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Employees

 

Our HR policy focuses on supporting and qualifying our employees.

Numerous human resources development programs
 In addition to local orientation programs, we offer new graduate employees a detailed overview of the corporation with the Corporate Entry Program. Different training offerings in the program give them the opportunity to expand their qualifications. The core of the program is the Corporate Entry Conference, which took place eleven times worldwide in 2010.

Sixteen talent diagnosis workshops were held around the world in 2010 to identify and foster talented future managers. The goal is to bring out the strengths and development needs of the participants and assess their potential for middle management positions.

New managers are prepared for their new duties in the Leadership Entry Program. In addition to strengthening their social and leadership skills, they learn about the company-specific management culture and are introduced to various management tools in a training session. The training concept is carried out in several countries and adapted to regional and cultural differences if needed.

The International Management Program was conducted for the 16th time with 35 up-and-coming managers taking part in the year under review. In this program, management skills are taught by an internationally- renowned business school and applied and reflected on while working on challenging company projects. Early in July 2010, the eight international teams presented their projects to the Executive Board and others.

In cooperation with external partners, the Corporate Executive Development Program took place for the third time for experienced middle managers. The program focuses on strategy, value creation and leadership.

In the year under review, a comprehensive program was launched in the tire factories to prepare and implement standardized requirement profiles and training manuals for all relevant work processes. In addition to establishing a quality standard for the training process, training evaluation and certification, the program also creates a training network to further mutual support and a speedy interchange of projects.

International assignments on the increase
Employee assignments (commitments of between six months and five years in a foreign country) are taking on an important role in the globalization of our company. Around 800 employees were sent to Continental locations abroad in 2010, for example to support new locations or cover management needs. The trend has been rising for years. Except for a slight drop in 2009, the number of international assignments has increased steadily. The front runner at the regional level has long been Asia with more than 30% of all assignees. The largest "assignee population" is in China with over 160 employees. Around 60% of all assignments were from Germany, while the other 40% were from other countries (third-country assignments).

Making these assignments happen, which is highly complex in terms of taxes, social security and residence permits as well as being challenging for all involved, is undertaken according to a global guideline that ensures fair, attractive and optimal structuring of the foreign assignment from a cost point of view. The central management of all international assignments ensures smooth processing and highly satisfied assignees. This is also confirmed by the results of the biennial satisfaction study and the statements of the return assignees, according to which 90% of those surveyed would recommend an international assignment to their colleagues.

Professional training as a basis for future learning behavior
 Professional training is an important part of human resources development at Continental. Our competitiveness is highly dependent on the qualifications of our employees. Initial professional training qualifications are systematically given at the companies, as they are also the foundation of learning behavior for one's further professional life.

Professional training today faces a wide spectrum of challenges. Fast-spreading new technologies have reached companies of all sizes, which raises questions of qualifications there. Demographic change makes it increasingly difficult to find persons suitably qualified to fill jobs in the companies. The shortage of skilled employees and qualification bottlenecks in operations are signs of this development that are visible even now. For this reason, Continental will concentrate more in the coming years on the qualitative and quantitative structure of its professional training to not only react to but proactively deal with relevant technological and labor market developments.

We are currently training 1,837 (PY: 1,831) young people in Germany and 2,414 (PY: 2,322) young people worldwide in about 20 technical and commercial professions. We are also offering high school graduates the opportunity to combine theory and practice in 17 dual courses of study.

Continental on site – at colleges and universities
To acquire talented and motivated junior staff, it is important to go where you can find them: at colleges and universities. That is why Continental is represented at colleges and universities with various activities. Our Germany-wide activities are bundled in the Key University Concept. We are speaking directly to students at around 30 (mostly technical) colleges and universities. For example, we come in contact with them through our participation at career fairs or through employees who are active ambassadors at these schools. More than 500 employees worldwide are active ambassadors.

Continental also used the 2010 FIFA World Cup™ in South Africa to make this student target group aware of career possibilities at the company. As an official sponsor, we organized around 20 public showings of the games at select partner institutions of higher education, thus reaching over 10,000 students.

Contact with students at international colleges and universities was also further intensified in the year under review. The inclusion of the renowned Tongji University in China now makes nine universities in the network of the Global Engineering Excellence internship program. This initiative, launched in 2005, allows Continental to dedicate itself to training the next generation of engineers for the global workplace.

Marketing at colleges and universities is becoming more important not least because of the shortage of skilled workers. Of the 1,500 university graduates and young professionals expected to be hired worldwide in 2011, around 80% will have technical degrees, so effective marketing at colleges and universities is of vital importance.

