ZF Supplier Reports Saving Accomplishment Yet Falls Short of Goal
ZF Friedrichshafen Faces Challenges, Discusses Realignment and Potential Partnerships
German automotive supplier ZF is currently grappling with financial struggles, as revealed by the company's CEO, Holger Klein. In the first half of the year, ZF incurred a loss of 195 million euros, largely due to low worldwide vehicle production and missed orders from manufacturers.
Amidst these challenges, Klein is discussing the realignment of ZF's drive division, internally referred to as "Division E." The CEO has proposed several options for the division, including a partnership that would allow for cost and risk sharing, and potentially securing more employment.
The works council at ZF has previously protested against planned cuts and the potential spin-off or sale of Division E. The chairman of the works council, Achim Dietrich, has expressed opposition to such moves. Both options are being discussed with employee representatives, and the talks are expected to be completed by the end of September.
Klein now believes that partnering with other companies could provide further growth potential and have a positive effect on jobs in Germany. He has called for a review of EU rules for the automotive industry, expressing concerns about the phasing out of combustion engines by 2035 and its potential impact on employment.
ZF offers not only transmissions but also steering systems, drives, brakes, safety technology, and chassis components. However, Klein believes that Division E is facing a significant challenge due to its lack of competitiveness in certain areas and the delayed rollout of e-mobility, high costs, and low margins in the traditional transmission business.
As part of the efforts to offset the company's losses, management and the Gesamtbetriebsrat of Division E are discussing reorganization options. These include strategic restructuring and efficiency improvements, but specific detailed measures are not yet available.
ZF is currently in the process of cutting thousands of jobs in Germany. The CEO, Holger Klein, has stated that the company has reached approximately 5.8 billion euros in savings, but has not yet met its self-set target of six billion euros for the years 2024 and 2025. Klein does not expect 2026 to be better, but believes that the company is catching up with the measures taken.
As of the end of June, ZF's net debt was around 10.5 billion euros, primarily due to the acquisition of automotive supplier TRW and brake specialist Wabco. A restructuring without a partner is also a possibility, but would require stronger measures to increase profitability.
In conclusion, ZF Friedrichshafen is navigating challenging times, with the CEO exploring potential partnerships and reorganization options for Division E. The company is also implementing job cuts and working towards its savings target. Klein has expressed concerns about the impact of EU rules on the automotive industry, particularly the phasing out of combustion engines by 2035.
Read also:
- visionary women of WearCheck spearheading technological advancements and catalyzing transformations
- Recognition of Exceptional Patient Care: Top Staff Honored by Medical Center Board
- A continuous command instructing an entity to halts all actions, repeated numerous times.
- Oxidative Stress in Sperm Abnormalities: Impact of Reactive Oxygen Species (ROS) on Sperm Harm