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Business

Continental Sales Down but Beat Expectations

German tire-maker Continental said Monday that net income in the second quarter fell to just under €92 million ($111 million) from €108 million a year earlier. Those results beat analysts' expectations, and the company says full year operating profit will rise this year. The CEO of Continental, Manfred Wennemer, has only one ingredient in his recipe for success - - a relentless cost-cutting program. It's the rationale behind the German tire-maker's mass relocation of production into countries like Russia, where labor costs are much lower. Production facilities in western Europe were shut down, despite heavy resistance from the workforce and politicians. The money saved was reinvested, in more lucrative businesses, such as manufacturing automobile brake systems. Continental hopes the diversification strategy will ease its dependence on the tire business.

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