HANOVER, Germany (June 8, 2011) — Continental A.G. will combine its Passenger & Light Truck Tires (PLT) and Commercial Vehicle Tires (CVT) divisions into one business unit Aug. 1 to provide a consolidated platform for profitable growth. PLT top executive Nikolai Setzer will be in charge of the consolidated business.
The consolidation coincides with the departure July 31 of Hans-Joachim Nikolin, head of the CVT division since 1999 and a member of Conti's board for 12 years. The 55-year-old executive is leaving the company on “highly amicable” terms, Conti said.
“The business segments in PLT and CVT are increasingly up against similar challenges of a major caliber,” said Conti Board Chairman Elmar Degenhart. “This finds them moving closer together all the time. Our goal is a step-up in profitable growth worldwide, above all in the emerging markets.
“In forming a single tire division, we are now consolidating our forces to achieve this end. Above and beyond this, we are creating a more pronounced balance in our business structure at the corporate level,” Mr. Degenhart said.
Mr. Setzer, 40, joined Continental in 1997 in the tire test department/tire development engineering and moved into OE key account mangement two years later. He advanced to vice president, OE, in 2004 and to executive vice president of PLT OE in 2007. A year later he was named executive vice president of PLT Europe and Africa and then to head the PLT business worldwide in March 2009. He was named to the company's executive board in August 2009.
Conti did not comment on potential costs or cost savings of combining the divisions nor on potential impact on employment.
The combined businesses generated $9.54 billion in sales last year with more than 35,400 employees. Together the divisions have 18 tire plants in 14 countries.
At $1.85 billion, the CVT division was Conti's smallest. It generated $66 million in pre-tax operating income. The PLT division contributed $1.3 billion in operating income on $7.68 billion in sales.
Mr. Degenhart lauded Mr. Nikolin, saying: “He discharged all his executive assignments in our company with the utmost competence, commitment, integrity and loyalty. In his person we are losing an impressive management personality who consistently targeted Continental´s overall success even in the most trying times.”
The Conti chairman called Mr. Setzer “an established and experienced executive,” who has “successfully and vigilantly”overseen the PLT business for the past two years.