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The automotive supplier ZF Friedrichshafen is deep in crisis. With billions in debt and planned massive job cuts, the company is facing major challenges.
Friedrichshafen – The automotive industry is in an increasingly critical situation, which is also affecting more and more automotive suppliers. A prominent example is the global automotive supplier ZF Friedrichshafen, which is struggling with billions in debt, disappointing business results and necessary savings. It was recently announced that 1,800 jobs would have to be cut at the Saarbrücken site by the end of next year. In addition, thousands more jobs will be lost across Germany. Achim Dietrich, the head of the company’s works council, had alarming words about the situation: “The situation is very, very, very serious.”
Crisis at ZF Friedrichshafen: Billions in debt, job cuts – “The situation is very serious”
In Saarbrücken, ZF Friedrichshafen produces transmissions for cars with combustion engines, hybrid vehicles and electric cars. Despite new production lines for the electric car sector, the facilities are not operating at full capacity due to a decline in orders. A total of around 10,000 employees work for the automotive supplier at the Saarbrücken location. The company employs around 168,700 people worldwide at 162 production sites in 31 countries, as the company website shows.
The automotive supplier ZF Friedrichshafen is planning massive job cuts. Up to 14,000 employees could be affected. © Bernhard Classen/imago
In the 2023 financial year, ZF Friedrichshafen achieved sales of 46.6 billion euros. However, the company recently had to revise its sales forecasts downwards and now expects sales of between 40 and 42 billion euros, instead of the previously forecast over 42 billion. This increases pressure on the company to take further austerity measures to ensure its economic stability.
Auto supplier ZF Friedrichshafen is planning job cuts – works council boss speaks out
ZF works council boss Dietrich criticizes the planned job cuts as “wrong”. He argues that only about 15 percent of production costs are personnel costs. In less labor-intensive areas such as electromobility, these costs are only five to eight percent. Dietrich is of the opinion that the problem is not the employees, but the frequency of crises: Corona, delivery problems, rising energy costs.
Dietrich had already emphasized how serious the situation is and called on the board to negotiate. “Our goal is clarity for employees before the end of the year,” he is quoted by Wirtschaftswoche. He would like to clarify how many employees are affected by the cuts and how many have to go on short-time work.
Job cuts in Germany: ZF Friedrichshafen wants to “close down some plants as quickly as possible”
The automotive supplier is planning massive job cuts. Between 11,000 and 14,000 jobs will be lost in Germany alone, where the company employs over 50,000 people. So far it is clear that 1,800 jobs in Saarbrücken will be affected. The savings could also affect smaller plants. When asked by BR, a company spokeswoman for ZF said that there are “some locations that do not achieve the necessary results.” According to ZF, “improvement measures need to increase competitiveness” at these locations.
“There is a list of plants that should be closed as quickly as possible,” Handelsblatt quoted ZF general works council leader Dietrich as saying in an interview. Overall, even a third of the 35 domestic plants could be at risk. Dietrich is also critical of the job cuts with a view to the future: “Once the structures are dismantled, we will never get them back,” he warns. It should be about how to retain employees.
Automotive industry in crisis – ex-Vice Chancellor Gabriel speaks out
Former Vice Chancellor Sigmar Gabriel (SPD) recently criticized the federal government’s approach to the automotive industry crisis. He argues that no other country in the world would “wantonly” ruin “one of the most important pillars” of national economy and prosperity. The crisis was predictable. His concern is less with large car companies like VW, which have had to deal with many crises anyway. “I’m much more concerned about a lot of suppliers. “It’s a silent death,” says Gabriel. “Where is the outcry?” Gabriel does not understand why Germany is so “wantonly” destroying “one of the most important pillars” of the national economy and prosperity. “No other country in the world would do something like that.”
