Germany's ZF to keep electric motor production in-house but with fewer staff

• ZF will cut hundreds of jobs at its Schweinfurt and Auerbach sites in southern Germany, which currently employ over 1,000 people combined
• The decision comes after ZF assessed production strategy with employee representatives as part of broader business restructuring that already included 7,600 job cuts announced in October
• European carmakers and suppliers face pressure from heavy investments in new technologies amid slower-than-anticipated electric vehicle uptake, though demand is now picking up

Summary: ZF to Retain Electric Motor Production Despite Additional Job Cuts

German automotive supplier ZF has decided to maintain in-house production of electric motors and inverters rather than outsourcing, but the move will require hundreds of additional job cuts beyond previously announced reductions.

Key Facts:

• Decision: ZF will keep electric motor and inverter production internal after assessment with employee representatives
• Job Cuts: Hundreds of additional positions will be eliminated at facilities in Schweinfurt and Auerbach, southern Germany, where over 1,000 people are currently employed
• Previous Restructuring: This follows 7,600 job cuts already agreed in October as part of a broader business overhaul
• Approach: Company aims to avoid forced redundancies wherever possible

Market Context:

The decision comes as European automakers and suppliers face challenges from slower-than-expected electric vehicle adoption, despite recent demand improvements. ZF, like many competitors, has invested heavily in new technologies to support the EV transition but must now adjust operations to remain competitive amid softer-than-anticipated market conditions.

Implications:

The retention of electric motor production signals ZF's commitment to controlling critical EV component manufacturing, likely viewing it as strategically important for long-term competitiveness. However, the additional workforce reductions underscore ongoing pressure on European auto suppliers to reduce costs and adjust capacity to match actual EV market growth. The decision affects Germany's industrial workforce and reflects broader challenges facing the European automotive supply chain as it navigates the transition to electrification while managing profitability pressures.