German company ZF announces the dismissal of almost 25% of its workforce

ZF is one of the world’s leading experts in automatic gearboxes for the automotive world, and they supply gearboxes to many manufacturers.

And according to what I have read in the news, ZF has announced a reduction in staff of almost 25%, which could affect around 14,000 people between now and 2028. And that is a very significant reduction, when automotive companies are still making money.

But the future that lies ahead is very complex, since electric cars do not need gearboxes, and ZF is forced to change its product in the not too distant future.

The automotive industry is experiencing a rapid transition to electric vehicles. ZF, traditionally a supplier of components for internal combustion engines, is struggling to adapt to this new reality and has had to make significant investments in electric technology.

Today the automotive industry is in crisis, and although some companies are obtaining good economic results, the transition to electric cars in Europe is a very big question mark for companies, who see Chinese brands starting to install electric car manufacturing plants in different European countries. And I suppose that ZF (like others) is taking measures to try to optimize its cost structure.

ZF is seeking to increase its competitiveness in a constantly evolving automotive market. Laying off part of its workforce is a measure to reduce costs and ensure long-term sustainability. Although it is a very harsh measure.

I understand that ZF’s decision is a reflection of the current situation of the global automotive industry. The company is working to adapt to the challenges and opportunities of the market, and this measure is considered necessary to ensure its future, although the workers will not be happy about it.

According to what the experts say, manufacturing an electric car requires 30% less labor, and this is something that has to come sooner rather than later. And if companies react late, as they are doing so far, they will favour the penetration of Chinese companies in their markets, and the results will be worse for them.

Defending themselves by asking their respective governments for high tariffs is a short-sighted policy, and they will pay for it before long.

Could we be witnessing the swan song of the European automotive industry?