Continental AG (Germany; being acquired by Schaeffler Group, parent of INA and FAG Bearings) announced its third quarter net income fell to just €2.4 million from €252 million a year ago. While the company cut projections yet again, it kept its 8.5% EBIT target for 2008, excluding VDO-related costs. Conti loaded up on debt when it acquired VDO from Siemens in late 2007.

After Bosch, Continental is Europe's second-largest auto parts manufacturer. After Michelin, it is Europe's second-largest tire manufacturer.

Looking forward, things are expected to get much worse. Karl-Thomas Neumann, Conti's CEO, said: "In the last quarter, there were drastic signs of slowing in all markets, whereby the dramatic declines in Europe in particular have negatively affected us. This trend will probably become even stronger, continuing far into 2009."

Conti has not ruled out selling off divisions and/or plants, and is planning ongoing workforce reductions worldwide.

As the acquisition moves forward, Schaeffler has said it will not interfere in Continental's operations or management. Schaeffler officially bid €75 per share for Continental, but shares now trade in the €30 range and Schaeffler has bought 11.5 million for an average €65.8.