Compromise expected in Continental power struggle

Karl-Thomas NeumannHanover - German car components giant Continental was on the brink of a deal Tuesday, ahead of a crucial board meeting hoped to end months of wrangling over top positions between the company and its new owner Schaeffler.

The compromise would see Continental's chief executive Karl-Thomas Neumann step down, as well as eventually remove Schaeffler's advisor Rolf Koerter from his executive position on the board of directors.

The deal, to be finalized ahead of Wednesday's board meeting, would also see the establishment of a broadened Continental directorate.

Reports of a resolution saw Continental shares rise almost 7 per cent on the MDax stock exchange, although board members indicated that the planned deal was not yet set in stone.

The compromise is hoped to prevent a repeat of the last board meeting in July, when tempers had been fraught as Schaeffler was blocked from dumping Neumann by Continental labour leaders.

One year ago, Maria-Elisabeth Schaeffler bought Continental at a price she later admitted was far too high, and has since struggled to win management control.

Neumann's likely successor will be Schaeffler manager Elmar Degenhart. The head of Continental's car tyre division, Nikolai Setzer, is also expected to move onto the management board.

Continental's directorate currently consists of just three members. Alongside Neumann, Heinz-Gerhard Wente is head of personnel and Hans-Joachim Nikolin runs the tyre division.

A question mark still hung over the post of chief financial officer, a position that Schaeffler had wanted to fill with their head of finance Klaus Rosenfeld.

An eventual successor to Koerfer also remained to be nominated. The lawyer came under heavy criticism for his role in trying to oust Neumann during July's board meeting.

The Schaeffler company owns 49.9 per cent of Continental directly and its proxy banks hold 40 per cent. As a result of the takeover, the company skirted bankruptcy during the economic crisis. (dpa)