Continentals money-losing powertrain division is a long-term problem child.
Industry insiders believe that the division needs to push ahead with future products. But Continental insiders fear that CEO Karl-Thomas Neumann has too many important tasks facing him to be able to fix the powertrain unit.
Along with being Continental CEO and chief technical officer, Neumann also heads the powertrain division, which lost 73.5 million in 2007. A Continental source said the 2008 results will be even worse.
Who can turn the powertrain division around, while Neumann holds Schaeffler Group owner Maria-Elisabeth Schaeffler at bay?
Neumann was looking for a successor at the head of the powertrain division, but sources say he stopped the search because outsiders were skeptical about the future of a unified Schaeffler and Continental.
But there may not be time to wait. The powertrain division needs much more management attention soon, a Continental source said.
The unit has been losing key contracts from loyal customers to its rivals. Both GM and Daimler have gone outside for their supply of lithium-ion batteries, even though Continental was a leading candidate.
Meanwhile, Neumann has to report to Volkswagen CEO Martin Winterkorn on the status of the companies cooperation on a small diesel engine for the upcoming Polo. Insiders say that Continental is late on the development.
If Schaeffler and Continental combine their automotive businesses, there will be even more work for Neumann.
Hell need to quickly find someone to take care of the important powertrain operations.