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ZF has finalized a comprehensive package of measures with its general works council and the IG Metall union. The agreement facilitates the restructuring of the company’s Electrified Powertrain Technology division (Division E), which will remain an integral part of the ZF Group, aiming to strengthen its long-term competitiveness.
Key Highlights
- The agreement enables the restructuring of the Electrified Powertrain Technology division (Division E), which remains part of ZF.
- Company-wide measures will generate immediate cost savings, totaling more than €500 million by 2027.
- A 7,600 job reduction in Division E is expected by 2030, with a common goal to avoid lay-offs.
- Some employees will see a 7% reduction in weekly working hours until the end of 2027.
- The corporate realignment will focus on product range development and ecosystem partnerships.
A New Path for Division E
Following intensive negotiations, the agreement lays the foundation for a strong position in the global drive market. A complete carve-out of the division is no longer being pursued. Instead, the division will focus on restoring the competitiveness of its existing products through restructuring and pursuing ecosystem partnerships for sub-areas to drive innovation and growth.
As part of this refocus, development activities for product groups like on-board chargers, DC converters, and electric beam axles (eBeam) will be discontinued. Conversely, the development of innovative products, such as the ZF thermal management system (TherMaS) and the 8HP evo plug-in hybrid transmission, will be consistently driven forward. The company and employee representatives will also reassess the purchasing of electric motors and inverters.
Personnel and Cost Reduction Measures
A primary focus of the agreement is managing the necessary job reductions through a comprehensive package of personnel measures. Initial reductions over the next three years will be achieved through existing offers like partial retirement and a new severance program, supplemented by training and transfer measures to support employees in their professional reorientation.
The agreement also includes company-wide measures for immediate cost savings. The 3.1-percent wage increase for hourly employees in Germany, originally scheduled for April 2026, will be postponed until October 2026. The annual salary review for graded employees will be discontinued, and certain collective bargaining components will be converted into free time or eliminated. For employees in Division E in Germany and at the Schweinfurt and Friedrichshafen sites, weekly working time will be reduced by around 7 percent until the end of 2027.
Shared Commitment and Future Outlook
Leaders from all parties involved have expressed that the alliance creates transparency and represents a shared responsibility to navigate the industry’s transformation. Mathias Miedreich, CEO of ZF, stated the goal is to strengthen the company’s position as a leading technological player. Achim Dietrich, Chairman of the ZF General Works Council, noted that it was crucial for the passenger car powertrain to have a future at ZF and that the carve-out of Division E is now off the table. The common objective is to ensure that motivated employees work on innovative products and keep ZF at the forefront of technology.
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