Rolf Koerfer, the chairman of the German tire and car parts maker Continental, is set to offer tomorrow to leave his post as part of a compromise that will also lead to the removal of Karl-Thomas Neumann, Conti’s chief executive, according to the Financial Times. The impending departure of both men is the latest upheaval at Continental arising from its troubled relationship with Schaeffler, the privately held car parts maker that seized control of its rival last year. It will mean Continental will get its third chairman and third chief executive in just under a year. It raises fresh questions about whether the turmoil at Continental may damage its position within the automotive industry and whether the two companies can save their working relationship with new leaders at Continental’s helm. Schaeffler controls Continental, but at the moment holds just under half of its shares, having agreed to limit its stake and preserve key aspects of Continental’s independence as part of an investor agreement that runs until 2014. Schaeffler is struggling with its own EURO 11 billion of debt and its banks have threatened to take over the company. Maria-Elisabeth Schaeffler, the owner of Schaeffler, and her allies on Continental’s supervisory board were rebuffed last month when they tried to win support to vote Neumann out of his role as chief executive, at a board meeting described as “chaotic” by one participant. They are ready to make a fresh attempt to secure backing for the departure of Neumann tomorrow. Their task will be easier than their previous effort, when they needed the approval of two-thirds of directors. Under corporate rules for Continental, the threshold for acceptance has fallen to a simple majority of directors. But opposition has mounted to Schaeffler’s plans, with representatives of Continental’s employees rallying behind Mr Neumann.
Key Executives Poised to Exit Germany’s Continental
Rolf Koerfer, chairman of Germany’s Continental, will step down.
August 11, 2009