Continental and Schaeffler Join Forces

Automotive supplier Continental and the Schaeffler Group have started the first large joint purchasing project, after signing the agreement at the end of last month. The effort is meant to "optimize cost of materials and achieve an annual triple-digit million benefit through access to the steel markets and component suppliers as well as investments and non-manufacturing materials".

“The purchasing cooperation will offer everyone involved, the Schaeffler Group, Continental and our suppliers, the opportunity to benefit. The mutual build up of our purchasing activities will enable us to achieve significantly improved cost structures. This is a first important step into a successful future,” Jürgen M. Geibinger, Schaeffler Group CEO said in a release.

The combined purchasing power of the two companies amounted to roughly 20 billion euros last year. The annual purchasing volume capable of benefiting from synergies comes to about 6.6 billion euros, resulting a saving potential of 350 to 400 million euros from now through 2011.

In addition, up to 4 billion euros will be generated by investments and non-manufacturing materials, including logistics services, energy, office materials, IT hardware, telephone, travel and marketing.

Among the goals of the joint effort is the achievement of cost advantages by exchanging technology and establishing value added supply chains in the most important automobile manufacturing regions of the world.

Future plans are scaling down to 2,800 the number of suppliers of production materials, lower from the 5,600 at the moment. Schaeffler Group's cooperation with its brands INA, FAG and LuK in the manufacturing of precision engine, transmission and drivetrain components will allow both companies to pursue new opportunities in make-or-buy decisions of the future.

"This will enable us to purchase the most advanced technology with maximum quality from the best suppliers. This is an important element in maintaining the leading position of our companies in the market and transforming ourselves into a global champion of the automotive supplier industry,” added the official.
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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