Slumping sales of electric vehicles have forced German auto parts maker ZF Friedrichshafen AG to make job cuts, according to reports. The cuts are in response to “changes in the mobility sector, especially in the area of electric vehicles.”
“The workforce in Germany will be reduced by 11,000 to 14,000 jobs from the current level of around 54,000 by 2028,” ZF announced. report According to France 24.
The decision to cut jobs – equivalent to between a fifth and a quarter of the company’s workforce in Germany – was made “in response to changes in the mobility sector, particularly in the area of electric vehicles”, as suppliers struggle to adapt.
ZF CEO Holger Klein reportedly called the job cuts “difficult but necessary.”
“Given the seriousness of the situation, decisive action is necessary to help the company adapt to a challenging market and competitive environment,” Klein said.
The CEO added that ZF’s restructuring was necessary to “strengthen our competitiveness and strengthen our position as a leading global supplier.”
According to France 24, Klein also cited strong competition from foreign companies, cost pressures and sluggish demand for electric cars as reasons why the company needed to restructure its electric motor division.
Klein said Chinese manufacturers are “very competitive” and are outperforming others in the growing EV market.
ZF’s CEO said making motors for electric cars has “low margins” and the company is struggling to “cross-finance” from its conventional and hybrid vehicle business into pure electric drives.
Furthermore, the switch to EVs is reducing demand for “transmissions for conventional and hybrid vehicles”, a segment in which German manufacturers usually do very well.
At the same time, the current “clear weakness in demand for purely electric vehicles” has left ZF with overcapacity in an area where investment is booming.
Still, Klein insisted that “the future is electric vehicles” and vowed to continue “investing heavily in this area.”
Meanwhile, the European Union is reportedly looking to ban the sale of new fossil fuel-powered vehicles by 2035, which will make some jobs in the industry redundant.
In addition to ZF, other German companies in the industry, including Bosch, Continental and Webasto, have also announced job cuts.
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