At least 2,500 jobs are likely to disappear as the merged company moves toward leaner sales and administration structures. Wennemer: Neumann: Millions in annual More pressure on cost savings some suppliers As part of the integration plan, Continental also wants to foster stronger relationships with a smaller number of technology suppliers. Automotive chief Karl-Thomas Neu- mann declined to say which companies would be part of Continental’s core supplier group. “The pressure on some suppliers will increase,” he said. After the takeover last December, Wennemer discovered that in some cases VDO was paying less to suppliers than Continental was for similar products. Talks with suppliers about purchasing contracts for the combined company started immediately, and Wennemer said this month he was pleased with the early results. “We made great progress in this area,” he said. Suppliers are likely to have reservations about Continental’s price pressure, but Wennemer said they “appreciate working for a successful company with a bright future.” He said annual cost savings in the combined company would surpass 300 million euros (about $456.1 million at current exchange rates), up from a December target of about $258.4 million. The Continental CEO also said the integration of the two companies is on schedule: “We are planning to finalize the integration in early 2009 and start concentrating on new projects then.” c Rieter expects to increase its global footprint Arjen Bongard abongard@craincom.de All Systems ® www.yazaki-na.com In many ways, Rieter is a perfect example of the global nature of the auto industry. The industry’s biggest supplier of noise control and thermal insulation products is based in Winterthur, Switzerland, not far from Zurich. But the company’s automotive operation houses only its headquarters, a central research department and 500 of its 11,000 workers. The rest of Rieter is spread across countries that, unlike Switzerland, build cars. Much of the growth is in developing worlds. “Globalization means we follow our customers on their paths to developing parts of the world,” Rieter CEO Hartmut Reuter said. Reuter said a company’s nationality is of relatively little importance today. He cited some positive attributes of Rieter’s home base, such as the attraction of working in Switzerland and a general perception of Swiss companies and people as “neutral” and “stable.” “But in reality, performance, price and cost are the main issues,” he said this month in a telephone interview. In 2007, Rieter’s automotive sales rose 8 percent to 2.36 billion Swiss francs, or about $2.27 billion. Reuter said the group’s core business also stands to benefit from the push to reduce carbon dioxide emissions. “The issue of CO2 is very high on our list,” he said. “Our main challenge is to help our customers reduce emissions and reduce cars’ fuel consumption.” Rieter has developed ultralight materials for sound and thermal insulation. Globally, Rieter deals with market conditions that vary starkly from one region to the next. In the United States, Reuter said, he’s “comfortable” with the roughly 50 percent business he does with Japanese customers. “And then there’s the 50 percent we have with the Big 3; there the risk is higher,” he said. Rieter sees strong growth opportunities in eastern Europe, China, India and South America. c http://www.yazaki-na.com http://www.yazaki-na.com

Table of Contents Feed for the Digital Edition of Automotive News - March 17, 2008

Leases grow as alternative to long loans Toyota dealers balk at upgrades Up for grabs: China importer Testing Chevy's Camaro Escalade first vehicle to get full LED headlamps Hoops fans take a shot at China Toyota will cut Tundra, Sequoia production F-150's risk-reward strategy: Ramp up before the revamp As UAW, American Axle talk, CEO Dauch in Fla. Ex-GM purchasing executive indicted Court allows higher Plastech credit line Saab sticker prices rise as sales fall; will U.S.-built 9-7X offset losses? VW plant capacity in U.S.: 250,000 units Bad cruise control switch haunts Ford Continental plans to bring r&d in-house Rieter expects to increase its global footprint Stadler: Audi considers U.S. plant Another General charges into electric cars Toyota sees its first checkered flag as sign NASCAR's paying off A pickup may figure in Kia's future Analysts: Lampert no threat to AutoNation More likely to be spent to keep suppliers alive in '08 2 suppliers plan Alabama plants UAW seeks job guarantees to end American Axle strike Revolving door continues to spin at Nissan GM, top marketers to share research Electric power steering is grabbing the wheel Delphi completes sale of interiors unit to Renco Mercedes again is true-luxury king How electric power steering works It's time for dealer-factory collaboration Ford must close stores but remain open to diversity The small print Here's a question for Obama, Clinton Didn't you ever hear of a halo? Hurray for affordable performance cars Politics can age a car overnight Good for planet, good for GM What 'scientific consensus'? Lutz may be right but said it wrong Lutz had the courage to tell the truth Big Apple isn't very green 23 finalists in running for PACE honors Canada sales up 14.5% in Feb. RV shipments drop 7.1% in Jan. Wagoner: No sure thing on state air rules Conquest sales, Asia growth boost ADP Brockman: Reynolds focuses on service OEConnection links to ADP Geneva goings-on Judge: Dealer suit over transfer of GM franchise can proceed Honda will build Ridgeline in Alabama So who's running the show at Chamco? GM seeks Plastech tooling Federal-Mogul reports gains Chrysler sells plant to Fiat BMW's new sales boss Odell is named COO at Ford of Europe Strike dents GM truck output Tony Stewart blows a gasket Illingworth leaving — and staying with — Toyota A note to eager auto execs: Invaders sometimes get icy reception in Russia Hush, hush: Baby Nason on board For rent: Ford's PAG palace on the West Coast Chrysler cuts Calif. studio

Automotive News - March 17, 2008

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