 

Structure of the workforce Dec. 31, 2010 Dec. 31, 2009
Total number of employees 148,228 134,434
    thereof permanent staff 135,802 127,321
        outside Germany 92,666 84,249
        in Germany 43,136 43,072
Trainees* 1,837 1,831
Female employees in %* 21.9 21.9
Average years of service to the company 14.6 14.0
Average age of employees* in years 42.1 41.8
* in Germany

 

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Continental Value Contribution (CVC). The CVC represents the absolute amount of additional value created, and the Delta CVC represents the change in absolute value creation over the prior year. This change in the absolute contribution measured by Delta CVC allows us to monitor the extent to which management units generate value-creating growth or resources must be employed more efficiently. The CVC is measured by subtracting the weighted average cost of capital (WACC) from the ROCE and multiplying this by the average operating assets for the fiscal year. The weighted average cost of capital calculated for the Continental Corporation corresponds to the required minimum return. The cost of capital is calculated as the weighted average ratio of the cost of equity and borrowing costs.

Currency swap. Swap of principal payable or receivable in one currency into similar terms in another currency. Often used when issuing loans denominated in a currency other than that of the lender.

Defined Benefit Obligation (DBO). DBO is defined as the present value of all vested and non-vested benefits calculated on the basis of estimated salary levels at retirement. The only actuarial method that may be used to calculate the DBO is the projected unit credit method. DBO corresponds to PBO (projected benefit obligation).

Derivative financial instruments. Transactions used to manage interest rate and/or currency risks.

Dividend payout ratio. The dividend payout ratio is the ratio between the dividend for the fiscal year and the earnings per share.

EBIT. Earnings Before Interest and Taxes. EBIT represents the results of operations. Since 2002, when the amortization of goodwill was discontinued, EBITDA has been equal to EBIT.

EBITA. EBIT before scheduled goodwill amortization.

EBITDA. Earnings before interest, taxes, depreciation and amortization.

Finance lease. Under a finance lease, the lessor transfers the investment risk to the lessee. This means that the lessor bears only the credit risk and any agreed services. The lessee is the beneficial owner of the leased asset. Finance leases are characterized by a fixed basic term during which the lease may not be terminated by the lessee.

Gearing ratio. The gearing ratio represents the net indebtedness divided by total equity, expressed as a percentage.

Hedging. Securing a transaction against risks, such as fluctuations in exchange rates, by entering into an offsetting hedge transaction, typically in the form of a forward contract.

IAS. International Accounting Standards.

IASB. International Accounting Standards Board. The authority that defines the International Financial Reporting Standards.

IFRIC. International Financial Reporting Interpretations Committee. Committee that reviews and determines appropriate treatment of accounting issues within the context of IFRS and IAS.

IFRS. International Financial Reporting Standards. The accounting standards issued by the IASB.

Interest rate cap. An interest rate cap sets an upper limit for a variable interest rate in relation to a notional debt amount. To the extent that the variable interest due on the underlying debt exceeds the cap amount, the holder of the cap receives income as compensation in the amount of the difference to the cap. An up-front premium is paid as consideration for the cap.

Interest rate swap. An interest rate swap is the exchange of interest payments between two parties. For example, this allows variable interest to be exchanged for fixed interest, or vice versa.

Net indebtedness. The net amount of interest-bearing liabilities as recognized in the balance sheet, cash and cash equivalents, the positive fair values of the derivative financial instruments as well as other interest-bearing investments.

Operating assets. Operating assets are the assets less liabilities as reported in the balance sheet, without recognizing the net indebtedness, discounted trade bills, deferred tax assets, income tax receivable and payable, as well as other financial assets and debts.

Operating lease. A form of lease that is largely similar to rental. Leased assets are recognized in the lessor's balance sheet and capitalized.

PPA. Purchase Price Allocation. PPA is the process of breaking down the purchase price and assigning the values to the identified assets, liabilities, and contingent liabilities following a business combination. Subsequent adjustments to the opening balance sheet – resulting from differences between the preliminary and final fair values at the date of initial consolidation – are recognized as "PPA adjustments".

Rating. Standardized indicator for the international finance markets that assesses and classifies the creditworthiness of a debtor. The classification is the result of an economic analysis of the debtor by specialist rating companies.

ROCE. Return On Capital Employed. We define ROCE as the ratio of EBIT to average operating assets for the fiscal year.

SIC. Standing Interpretations Committee (predecessor to the IFRIC).

US GAAP. United States Generally Accepted Accounting Principles. These principles are subdivided into binding and guiding principles.

Weighted Average Cost of Capital (WACC). The WACC represents the weighted average cost of the required return on equity and net interest-bearing liabilities.