Bad order situation
Mass layoffs feared at auto supplier ZF
January 17, 2024, 6:40 p.m
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The situation is not exactly rosy for the large German auto supplier ZF. According to the works council, 12,000 jobs are at risk. The company does not comment on the number, but admits: The auto industry has been in crisis for a long time. “We are knee-deep in transformation.”
The general works council of the automotive supplier ZF fears major job cuts in Germany in the coming years. The works councils said that at least 12,000 jobs would be affected. 10,000 of these could be eliminated by 2028. The ZF board presented the figures before Christmas.
The company from Friedrichshafen on Lake Constance did not want to comment on the number. Human resources manager Lea Corzilius said they would not comment on speculation and warned against scaremongering. However, ZF can understand the employees’ concerns. The order situation looks bad. The auto industry has been in crisis for a long time. Global car production has fallen since 2018. “We are knee-deep in transformation.”
And this also costs employment, said a ZF spokesman. “Where we need two employees to assemble the transmission, we only need one for the electric motors.” Management wants to speak to employee representatives tomorrow, Thursday. But the works councils don’t expect much from this. The chairman of the general works council, Achim Dietrich, calls on the board to end “the flight to low-wage countries”.
At a protest march and rally this Wednesday in front of the operations headquarters, tens of employees voiced their dissatisfaction. The possible job cuts no longer only affect production, but also purchasing, accounting, development and controlling, according to a spokesman for the general works council.
Plant closures already in North Rhine-Westphalia
ZF is one of the largest automotive suppliers with more than 50,000 employees in Germany alone. The group is majority owned by the Zeppelin Foundation of the city of Friedrichshafen. At the end of the year, the automotive supplier plans to close a factory in Gelsenkirchen that produces steering systems for cars and commercial vehicles. The shock absorber factory in Eitorf in North Rhine-Westphalia is scheduled to close at the end of 2025. Hundreds of employees are affected.
The two locations have been making losses for years, explained the ZF spokesman. It is not possible to hold on to works for which there is no long-term economic perspective. “Because the company has to reduce its debt and finance the transformation.”
According to the works council, the high level of debt is, in addition to the transformation costs, a reason for the job cuts. As of the first half of 2023, ZF was in debt for more than eleven billion euros. Most of the debt comes from purchases by the American auto supplier TRW and the brake specialist Wabcko. Given the rise in interest rates, the high level of debt is becoming more and more expensive, said the works council spokesman. The group wants to achieve part of the job cuts through retirement regulations and fluctuation. A large proportion of employees are over 57, according to human resources managers. ZF said it would be a difficult and painful process.