Conti Machinery admits reversal of strategy at Puchov

By David Shaw, ERJ staff

Hannover, Germany -- Continental's Machinery unit has acknowledged that the closing of its operations in Puchov amounts to a major reversal of strategy.

In a written response to ERJ questions, the company said it had previously followed a clear growth strategy, but the reduction in orders since the onset of the financial crisis last September means growth is no longer an option in the mid-term. Thus, the company has decided to concentrate on one manufacturing centre.

CM said it has made adjustments at its Hannover unit in addition to the decision to end operations at Puchov.

Overall, said the company, sales fell by 48 percent in the first quarter of 2009, and the company does not expect a recovery before 2011 at the earliest. CM said it has to find a way to see out the major economic downturn for an extended period. "This measure will keep our cost of production at competitive level."

The statement added, "This is an internal decision, as a result of the economic situation and was not influenced in any way by Schaeffler."

Conti Machinery said, "We have always been a reliable business partner for our customers and we will keep all our committments also in the future."