ZF Friedrichshafen AG announced a realignment of its structures in order to increase competitiveness and take account of the changes in the mobility sector, particularly with regard to electromobility. In line with the strategic guiding principle of “Strengthening strengths”, the company will further increase its investments in the Commercial Vehicle Technology, Chassis Solutions, Industrial Technology and Aftermarket divisions. The German locations are to be organized more efficiently in the future and merged into several location networks. ZF assumes that the number of employees in Germany will be gradually reduced by around 11,000 to 14,000 by the end of 2028. In view of the high competitive and cost pressure and the weak market development for electric cars, a particular focus of the restructuring is on the Electrified Powertrain Technologies division.
The extent to which reductions are planned at the locations is now being specified. As far as possible, the reduction is to take place in a socially responsible manner by utilizing the demographic structure of the workforce and fluctuation. This is to be achieved, for example, through extensive partial retirement offers; severance programs are also conceivable. An even higher degree of automation and the consistent use of digitalization should also contribute to improving competitiveness.
One focus of the strategic realignment is on the Electrified Drive Technologies division. There is very high competitive and cost pressure in the global market segment for passenger car drives, which makes it difficult to cross-finance the often still low-margin purely electric drives 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. This development must also be taken into account in this context. Added to this is the current glaring weakness in demand for purely electric vehicles, which is leading to overcapacity in the production lines for electric drives that have been set up with high investments.
The future belongs to electromobility
In view of these factors, ZF will review and improve the workflows, processes and structures in the Electrified Drive Technologies Division with a particular focus. “Despite the current market situation, one thing is clear: the future belongs to electromobility. We have made advance investments here and will continue to invest heavily in this area,” explains ZF CEO Klein. However, the changed market perspective and the high competitive pressure for electrified drive technologies also require openness to cooperation and strong partnerships. “In addition to our own commitment – to make further progress in e-mobility – we also need to examine these options.”
“The seriousness of the situation calls for decisive action in order to adapt the company to the tougher market and competitive environment and to fulfill the foundation’s mission of securing the future,” emphasizes Klein. “We want to further strengthen ZF’s robust core. This is another reason why we are working on making the company more agile in order to be able to react better to rapid market changes. With the measures we have now decided on, we want to strengthen our competitiveness and consolidate our position as one of the world’s leading suppliers.”