German supplier ZF said Tuesday that it will retain internal production of electric motors and the associated inverters used in electric vehicles, but that doing so will necessitate further cuts to its workforce.
The company reviewed the option of outsourcing those components versus continuing to manufacture them within its own operations. That assessment was carried out in cooperation with employee representatives and was part of a larger program of business restructuring.
Following the review, ZF concluded that keeping production in-house was the appropriate route to maintain competitiveness. At the same time, the company announced that this path would require "several hundred" additional job eliminations beyond prior reductions. ZF emphasized it will avoid forced redundancies where possible.
Context from within the industry
ZF framed the move against a backdrop of heavy investment across European automakers and suppliers in new technologies. The company noted that electric vehicle adoption had progressed more slowly than many had projected, although demand is currently rising. Those dynamics were cited as part of the environment in which the company carried out its internal evaluation and broader restructuring.
Recent workforce actions
In October, ZF agreed to reduce its headcount by 7,600 positions under the scope of its wider overhaul. The company did not disclose the precise tally of additional roles that will be cut as a result of the decision to preserve in-house electric motor production.
What the announcement means
By opting to keep manufacturing electric motors and inverters internally, ZF is signaling that it views those operations as strategically important to its competitiveness. However, the company also made clear that maintaining those capabilities will require further workforce adjustments, the scale of which remains unspecified beyond the description of "several hundred" positions.
ZF said employee representatives were involved in the evaluation process and reiterated an intention to limit forced redundancies where practicable. Beyond that, the company provided no additional detail on timelines, locations affected, or the specific functions that will be altered.