German firm Continental Corp. assured its operations in the Philippines will not be affected by the restructuring of its global operations.
In fact, the Philippines may in the future win more business.
But Glenn Everett, vice president and general manager at Continental, noted the importance of the Philippines’ retaining its competitiveness as a location in terms of tax incentives.
Continental Corp. closed five of its factories due to the electrification of cars where demand for sensors that go to automated driving has gone up dramatically, putting other technologies obsolete.
According to Everett, the Philippine factories make safety electronics such as those for automatic braking, ride stability, wheel speed sensors and radar, lidar and optical sensors used in vehicles with autonomous driving.
Continental’s two factories in the Philippines supply almost all original equipment makers in the world, mostly those located in Japan and Korea and a bit of China, Europe and North America.
With fast turnover of technology and car platforms running just five years, Continenal has to come up with new products to keep up.
Continental in the Philippines has local staff working on research and development as well as a design center that makes new products for one of its segments. It also has two industrial engineering centers one of which designs new machines for new products.
With automated driving becoming more common, Everett is hopeful the Philippines will be able to capture more business to support such technology.
The company, he said, is hopeful the Corporate Income Tax and Incentives Rationalization Act will be resolved in a positive way to end the uncertainty in the business environment.
“We) make decisions when (our) customer needs our products. If there is uncertainty, it counts against us here,” he added.
When asked if the company will add more investments in the Philippines, Everett said “if the environment is positive we will definitely add. If the environment becomes uncompetitive, we’ll not. We are competing every day for business. If our costs artificially increase, we will become uncompetitive,” he said.
Since the company has operations in over a hundred locations, it can easily shift production to meet customers’ needs.
Under the current proposal of the Citira, Everett said exporters have significant tax increases which will hurt their competitiveness.
Continental in the Philippines has 2,500 employees.