The German automotive supplier Continental said on Tuesday to expand its savings program, which was initiated in 2019, to save more than one billion euros (1.19 billion U.S. dollars) per year from 2023 onwards.
Continental increased its previous savings target by slightly more than 500 million euros annually due to the continuing low vehicle production globally and the worsening of the economic crisis caused by the effects of the COVID-19 pandemic, according to the company.
“The entire automotive industry is currently faced with enormous challenges.
It has not experienced a larger, more severe crisis in the past 70 years,” said Continental CEO Elmar Degenhart.
Continental also said to push its automation of processes, such as through Industry 4.0, increase work flexibility and reduce labor costs. According to the company, the savings program would probably lead to the relocation or closure of plants at various locations.
Continental is expecting that the announced expansion of the structural program would affect about 30,000 jobs worldwide. “These will be modified, relocated, or made redundant,” said the company.
Approximately 13,000 of the affected jobs were located in Germany, and 90 percent of the targeted adjustments were to be completed by 2025, it said.
Continental currently employs more than 232,000 people worldwide, of whom around 59,000 work in Germany, said the company.