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Reuters
10-07-2025
- Automotive
- Reuters
Germany's ZF to cut costs even more if car production declines, says CFO
July 10 (Reuters) - Germany's second-largest automotive supplier ZF Friedrichshafen ( plans to take even more stringent cost-cutting measures in the event that global car production declines further, finance chief Michael Frick told WirtschaftsWoche magazine. "We are below our projections," the CFO said in an interview published on Thursday, and there are indications that even fewer cars will be produced worldwide in the second half of the year. "Of course, ZF will then have to take additional cost-cutting measures," he added. ZF, which helps automakers develop gearboxes and hybrid drivetrains, has been grappling with falling sales and profits driven by weak demand and high costs associated with the shift to electric vehicles. Apart from tariffs, Europe's auto sector faces multiple hurdles, including high production costs, falling demand, rising competition from China and the shift to electric vehicles. As part of its ongoing restructuring efforts, ZF plans to cut up to 14,000 jobs in Germany by 2028, which would amount to one in four jobs.
Reuters
20-03-2025
- Automotive
- Reuters
ZF blames 'enormous pressure' on auto industry as it plunges to 1 bln euro loss
BERLIN, March 20 (Reuters) - German automotive supplier ZF Friedrichshafen plunged to a 1 billion euro ($1.1 billion) loss last year as it set aside hundreds of millions of euros for a restructuring to address what it called the "enormous pressure" facing its industry. Europe's auto sector is struggling, opens new tab with weak demand, the high cost of shifting to electric vehicles, cheap competition from China, and rising trade tensions. Stay up to date with the latest news, trends and innovations that are driving the global automotive industry with the Reuters Auto File newsletter. Sign up here. ZF, which helps automakers develop gearboxes and hybrid drivetrains, said on Thursday it had set aside 600 million euros for restructuring costs last year, primarily for staff reductions. Its debt rose to 10.5 billion euros in 2024. "The year 2024 has clearly demonstrated the enormous pressure our industry, and thus our company, is under," said CEO Holger Klein. ZF is planning to cut up to 14,000 jobs in Germany by 2028, which would amount to one in four jobs. Several smaller plants have already been closed. Last year, the workforce in Germany shrank by around 4,000 positions. "The measures initiated are necessary to position us for future growth," said Chief Financial Officer Michael Frick, adding that the restructuring would start to result in savings in 2025. ZF lowered its annual sales forecast twice last year. Sales shrank by around 11% to 41.4 billion euros, partly due to the divestment of its axle assembly business. Its return on sales fell by 1.5 percentage points to 3.6%. Adjusted for special items, operating profit fell by more than a third to 1.5 billion euros. This year will bring no improvement, with revenue expected to come in above 40 billion euros amid "continued transformation pressure and uncertainty caused by geopolitical and protectionist influences". The company's adjusted operating profit margin is expected to come in between 3% and 4% in 2025, with free cash flow at more than 500 million euros, ZF said. "The outlook for the 2025 financial year remains cautious. Economic growth is once again expected to be weak, particularly in the euro zone and Germany, and vehicle markets could remain below the previous year's levels," ZF said.
