Berlin, May 19 - ZF, the German automotive supplier, will continue to manufacture electric motors and inverters internally but said on Tuesday that further headcount reductions are necessary to remain competitive.
The company emphasized that the decision followed a review conducted with employee representatives, which weighed keeping production in-house against buying the components from outside suppliers. ZF has already committed significant investment to new technologies. However, it and other European carmakers and suppliers have experienced a slower-than-expected adoption of electric vehicles, even though demand has begun to pick up.
As part of a broader restructuring program that included 7,600 job cuts agreed last October, ZF examined whether outsourcing these key traction components would be preferable. After the assessment, the firm chose to preserve its own production capacity for electric motors and inverters. At the same time, ZF cautioned that additional workforce reductions will be required to secure competitiveness in the evolving market.
A company spokesperson said that "hundreds" of positions will be cut at ZF sites in Schweinfurt and Auerbach in southern Germany, locations that together employ in excess of 1,000 people. ZF stated that it intends to avoid forced redundancies wherever possible.
The announcement frames the company s approach to balancing vertical manufacturing capability with cost and competitiveness pressures in a market where electrification momentum has not unfolded as quickly as investment plans anticipated. The decision to retain in-house production preserves control over a core manufacturing process while also driving a need for further efficiency measures across its workforce.
Summary
ZF will keep producing electric motors and inverters internally, after evaluating options with employee representatives. Despite prior investments, the slower-than-expected EV uptake has left suppliers and automakers adjusting capacity and headcount plans. ZF will implement additional reductions, with hundreds of job cuts expected at its Schweinfurt and Auerbach plants, which together employ more than 1,000 people.
Key points
- ZF opted to maintain internal production of electric motors and inverters following a joint assessment with employee representatives.
- The supplier has already agreed to a wider restructuring that included 7,600 job cuts last October; further workforce reductions are now planned.
- Sectors affected include automotive suppliers, vehicle manufacturing, and manufacturing labor markets in Germany.
Risks and uncertainties
- Continued adjustments in workforce size could affect operations at regional manufacturing sites, particularly in Schweinfurt and Auerbach.
- Slower-than-expected electric vehicle adoption has pressured investment returns for suppliers and carmakers and creates uncertainty over required capacity levels.
- Efforts to avoid forced redundancies add complexity to implementing the additional reductions needed to meet competitiveness goals.