The incoming CEO of ZF, Mathias Miedreich, has announced a comprehensive restructuring and further reductions within the company’s struggling powertrain division. Speaking to the Frankfurter Allgemeine Zeitung, Miedreich emphasized the necessity of addressing ongoing losses, stating that collaboration with other companies is unsustainable without demonstrable improvement.
The restructuring will be driven by two key considerations: make-or-buy decisions and production volume optimization. Miedreich acknowledged a contraction in the automotive market compared to the pandemic era, resulting in overcapacity, particularly in the electric mobility sector. “We need to reduce this surplus to secure the future for our employees working within the powertrain division” he stated.
Previously, decisions regarding the future of the powertrain division were postponed until the end of September. This timeframe allows Miedreich to collaborate with the company’s General Works Council to develop a solution for the business segment, which includes the production of both conventional and electric transmissions. The discussions will focus on identifying core competencies and determining which components ZF should continue to manufacture in-house versus sourcing externally. The goal is to enhance the competitiveness of ZF’s systems in areas where it possesses strength, specifically in transmissions, electric axles and range extenders.
Miedreich indicated a joint venture or carve-out of the powertrain division remains a possible outcome. A focused partnership remains a possibility if ZF can confidently secure the competitiveness of the division. Otherwise, broader restructuring options, including joint ventures, will be explored.
Addressing the ongoing debate surrounding automotive industry regulations, Miedreich advocated for a more flexible approach. He dismissed the notion that electric mobility represents the sole solution and highlighted the growing importance of hybrid systems. “Hybrid systems are now the primary development axis, forming the foundation for everything else” he said, suggesting the question of the optimal powertrain solution remains open.
The Board of Directors recently appointed Miedreich as the new CEO, replacing Holger Klein, effective in early October. The rationale behind the change, according to the Board, centers on Miedreich’s demonstrated decisiveness and communication abilities.
Prior to his appointment, Miedreich described himself as prioritizing honesty and transparency in his approach to leadership, emphasizing the importance of clear communication regarding difficult truths to maintain trust and engagement.
