ZF Friedrichshafen has reached an agreement with its works council and the IG Metall union to establish a joint roadmap for restructuring its Electrified Drive Technologies Division, known as Division E. The move follows ongoing financial difficulties within the division and aims to secure long-term competitiveness and employment stability.
The supplier said both management and labor representatives signed the agreement on 30 July, forming what it calls an “alliance for competitiveness and job security.” The initiative sets a framework for collaborative planning, with restructuring measures to be defined and finalised by the end of September.
Division E, which handles electric drives as well as conventional and hybrid transmissions, has come under scrutiny amid reports of continued losses and underwhelming demand for its electric drive products. The company said the division is at the center of strategic and economic efforts due to “its special market position and the changing industrial structure, as well as from geopolitical and trade policy influences and regulatory requirements such as the EU’s CO2 regulation.”
Although no immediate job cuts have been enacted, the division was previously identified in a company-wide announcement involving the potential reduction of up to 14,000 jobs. Internal discussions have reportedly included options ranging from spinning off the unit to a complete ramp-down of certain operations, though these remain as contingency plans.
Protests by ZF employees were held in the lead-up to the latest Supervisory Board meeting, expressing concern over the future of Division E. In response, the company has committed to collaborative restructuring. “The agreement marks the starting point for an independent and confident restructuring of Division E,” ZF stated.
Industry sources cited by WirtschaftsWoche suggest that severe measures are likely unavoidable. An unnamed company insider said that significant cutbacks, particularly in Germany, are under discussion. Financial pressures are compounded by an estimated €10 billion in debt and annual interest obligations of around €500 million, which the publication says severely limit the company’s flexibility.
To address lagging profitability in e-mobility, ZF introduced the modular SELECT drive platform in June. The system allows customisation of drive solutions using pre-integrated components including motors, inverters, and software. The company sees the platform as a path to quicker and more efficient product development, hoping it will strengthen its competitive edge in the electric vehicle supply market.
ZF said further details on the restructuring plan will be announced once the review is complete at the end of September.
