Interview with Dr Ralf Cramer, CEO of Continental China
BY SANDY STRASSER
(Published in The Produktkulturmagazin issue 4 2015)
Realising dreams of mobility, that is the credo of Continental. As a company acting globally, it creates, develops, produces and markets indispensable technological solutions. Continental was founded as a public limited company in 1871 in Hannover under the name Continental-Caoutchouc und Gutta-Percha Compagnie. In the main plant in Hannover, soft rubber products, rubberised fabrics and solid tires for carriages and bicycles were manufactured. The first successes in development and production were celebrated: production of ‘pneumatic tyres’ without profile for cars began in 1898. Six years later, Continental was the first company in the world to develop ‘profile tyres’ for cars. Continental AG has become a public limited company which has over 200,000 employees at over 200 locations in 53 countries. Dr Ralf Cramer, who lives in Shanghai, is a member of the Executive Board of Continental AG and Chairman of the Executive Board of Continental China. He has opened the doors for us and granted us a glimpse of his daily life at Continental and the life he leads in China.
Dr Cramer, how long did it take you to settle in Shanghai?
Honestly spoken, it took me some months to settle down in Shanghai, which is a megacity with 24 million people. It’s a very different place compared with Germany from the perspective of traffic, language and climate, etc. Although everything is different, but after the initial period I am nicely settled in. I have to say Shanghai is an impressive place to live – with only some exceptions. But we really miss the natural environment and green scenery.
What especially fascinates you about this metropolis?
There are many reasons that Shanghai fascinates me. Firstly, it is a fast-developing city and in the past 20 years the city has had a huge change with its especial innovative spirit. Secondly, I’m really impressed with its charming traditional culture in many parts which are not even seen by people on short trips, and in Shanghai you can feel the melting of tradition and modern world like nowhere else in the world. Thirdly, Shanghai is a sleepless town and ‘Always On’ 24/7, round the clock, which can also be exhausting after a while. Everything seems in motion here like people, architecture, infrastructure development, which is like the Continental slogan ‘The Future in Motion’.
What were the reasons for your relocation?
China is the largest automobile market in the world. It’s the growth engine for the world and Continental as well. But also in other areas of industry. Continental has set up the goal to increase Asian sales from a current 20 percent to 30 percent by 2020 with focus on China. The high expectation of China is the reason for placing an Executive Board member in the country to better understand the customers’ requirements and people’s needs and to put this into practice in our products. With all respect, the country deserves a high focus.
China is the world’s largest market. What do you think accounts for the tremendous momentum of this country?
China has the largest population around the world with more than 1.3 billion, which is, itself, a huge market. Furthermore, China has a centrally controlled government with extremely fast decision-making systems. We have been able to see this again with the reduction of vehicle tax for cars up to 1.6l. The effects on the market became visible in the following months. In addition, people here are highly motivated, open to the innovative technology and have the desire to develop.
Why is this location of so much interest for industrial enterprises?
China is the largest market with nearly 20 percent of the population of the world, full of business opportunities. Although recently the economy of this country has been slowing down a little, we are still expecting a high GDP growth rate in comparison to other markets such as Europe and the USA. From the long-term perspective, we are confident in this market. Also, China has a long history and great culture, which is a good basis for a solid term development. Whatever, we still face many challenges, such as wage cost increases, availability of highly-skilled employees and the great challenge of avoiding the ‘middle income trap’.
What specific tasks do you have to master there? What time framework is designated correspondingly?
The main points are growth, cost management and personnel development. In general, one third of my time contributes to managing the growth. For excellent customer relations you have to be on location. Our customers are spread far and wide across this huge country and a lot of travelling is necessary in order to visit them. The second thirds have concentrated on keeping the cost in a rapidly-growing environment under control. Two-digit wage increases are still wanted centrally in order to continue supporting consumption. Compensation is only possible with dramatic productivity rises in plants and central functions. Our level of quality is already at a worldwide standard. At the same time, the complexity of new technologies and the diversity is growing significantly. I spend the rest of the time training our talents in key positions. Such a large market can only be lead long-term by a large number of local top managers. It is only as a result of this that a sustainable and continual growth is possible. Of course, the very different culture plays an important role.
In your opinion, what significance is attributed to creativity and individualism there?
Creativity, whether for progress of a company, an industry, even a country, is very important. China is moving from volume to value, and the ‘Made in China 2025’ strategy proposed by the Chinese government has expressed its goal to transform China from a manufacturing giant to a worldwide innovative production landscape. The manufactured products are of course to be developed in China. Continental therefore lays great emphasis on creativity as only then can we be innovative.
The four core values of the company fit in perfectly – trust, freedom, acting for one another and passion to win. The local education system still has a long way to go. That is why we are putting a lot of emphasis on a lot of internal trainings.
What needs to be done by Continental to actively promote these attributes and thus further democratic freedom?
In line with its strategy ‘in the market for the market’, Continental also aims to use R&D in China for China, which means having local R&D competence to encourage local creativity, support Chinese business growth and less dependency on Germany or other regions. Continental has four values and one of them is Freedom. Freedom and personal responsibility are the roots of our company’s growth. We strengthen our vitality and sustainability by granting the greatest possible freedom to our employees early on in their career and encouraging them to use that freedom. At every level, we promote their enthusiasm in that they self-organise their work and assume responsibility for the results. That’s why we are also much loved by young talents.
When we make decisions, we follow the global strategy, but we could adapt it based on the actual situations and make a fast decision in the strategic framework. Also, Continental encourages local IP-protection and awards for local development.
Continental currently produces at 26 locations and thus employs over 23,000 people. Please describe to us the kind of workers encountered in China.
