ZF plans to establish location networks

Realign corporate structure ZF plans to establish location networks

2024-08-08 From Stefanie Eckardt | Translated by AI 3 min Reading Time

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ZF Friedrichshafen will realign its corporate structures. The automotive supplier wants to strengthen the areas of commercial vehicle technology, Chassis Solutions, Industrial technology, and Aftermarket. As part of this, the company plans to merge the German locations into several location networks. The number of employees in Germany should also be reduced by the end of 2028.

ZF plans to make its German locations more efficient and merge them into several location networks.(Image: ZF Friedrichshafen) — ZF plans to make its German locations more efficient and merge them into several location networks.
(Image: ZF Friedrichshafen)

"Our corporate responsibility is to position ZF for the future and to further develop the locations in Germany in such a way that they are sustainably competitive and well positioned. We are aware that we also have to make difficult, but necessary decisions. We want to find the best possible solutions for all those involved," explains Dr. Holger Klein, CEO of ZF. With the now planned, necessary site consolidation in Germany, the company continues the basic idea of the collective agreement Transformation closed in 2020, which provided for the analysis of the individual locations and the products manufactured there, as well as the development of target images. They are based on the basic idea of making the sites more competitive and flexible, aligning personnel planning consistently with the expected demand, and focusing on products that secure the sites as long term as possible. If it turns out that no long term perspective can be found for individual sites or their competitiveness cannot be permanently improved, restructuring or closure is also possible—ZF has repeatedly pointed this out.

Efficient production network

The Friedrichshafen-based company therefore wants to create a high-performance production network on the one hand, and optimize research and development areas on the other. This also includes adapting capacities to the still expected weaker market demand. Through the new site network structure in Germany and the simultaneous adjustment of capacities in the production as well as administrative areas and in research and development, the number of employees in Germany is to be reduced from currently around 54,000 to 11,000 to 14,000 by 2028, depending on the further development of the markets and the conditions at each site. The extent of reductions at the sites will be specified by the company in the near future. The reduction should be socially acceptable, if possible, by using ZF's demographic structure of the workforce and fluctuation. A higher degree of automation and the consistent use of digitalization should also contribute to improving competitiveness.

Weak market development for electric vehicles

The Division of Electrified Drive Technologies is particularly in focus of the realignment. In the market segment of car drives, there is global high competitive and cost pressure, which complicates the cross-financing of the often still marginally strong purely electric drives by drives for conventional and hybrid vehicles. With the shift towards electromobility, the volumes of transmissions for conventional and hybrid vehicles will also decline. This development also has to be taken into account in this context. This is compounded by the currently weak demand for purely electric vehicles, which leads to overcapacities in the production lines for electric drives, which were set up with high investments.

In light of these factors, ZF will review and improve the procedures, processes, and structures in the Division of Electrified Drive Technologies with a special focus. "Despite the current market situation, it is clear: the future belongs to electromobility. We have made an advance payment here and will continue to invest heavily in this area," Klein explains. However, the changed market perspective and high competitive pressure for electrified drive technologies also require openness to collaborations and strong partnerships. "In addition to our own commitment—to make further progress in e-mobility—it is also necessary to check these options."

Serious situation

"The seriousness of the situation demands decisive action to adapt the company to the intensified market and competitive environment and to fulfill the foundation's mission to secure the future," Klein emphasizes. "We want to continue to strengthen the robust core of ZF. For this reason, we are working on a more agile setup of the company to better respond to rapid market changes. With the measures now decided, we want to strengthen our competitiveness and consolidate our position as one of the world's leading supplier companies." (se)

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