FRIEDRICHSHAFEN (dpa-AFX) - Like much of the industry, automotive supplier ZF is facing profound problems. Weak demand, high debt, falling profits, and the costly transition toward electromobility are putting massive pressure on the company. Today (from 10:00 a.m.), the group will present its annual financial statements for 2025 in Friedrichshafen on Lake Constance. These are its biggest construction sites.
Crisis in the automotive industry
According to ZF, the production of cars and light commercial vehicles worldwide has fallen significantly since 2018. Like its competitors Bosch, Continental, and Schaeffler, Germany's second-largest supplier is therefore suffering from a lack of orders from manufacturers and high costs for the transition to electric motors.
When the company's customers, such as Volkswagen, BMW, and Opel parent Stellantis, are not doing well, the supplier also feels the impact. In addition to automatic and manual transmissions, the company's portfolio includes chassis components, steering systems, drives, brakes, and safety technology.
Core business with major problems
The powertrain division, internally known as "Division E," is particularly in focus. Parts of the sector are considered uncompetitive. This division deals not only with electric drives but also with hybrid technology and classic internal combustion engines.
This specific division is suffering from the sluggish ramp-up of e-mobility, while at the same time high costs and low margins in the traditional transmission business are weighing on results. Worldwide, about one in five ZF employees works in this division. In 2024, it generated nearly a quarter of the group's revenue.
A spokesperson for the foundation-owned company said that ZF is on the right track with the division. "After years of losses, things are now looking up." An agreement has been reached with the employee side to develop the division through its own efforts. This would mean that a spin-off, at least, is off the table.
Debts in the billions
ZF has been on a shopping spree in recent years - and that has cost a lot of money. In particular, the acquisitions of automotive supplier TRW and brake specialist Wabco must be processed. Net liabilities recently amounted to around 10 billion euros. During the low-interest phase, financing was still relatively cheap. However, interest rates have risen significantly since then.
Red ink and job cuts
ZF's net loss in the 2024 financial year amounted to more than one billion euros. Revenue fell by eleven percent to 41.4 billion euros - 5.2 billion less than in the previous year. Operating profit adjusted for special effects also slumped by 900 million euros compared to 2023, standing at only 1.5 billion euros.
For the supplier, cost-cutting is the order of the day, especially at German locations. By the end of 2028, the company intends to cut jobs on a historic scale: up to 14,000 positions are to go in this country. Several thousand have already been eliminated since the beginning of 2024. The working hours of many employees have also been reduced.
What happens after 2028 remains open. "We are investing in the areas that are already successful today, and we are restructuring and developing the areas that are not yet successful," it was stated last year. Targeted cuts are necessary./bak/DP/zb