We met many workers in many different areas, such as rubber tires/CTech, electronics, hydraulics, mechanics and software, etc. We have many different competences and characters in the company to deal with different work. The most important thing is that the employees should have a great educational background, whatever they do at Continental. Among other things we provide support for them with internal training. We are creating a comprehensive talent training system. We also have in-house academies such as for CBS (Continental Business System) in several locations across China which focus more on leadership and management with standardised Conti methods.
What do you like about them?
I highly respect their motivation and highest engagement. In Germany we say “You don´t need to carry the dog to hunt” – they just go. We have achieved a good working atmosphere. It’s just fun for people to develop with Continental.
What dreams and ideals do they have?
Just like Europe had in the 50/60s, the Chinese have a dream – a better quality of life in many ways. With some examples like quality of environment, safety, comfort, etc. Environmental protection is an increasingly pressing issue in China which affects not only the current generation, but generations to come. It is imperative that public and private organisations concentrate on sustainable development.
Furthermore, safety is a fundamental element of a high standard of living. China is already the largest vehicle market in the world and it is forecasted that the volume will grow further towards 30 million by end of this decade. Given the large volume of traffic and long time people spend in cars, road safety and health inside and outside the vehicle, as well as comfort have become a huge growth opportunity.
To what extent can Continental as an employer help to get a little closer in reaching them?
Continental help Chinese people better accomplish the ‘Chinese Dream’. We provide an optimized and comprehensive talent training system for our employees to better develop their career and finally achieve better quality of life.
What does a normal working day look like for you?
50 percent or more of my working time is on the business trip, visiting customers, plants, government officials, industry associations, etc. 15 percent of my time focuses on communication and visits of German headquarters. The remaining part is for developing the business strategies and our people in the organisation. I personally like seeing what the value of the day was for me and the company in the evening.
During the daily rush hours many of the main roads in Shanghai are congested. Do you arrive at the office in the morning on time and relaxed?
Normally I arrive at the office quite early because Shanghai is not congested always and everywhere. But I can understand that many of our people who commute with the subway see that quite differently. When 20 million people are on the move every morning, that is an extremely immense challenge. Here, there is room for improvement in a megacity like Shanghai. Your time plan of a day is totally different compared with Germany.
Where do you want to be with Continental in five to ten years from now?
I cannot tell whether I will still be in Shanghai during that time. But I would like to see the company growing healthy further and integrating itself even more into the Chinese society and being recognised as a great German technology brand with deep local Chinese roots. This is what gives Continental the long-term added value.
Asia is the cradle of many civilisations. Please describe your personal impression of the great diversity.
Each country in Asia has a different language and culture. I have had the chance to visit different Asian countries and have experienced quite diversified culture. China is developing very fast and catching up with Japan and Korea. For the culture – there will definitely be no copy. There will be a Chinese way which we in the west should all better understand.
What impulses have you personally absorbed and why?
If you want to understand Asia, you need to deep dive into different countries separately. This is what I do in China now. But also China is not China and very diversified throughout the different cities and provinces. For instance, in Beijing, Shanghai, etc. - first tier cities - you can feel the fast rhythm lifestyle, and the relatively high standard of living, while in smaller cities in the interior of the country, people still have great potential for catching up. Therefore a strategy, even in a country like China, cannot be generalised and has to be set up in a diversified manner. It is sometimes like time travel in one single country.
What can Germany learn from the lives of the Chinese? In your opinion, in what areas do we urgently need to catch up?
China has 600 million smartphone users and Chinese people are eager to get the fast developing new technologies with their functions and usage. But I am not saying that this is all only good, because people should communicate more face to face. But we, Germans respectively Europeans have to be careful to keep pace in that trend. We are not exactly the first and quickest when it comes to the use of new services. This equally applies to the use of the technologies and services in the car. There are too many large projects in Germany which are discussed for much too long, are talked to death and are either put into practice very late or not at all. Here we can really learn from the Chinese.
What do you advise young, ambitious people who see their personal future in becoming an executive in the industry?
You need to know what you want in the mid or long-term and must have the patience to wait for suitable opportunities. But then, to make consequent decisions and focus on your actual job, do it right first, rather than thinking about the next job opportunity. Learning on the job and at the same time being courageous, taking responsibility and risks are pre-requisites. If you can search for a mentor to guide you and you can learn from him, that’s a great thing.
In this respect, what will requirement profiles look like in the future? What personal characteristics should aspirants bring?
Ambitious young people who want to become an executive in the industry should feature entrepreneurial spirit, understand diversified culture difference – in companies acting globally - have the international perspective and passion for the job – which means you must do things you like, and last but not least be open for changes. Changes are like a law of nature, not only for us.
How do you prefer to spend your free time?
Basically I like to spend my free time with my family – and on private trips. In order to remain fit I have even found a cycle route in Shanghai where you can cycle at a justifiable speed.
What do you miss most about your home country Germany?
I miss the green land of Germany with fresh air, quiet countryside environment and some relatives and friends who I can only meet a few times per year.
DR RALF CRAMER
Dr Ralf Cramer is a member of the Executive Board of Continental AG and President & CEO of Continental China. He was born in Ludwigshafen, Germany in 1966. He studied Mechanical Engineering in Kaiserslautern and at Stuttgart University, Germany. Dr Cramer has extensive experience in the automotive industry. In 1996, for example, he joined ITT Automotive Europe, Frankfurt, Germany, as Executive Director for Industrial Engineering worldwide. In 1999, he became General Manager of the Car InterMedia Systems Division for Grundig AG Nürnberg, Germany. Since 2009, he has been a Member of the Executive Board of Continental AG. In 2013, he was appointed as President & CEO of Continental China to head the company’s business in this growth market.
Picture credit © Xu Ruosi (Peter Xu)