German automotive supplier Continental must save hundreds of millions of euros in costs and will probably have to lay off workers due to a slump in demand caused by the coronavirus pandemic, Germany's WirtschaftsWoche cited the CEO as saying.
"This will be very painful, but we have no other choice," CEO Elmar Degenhart told staff in an internal video, according to accounts from company insiders reported by the business news weekly.
"At the moment we cannot give any job guarantees. The probability that we will have to talk about forced layoffs is very, very high," WirtschaftsWoche cited Degenhart as saying.
A Continental spokesman declined to comment on the report. He said that management had told its annual news conference in March that it would consider further cost cuts in light of mid-term market developments.
The German car industry subsequently suffered a steep slowdown as the viral pandemic reached Europe, causing car sales in the region to collapse by 78% in April as governments locked down their economies.
Despite pleading for state incentives to buy new cars, its calls for special treatment were ignored by Chancellor Angela Merkel's government in a €130 billion stimulus package that instead backed an across-the-board cut in value-added tax.
The stimulus only offered incentives to buy clean-energy cars, but not the petrol and diesel-powered models that still make up most of German car production.
According to WirtschaftsWoche, Degenhart told staff that the fiscal stimulus would not help the car industry, a leading exporter and major employer in Europe's largest economy.
"We have given up hope that the stimulus packages are effective and good enough to give a short-term boost to car markets. We cannot expect any help from politicians," he was quoted as saying.