The main reason for this bloodletting is its high debt, following several acquisitions, including those of the American equipment manufacturer TRW in 2015 and the brake manufacturer Wabco in 2020. In fact, ZF, which achieved 46 billion euros in turnover in 2023, pays hundreds of millions of euros in interest for the credits taken out.These purchases were intended to enable it to better prepare its transition to electromobility.says Ferdinand Dudenhöffer, founder of the private research institute Center Automotive Research (CAR). But since it is 93.8% owned by the Zeppelin Foundation, which refused to allow it to go public, the company cannot proceed with a capital increase, which limits its financial resources.».
Electricity collapse in Germany
Founded in 1915 on the shores of Lake Constance, the group had also not anticipated the collapse of the German electric vehicle market. According to the statistics institute Destatis, 524,000 vehicles of this type had been sold in Germany in 2023. After the government coalition abruptly ended the purchase premium at the end of 2023 due to the budget crisis, this figure fell to 184,000 between January and June 2024.German politicians are destroying electromobility“, protests Ferdinand Dudenhöffer, who also mentions the procrastination in Brussels regarding the ban on the sale of new thermal cars in 2035. This does not send a clear signal to consumers, while at the same time, manufacturers have invested massively to switch to electric.
«Added to this are material prices, high interest rates and new competing countries like China.“, adds Frank Göller, automotive expert at the Horváth analysis firm. In 2023, the German automobile industry delivered 320,000 vehicles to China, compared to 280,000 Chinese brand cars imported to Europe. But for 2024, due to the low prices of Asian brands, the ratio is starting to reverse: for 2024, the number of Chinese vehicles sold in Europe could rise to 440,000, compared to 295,000 German electric cars sent to China. “Cost optimization is therefore today the priority of German manufacturers who are passing on unparalleled pressure to their direct subcontractors.” he continues.
Officially, through its 14,000 job cuts, ZF does not intend to abandon electric but wants to adopt a more agile structure to adapt to market fluctuations and the fact that the manufacture of electric motors requires less labor than their thermal equivalent. This readjustment of strategy also plans to focus on long-term growth segments, such as “commercial vehicles, chassis and spare parts,” as the company explains.
Risks of relocation
For its part, the IG Metall union goes further and accuses ZF in a press release of “planning to establish the production of many new products for e-mobility abroad, where costs are lower”. ZF had already announced at the beginning of the year that it would close the plants in Gelsenkirchen at the end of 2024 and in Eitorf by 2027. Now, employees also fear for the future of the gearbox manufacturing plant in Saarbrücken, which employs nearly 10,000 people. More broadly, “Without political support, we are not at the end of the waves of layoffs throughout the automotive industry“, prophesies Ferdinand Dudenhöffer. A few days ago, Volkswagen announced that it would not renew the contracts of 1,000 employees at its Zwickau site, dedicated to electric vehicles.
Source: www.usinenouvelle.com
