Competition and Growth: A Contemporary History of the Continental AG (review)

Paul Erker portrays the world’s fourth largest rubber company as one whose products are much more elastic than its markets, in which products, business organization, and labor processes have had to bend and stretch to survive the global competition of the last twenty-five years. Erker’s contribution is a solid overview of the corporation’s efforts, but readers of this journal will still want a much more thorough analysis of technology in the laboratory, on the production line, and in the market.

Throughout his summary of Continental’s first hundred years, Erker traces several lines of continuity in the face of changing circumstances. From its founding in 1871, the firm relied on a strong commitment to science-based research and development, patent licenses, and global subsidiaries to build and retain its hegemony in the European rubber market into the 1930s. When forced changes to its research and product mixes during the two world wars and the Nazi autarky resulted in Continental’s loss of technical leadership, the firm repeatedly combined vital information won from cooperative agreements with major rubber companies abroad to regain European technological and market prominence. But the artificially protected economies of the 1930s through the 1950s helped retard Continental’s efforts with its mature bias-ply technology. In the 1960s, the firm increasingly competed in productivity, cost management, and advertising.

The radial tire revolution sparked by Michelin in the 1960s encouraged both change and continuity at Continental. It brought new reliance upon the auto industry in terms of technology, profit, and growth, and it intensified competition in the rubber industry. But Continental also relied on trusted techniques to meet the Michelin challenge. Through cooperative agreements with foreign firms, in-house technology, mergers, and reorganization after earlier technological shifts (pneumatic tires in the 1890s, American cord technology in the 1920s), Continental had led Europe in 1913 and 1931. In the radial revolution, the company once more used mergers (Uniroyal’s European branch and General Tire), reorganization along product lines, and Japanese and American planning and production ideas. It also renewed efforts to gain technological parity through its own new tire engineering, tire chemistry, and automotive systems.

The book’s strengths are Erker’s overall analysis of the last twenty-five year period, which is solidly based on much oral and written documentation from principal actors, and his larger analysis of the reaction to the Michelin challenge and of the many corporate techniques within an increasingly global business world. Especially strong are the sections focusing on reorganization and finance efforts. Continental invited Erker to write this book, and he states that the firm did not interfere in the research or the writing of it. His interpretation is on the whole a balanced one, although he could have been more critical of a few of the company’s major decisions. The English translation is a good one and will encourage comparisons with other contemporary corporations, particularly in regard to labor and corporate policies in postwar Germany.

Despite these contributions, the book falls short in some areas. Erker does not delve into the backgrounds of key company officials, some of whom were directly influenced by American managerial methods. He concludes that large acquisitions do not automatically lead to improved market positions, but he does not systematically explore the scientific and technical contributions of Uniroyal’s European division or the technological backwardness of General Tire. Although he concludes that size no longer guarantees success, it certainly helped Continental in the 1980s to 1990s. His inclusion of a few advertisements from the pre-World War II era only tempts us to ask for an analysis of advertisements in the Michelin battle.

Finally, a book of this breadth lures historians of technology to ask for a more synthetic study of the failure of Continental and the major tire firms to perceive the threat from radial tires. Although Erker’s treatment is more thorough than other recent business history accounts of...