Square Peg, Round Hole? - Tire Review Magazine

Square Peg, Round Hole?

If ever a company didn’t need more aggravation, Continental faces additional speculation that its truck tire business is up for bids.

Conti’s global truck tire group saw first half sales drop about $32 million year-over-year, and operating income for the group is off 45.9% vs. the first half of 2007. Its operating margin, a key figure for Conti managers, was 4.6% for the half, far off the company’s 10% goal. Comparatively speaking, Conti’s consumer tire and ContiTech divisions delivered margins of 13% and 12.3%, respectively.

Top Conti management had previously stated that under-achievers might be jettisoned. And, with all of its traction, stability, braking and telematics operations, it is no secret that Conti is fashioned around the car, not the over-the-road truck.

Now that it’s embroiled in a cash-burning battle for its independence, could the truck tire group, indeed, be on the blocks?

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– Jim Smith

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