CEO De Martino: “Not just tyres, Continental Italia is also focusing on brakes and car software”

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«Safety first, our company works for this». Speaking is Alessandro De Martino, managing director of the Italian branch of Continental, a global giant with a turnover of 38 billion euros (over 300 million in Italy). But only a third are related to the production of tyres.

But in the world, your brand is known for this…
«I know, it’s an important sector, but bear in mind that half of our turnover comes from “connected cars” and related components. There are vehicles that have almost only the body produced by car manufacturers, the rest leaves our factories. There is a bit of everything, from tyres, to seat covers, dashboards, certain control units and software to make them communicate with the various connected parts».

Isn’t there a risk of wasting energy?
“In reverse. The company was founded in 1871 and has always been a public company, listed on the stock exchange. The first production was rubber hoof covers for horses in the winter season. One hundred years later, we entered the automotive sector. We are now working a lot on solutions for components dedicated to electric cars and car sharing. But let’s not forget the traditional cars too. I’ll give you an example: the Giulia Alfa Romeo is fitted with one of our new generation brakes, lighter and with better performance».

For electric cars, however, different solutions are needed…
“Of course. And we are here. I’ll give you another example: in Cairo Montenotte we have specialists who produce drum brakes for us. They are obsolete for internal combustion engine cars, but are ideal for electric ones, which must have the possibility of using braking to regenerate the batteries and consequently do not need the same stopping power as a internal combustion engine car. In the short term, the future will largely be dominated by electric vehicles, where it will be important to offer brakes with battery charging systems, together with tires with high rolling qualities, to reduce noise and consumption».

You mentioned the software earlier…
«Yes, because the software replaces the mechanical components. The benefit is considerable, in terms of savings and possible breakdowns. It is part of the “package” of systems we sell. And we’re not just talking about applied computer science to get a result. We also work to make the interfaces easy to use. Because it is not only important to have certain functions available, but also to be able to use those functions. Otherwise, they are useless. And then, there are two other issues.

«The economic discourse, first of all. Compared to components, it costs much less to produce software and also to fix any errors. Just one update and it’s done. And then, the revenue margins for the company are higher. In addition, there is the question of savings for the customer. Fewer physical components means less weight, with less weight we reduce consumption and pollution».

Speaking of pollution, rubber and plastic are among the number one enemies of the planet. what does Continental do about it?
«We started producing tires with the root of the dandelion, that flower we all know as “dandelion” or “dandelion”. They are mainly bicycle tyres, but we also do something for those intended for cars. We have been recycling plastic bottles to make tire casings for a year. In addition, 50 percent of used tires is recycled to make mats to place under children’s playgrounds in parks, or in horse racing courses to cushion the horses’ landings after jumping in competitions, or again to integrate asphalt, produce submarine cables, conveyor belts, hoses for oxygen masks or for irrigation».

Let’s change the subject and talk about critical moments. How did you deal with the pandemic?
«We applied smart working before it became a necessary measure used by everyone. And we have never had a productivity problem».

Many complain about this…
«Those who have a work ethic also take it home. We have 170,000 employees worldwide, a thousand in Italy. Over the years, we have made many hires, especially of recent graduates. We prefer to invest in personnel to be trained and developed within the company. The biggest problem during the lockdown period was maintaining a sense of community even in remote work, especially for those who had just joined Continental. I’m sorry for the interns who arrived at that time, because they weren’t able to settle in as well as possible».

In addition to hiring, are you planning any acquisitions?
«In Italy, in recent years he has made some acquisitions of small family businesses with a high technological level. I’ll give you the example of Merlet, based near Varese, a company specializing in high quality pipes. On December 2 we hope to announce the acquisition of another Italian company, specialized in industrial mouldings. This process allows us to keep the skills and know-how in Italy, which are however brought to the international market. Italy has competence, technology and inventiveness».

Was there a “Covid effect” on the company?
«Logistics is a complex subject, planning is needed. The blockade of the Suez Canal, then, gave a bad blow”.

Transportation prices have skyrocketed…
“True, but that emergency is returning.”

And the war in Ukraine?
«A lot of raw materials come from Ukraine and Russia. For one thing, the carbon black used for tyres. Before we bought it in Russia, then with the sanctions we were forced to look for other suppliers. Further away and more expensive. Among these, China.

By the way, Beijing is a formidable competitor…
«We got used to living for 20 years without inflation, because China had kept production costs down. Now, the quality level of oriental creations has risen a lot and is almost to the European standard. And producing here still costs much more».

So, is Europe doomed to succumb?
«The Chinese are one billion and 300 million and they all speak the same language. In Europe, we have different languages ​​and different cultures. The only option is to work together, not one country against another. States must make alliances and find common solutions to bring production to Europe”.

What is Italy’s place in this picture?
“As a country, we should build the future and not defend the past. This does not mean forgetting what has been, on the contrary. But the culture of small companies, of craftsmanship must be projected into the future. It is not true that “small is beautiful”, but “small” must become a passage towards “big”. And then, we need to work on the usual themes, Justice, taxes and roads. Otherwise, there will always be mistrust towards Italy».

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