ZF Supplier in Trouble: Uncovering the Root Cause
In a significant move, Mathias Miedreich has been appointed as the new CEO of ZF, effective October 1. Miedreich, who has been a member of the ZF board since January 2025 and heads the "Electrified Drivetrains" division, takes over from Holger Klein and Peter Laier, who announced their departure from the company by September 30.
Miedreich's appointment comes as ZF faces challenging times, with the company announcing a massive reduction in jobs. Around 14,000 jobs are set to be cut in Germany alone by 2028. The new CEO has suggested a restructuring of the company, with further cuts in the struggling drivetrain division.
Miedreich sees the "Division E" as a rough diamond that needs to be polished, and has major challenges regarding the powertrain division. He has stated that stopping the losses at ZF is a necessity and that capacities in the area of electric mobility are too large, necessitating cuts to ensure the future of the employees working in this division.
The outgoing CEO, Holger Klein, laid the foundation for ZF's turnaround with his strategy and achieved significant successes. His departure, along with that of Peter Laier, has raised concerns among industry experts. Ferdinand Dudenhöffer, for instance, has questioned the reasons for the departure of successful managers and the continuation of the strategy by a former board member.
Dudenhöffer also expressed concerns about the risks to banks' engagements with ZF due to the personnel changes. He criticized the Zeppelin Foundation for its role in preventing ZF from going public and contributing to the current situation.
ZF Supervisory Board Chairman Rolf Breidenbach, however, emphasized the importance of building on what has been achieved and continuing the chosen strategy. He stated that it is crucial to ensure the future of the company and its employees.
Miedreich has been credited by ZF employees for his open and transparent communication style. He has postponed the decision on the future of the drivetrain division until the end of September, giving him time to find a solution for the business area with the works council.
One possible solution for the future of "Division E" could be a complete spin-off and integration into a joint venture with a partner. Smaller partnerships may also be considered as an alternative. The investor who has historically supported ZF is the city of Friedrichshafen, which holds significant ownership through its associated foundation and has influenced company strategy and leadership changes. This local political and financial backing could continue to play a role in any future realignment of ZF.
The personnel changes at ZF may lead to a significantly more difficult situation for the company in the current tough and difficult car market, according to Dudenhöffer. He fears that the debt of ZF may become even more pressing and that attracting new investors may be difficult due to the increased risk.
Despite these challenges, Miedreich remains optimistic about the future of ZF. He has stated that they are currently sticking to the number of job cuts, but what happens after 2028 remains to be seen. The new CEO is determined to steer ZF through these challenging times and ensure a bright future for the company.
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