ZF Experiences Financial Setbacks Once More - ZF Automotive Company Records Red Financial Figures Once More
ZF Friedrichshafen Struggles Amid Automotive Crisis
The German auto supplier ZF Friedrichshafen is grappling with consecutive years of losses, as the crisis in the automotive industry takes its toll. In the first half of 2025, the company reported a net loss of 195 million euros, marking a significant setback.
The losses are primarily attributed to a combination of stagnating global vehicle production, the slow adoption of electromobility, high costs linked to the transition to electric vehicles, and a substantial debt burden from past acquisitions. The slow uptake of electric mobility and uncertainty surrounding US trade tariffs are contributing factors to lower sales and rising costs at ZF, according to ZF's CEO, Holger Klein.
Declining sales are reflected in a drop from €22 billion in the first half of 2024 to €19.7 billion in the first half of 2025. Despite this, ZF managed to increase its adjusted operating profit before interest and taxes (EBIT) to 874 million euros in the first half of the year.
The company is facing rising restructuring costs and is planning up to 14,000 job eliminations in Germany by 2028, which is about a quarter of its workforce in the country. No further details on specific job cuts were provided by Holger Klein.
ZF is also grappling with the high costs associated with the transition to electromobility. The shift to electric drivetrains involves significant investments and higher costs, impacting profitability adversely. The company's net debt stood at around 10.5 billion euros as of June 30, driven by previous acquisitions like TRW and Wabco, resulting in high interest payments that strain financial results.
The market uncertainties, including ongoing global automotive market instability, tariff-related challenges, and a slow ramp-up of electric vehicle production, contribute to the negative outlook. ZF is experiencing similar challenges as its competitors Bosch, Continental, and Schaeffler.
Despite these challenges, ZF has shown efforts to improve efficiency amid declining revenues. The company improved its adjusted operating profit margin from 3.5% to 4.4% in the first half of 2025. The divested axle assembly business is now part of the joint venture ZF Foxconn, which played a significant role in the decreased revenue in the first half of the year.
In summary, ZF's losses result from weak industry demand, costly transformation to electrification, increased restructuring expenses, and considerable debt servicing burdens amid a turbulent global market environment. The company is accelerating and intensifying its restructuring program to navigate these challenging times.
- To mitigate the financial repercussions, ZF Friedrichshafen is examining its community policy and employment policies, aiming to streamline operations and reduce costs.
- In the midst of the automotive crisis, the company's business model is undergoing a significant transformation, necessitating careful adaptation of both finance and employment policies.
