ZF cuts up to 14,000 jobs – focus on electric drive division – electrive.com

ZF currently employs around 54,000 people in Germany. By the time the announced restructuring programme is completed in four years, there could only be between 40,000 and 43,000 employees left. According to ZF, the move is justified by the need to increase competitiveness and “respond to the changes in the mobility sector, particularly in the field of electromobility.” ZF intends to make use of the demographic structure of the workforce and employee turnover when cutting jobs, for example, through “extensive partial retirement offers.” At the same time, “severance programs are also conceivable.”

According to the German supplier, it has chosen the strategic guiding principle of ‘Strengthening strengths’ for this structure reorganisation. Thus, investments in the Commercial Vehicle Technology, Chassis Solutions, Industrial Technology, and Aftermarket divisions will increase. As the Electrified Drive Technologies division is doing less well, costs will be cut there.

With the major acquisitions of TRW in 2015 and Wabco five years later, ZF also took over and continued to operate numerous locations in Germany. These will now be merged into location networks. “This currently small-scale location structure is now being transformed into a sustainable and leaner location network structure in several phases,” the company announced. It does not mention the exact locations or affected employee numbers at the locations affected. According to ZF, that “is now being specified.” As recently as June, ZF had ruled out redundancies at the Friedrichshafen site until 2028.

“Our corporate responsibility is to position ZF for the future and to further develop our locations in Germany in such a way that they are sustainably competitive and solidly positioned,” says ZF CEO Holger Klein. “We are aware that we also must make difficult but necessary decisions to achieve this. But we want to come up with the best possible solutions for everyone involved.” The company has repeatedly pointed out that restructuring or closure is also possible if it cannot find a long-term perspective for individual locations or their competitiveness cannot be permanently improved.

One focus of the strategic realignment is on the Electrified Powertrain Technologies division – only a few days ago, Stephan von Schuckmann, the member of the Board of Management responsible for this division, announced his retirement at the end of July, albeit for family reasons. ZF now writes: “The global market segment for passenger car drives is highly competitive and subject to strong cost pressure. This makes it difficult to cross-finance purely electric drives, which often still have low margins, with drives for conventional and hybrid vehicles. The shift towards electromobility will also lead to a decline in the volume of transmissions for conventional and hybrid vehicles.” It continues: “Another consideration is the current glaring weakness in demand for purely electric vehicles, which is leading to overcapacity in the electric-powertrain production lines that have been set up with high investments.”

ZF does not want the realignment to be understood as the end of its electric mobility ambitions, but rather as an adaptation to the intensified market and competitive environment. “Despite the current market situation, one thing is clear – the future belongs to electromobility. We have made proactive investments here and will continue to invest heavily in this area,” explains ZF CEO Klein. However, the changed market perspective and high competition for electrified powertrain technologies also require openness to cooperation as well as strong partnerships. “In addition to our own commitment – that is, to make further progress in electric mobility – we also need to examine these options.”

zf.com