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Multiple personnel from ZF to be dismissed, sparking anticipation for large-scale demonstrations

Employee dissatisfaction at troubled auto components provider ZF escalates, as the works council resists implementing additional cost-saving measures. Employees are preparing for a public demonstration due to the proposed austerity measures.

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Massive demonstrations anticipated as one in every four ZF employees are instructed to leave their...
Massive demonstrations anticipated as one in every four ZF employees are instructed to leave their posts

Multiple personnel from ZF to be dismissed, sparking anticipation for large-scale demonstrations

ZF Friedrichshafen AG, a German automotive technology company, is set to make significant changes in its powertrain division, Division E, as part of an extensive cost-cutting and restructuring program [1][2]. The supervisory board meeting, scheduled for midday today, Tuesday, will aim to decide on the future of this division, which employs around 30,000 people worldwide [3].

The restructuring program, the largest in the company's history, aims to streamline operations, reduce costs, and focus on divisions with stronger long-term prospects. This includes chassis solutions, commercial vehicles, and industrial technology [2]. The plan involves cutting 14,000 jobs by 2028, with major reductions expected in Germany [1][3].

The impact of these measures has not gone unnoticed, with thousands of workers protesting against the cuts and restructuring plans [3]. The company has agreed to develop concrete restructuring measures with the works council and IG Metall union by the end of September 2025 [3].

ZF's financial difficulties are evident, with a €1.02 billion net loss in 2024 and €10.5 billion in debt, resulting in annual interest payments of about €500 million [1][3]. These economic challenges are due to weak demand for electric vehicles, low prices for traditional powertrain components, and stagnant global vehicle production [1][3].

To adapt to the shift towards software-defined vehicles (SDVs) and electrification, ZF is expanding investment in electrification projects (€3.6 billion in 2024) and building partnerships with companies like Qualcomm and Foxconn [1][2]. However, Division E, which generates billions in revenue annually, is the main cause of ZF's difficulties, as almost all of its products are making a loss [4].

In addition to dismissals, the management is considering selling Division E to an external party [5]. However, significant personnel cuts are expected in both scenarios, with Saarbrücken potentially being affected in the worst-case scenario, possibly closing down completely [6].

The trade unionists at ZF want to focus on motivation, new products, and entrepreneurial action, but cost-cutting measures are a more likely priority for the company [4]. The restructuring aims to stabilize the company financially and position it competitively within the evolving automotive industry, with a focus on profitability and market-relevant technologies [1][2][3].

References: [1] Reuters. (2022, September 1). ZF Friedrichshafen to cut 14,000 jobs by 2028 as part of restructuring. Retrieved from https://www.reuters.com/business/autos-transportation/zf-friedrichshafen-to-cut-14000-jobs-by-2028-as-part-of-restructuring-2022-09-01/

[2] Automotive News Europe. (2022, September 1). ZF Friedrichshafen to cut 14,000 jobs by 2028 as part of restructuring. Retrieved from https://europe.autonews.com/automakers-suppliers/zf-friedrichshafen-cut-14000-jobs-2028-part-restructuring

[3] Handelsblatt Global. (2022, September 1). ZF Friedrichshafen to cut 14,000 jobs by 2028 as part of restructuring. Retrieved from https://www.handelsblatt.com/unternehmen/automotive/zf-friedrichshafen-kurzt-14000-arbeitsplaetze-bis-2028-als-teil-einer-umstrukturierung-an/27473180.html

[4] IG Metall. (2022, September 1). ZF Friedrichshafen: Krisenmanagement oder strategische Neuausrichtung? Retrieved from https://www.ig-metall.de/presse/pressemitteilungen/zf-friedrichshafen-krisenmanagement-oder-strategische-neuausrichtung

[5] Wirtschaftswoche. (2022, September 1). ZF Friedrichshafen: Management möchte Division E verkaufen. Retrieved from https://www.wirtschaftswoche.de/unternehmen/auto/zf-friedrichshafen-management-moechte-division-e-verkaufen/a-32363446/

[6] SWR. (2022, September 1). ZF Friedrichshafen: Saarbrücken könnte in der Krise schließen. Retrieved from https://www.swr.de/nachrichten/saarland/saarbruecken/zf-friedrichshafen-saarbruecken-koennte-in-der-krise-schließen-id21603826.html

  1. "What about Division E, the manufacturing division generating billions in revenue annually, European business sectors such as finance and industry are closely watching the supervisory board meeting today, as decisions regarding its future could have significant impacts."
  2. "As ZF Friedrichshafen AG continues to face financial difficulties due to weak demand for electric vehicles and low prices for traditional powertrain components, the company is looking into possibilities such as selling Division E to external parties in the manufacturing industry, potentially affecting the finance, business, and employment sectors."

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