Conti Warns Managers to Shape Up or Ship Out

In a bluntly worded letter, Continental AG tells senior staffers they must get a grip on their business units or face being fired, Reuters reports.

“This has to stop here and now,” declares the internal memo. The complaint, signed by Conti’s entire management board, focuses on half a dozen underperforming business units that have forced the company to issue two profit warnings in the past five months.

The most recently lowered guidance came two weeks ago. The company now expects revenue of €46 billion ($53.5 billion) and an operating return on sales of less than 10%. In January the company forecast revenue of €47 billion and an adjusted pretax earnings margin of 10.5%.

The letter makes the management board’s concerns—which center on the company’s electrification technology programs and unspecified warranty issues—crystal clear. The underperformers, it says, “repeatedly fail to achieve their own targets. They do not deliver what they promise. They do not shape their own destiny.”

The letter warns there will be “adjustments to management personnel” where poor performance has damaged stakeholder trust.