Continental Buys Motorola Auto Electronics

German supplier Continental AG is acquiring the automotive electronics business of Motorola Inc. for $1 billion.

The sale includes Motorola's controls, sensor, interior electronics and telematics units. The operations will be plugged into Continental's Automotive Systems Div., which specializes in active and passive safety devices such as electronic stability control.

Continental Chairman Manfred Wennemer emphasizes the acquisition is aimed strictly at growing the company's business and product portfolio and says there are no redundancies that will result in layoffs or consolidation.

Wennemer acknowledges a few sales positions overlap but says there will be “hardly any” job reductions.

The acquisition will increase global sales by more than 20% but will immediately double Continental's North American sales.

“This will really put us on the map,” says William Kozyra, president and CEO of Continental Automotive Systems North America.

Motorola's automotive unit currently is part of its Networks & Enterprise business. It employs nearly 4,500 worldwide, 80% of which are based in North America. Major customers include General Motors Corp., Ford Motor Co., DaimlerChrysler AG, BMW AG and Cummins Inc.

Continental officials are particularly enthusiastic about the telematics business the company is acquiring from Motorola, which they say will enhance Continental's position as a leader in active and passive vehicle safety.

They view telematics not just as wireless voice and data communications but a series of complex technical functions, including car-to-car and car-to-infrastructure communications, remote vehicle maintenance, customer-relationship management and advanced safety.