Automotive component supplier ZF is planning to close two manufacturing plants and cut up to 12,000 jobs from its German workforce, according to the head of its general works council, Achim Dietrich.
The planned cuts, which represent almost a quarter of ZF’s Germany-based employees, are claimed to be part of a broad-based transformation strategy being initiated at the company, which is eyeing the relocation of R&D operations as well as manufacturing activities to lower-cost countries in Eastern Europe, India and China.
Founded in 1915, ZF specializes in the development and production of gearboxes, differentials and internal-combustion-engine-based drivetrain solutions. However, it is now faced with the task of altering its operations to focus more heavily on electric drive systems, automated driving functions and automotive software solutions.
“We want to maintain jobs, but we know that the transformation to e-mobility alone will cost jobs,” ZF says in a statement.
ZF’s human resources manager, Lea Corzilius, says the German company is relying on retirements, a reduction in temporary workers and natural fluctuation to achieve the job cuts but would not provide official job cut figures.
The transition to electric-vehicle component development and production has required large investments by ZF. However, its volumes and margins have been hit by a slowdown in worldwide vehicle sales and production following the COVID-19 pandemic and associated supply chain problems.
Further weighing on ZF’s profitability in new business areas is the slow acceptance of EVs in established markets such as Europe and the U.S.
