Tyre manufacturer Continental is cost cutting at its plastics engineering division Contitech, which is slated to be sold. To sustainably improve competitiveness, the company recently announced that it aims to achieve annual savings of 150 million euros, mainly within administrative structures. The full amount is expected to be achieved in 2028. To this end, further measures will be implemented across the organisation from 2026 onward, including the relocation of activities and job reductions. Cost pressure is rising, said Contitech head Philip Nelles. He stressed that adjusting the cost structure is necessary regardless of the planned sale. According to the works council, around 1,500 jobs will be eliminated.

Among the measures is the relocation of parts of the IT operations to low cost sites in Eastern Europe. Contitech currently has 39,000 employees and generates 6.4 billion euros in revenue. After the already contracted sale of the Contitech business for rubber products supplied to automotive manufacturers (OESL), which generated 1.9 billion euros in revenue in 2024 and had 16,000 employees, Contitech will be left with 23,000 employees and 4.5 billion euros in revenue. Without OESL, Contitech aims to achieve approximately 6 billion euros in revenue from 2030 onward and an adjusted operating margin between 11% and 13%, largely with industrial customers outside the automotive sector.

Continental has been receiving constant calls from potential buyers for Contitech, according to Roland Welzbacher, who became the company’s Chief Financial Officer in October. After the spin off of automotive division Aumovio in September and the planned sale of Contitech in 2026, the group intends to focus exclusively on the tyre business. The sales process, for which investment bank Perella Weinberg has been mandated according to Börsen-Zeitung sources, is set to start in January. Financial circles estimate the enterprise value of Contitech, including debt and excluding OESL, at 4.5 billion euros. A sale to private equity is considered the most likely option in order to avoid antitrust issues.

According to Continental’s works council and the IGBCE union, the breakup of the company is claiming new victims. Warnings of a massive wave of job cuts in Germany have unfortunately proven true, said deputy supervisory board chairman and group works council head Hasan Allak. He added that the board is breaking its promises. One year ago, during the separation of Aumovio, employees at the group headquarters had been encouraged to transfer to Contitech. They were told of four equally strong companies that would provide a safe future.