For the bosses of the three largest German automotive suppliers Bosch, ZF and Continental, the already difficult tasks are growing. Demand for cars has weakened, production is stagnating and operating margins have already been relatively low in the past years. All three companies have recently announced or hinted at cutting several thousand jobs, including in Germany.

Stefan Hartung (58) has been at the top of Bosch, the world's largest automotive supplier, since the beginning of 2022. Things have been particularly tough for him since then: the coronavirus pandemic, then the start of the war in Ukraine, high inflation. And all this while the industry is still working feverishly on the transition to electromobility and has to invest heavily. "The year 2023 was more difficult than expected for Bosch," said the Chairman of the Board of Management a month ago at the presentation of the key figures. "The coming years will also demand a lot from all of us."

Bosch has postponed achieving an operating margin of 7%, which was targeted for this year or next, by one to two years. In 2023, the foundation company achieved 5%. Hartung, who holds a doctorate in mechanical engineering, explains the announced job cuts as follows: "We have to respond to the weaker order situation and work intensively on our competitiveness." This is the only way to "finance the growth of the future".

Among other things, 1,500 jobs in the development of the combustion engine segment and 1,200 in the vehicle electronics division are at risk. Hartung is also concerned about household appliances: 3,500 jobs are on the list of cuts at the subsidiary BSH due to the sharp drop in demand. But it is not only the weak market that is causing Bosch problems. There is also a home-made problem: the major difficulties in the production of 48-volt batteries for the important customer Mercedes-Benz.

ZF has also created some of its own problems, in fact a very significant one. Holger Klein (53), who has been CEO since the beginning of last year, is struggling with the high level of debt and the increased burdens due to the sharp rise in interest rates. The turnaround in interest rates has made the rapid reduction of liabilities more urgent. In the middle of last year, ZF's long-term financial debt amounted to just over EUR 11 billion.

ZF has been carrying this heavy burden since the acquisition of TRW in 2015 and Wabco in 2020. Klein therefore wants to focus on the most profitable businesses. "We are taking a close look at which product line generates which result and will have to continue to make tough decisions," he told Handelsblatt in January. The General Works Council fears that 12,000 jobs will be cut in Germany by 2030. Employees protested outside the company headquarters in Friedrichshafen in January. They accuse the management of miscalculations.

As has been known since mid-February, 7,150 jobs are to be cut at Continental in order to strengthen the competitiveness of the automotive sector, which generates the highest sales. The division, which is said to have come out of the red operationally in the past financial year, was managed by Nikolai Setzer in a dual role until the end of April 2023.

Setzer has been CEO of the automotive supplier and tire manufacturer in Hanover since December 2020. The fact that the 52-year-old industrial engineering graduate, who has worked for Continental since 1997, enjoys the trust of the Supervisory Board at the top was documented last spring with the extension of his contract by five years until the end of March 2029. Towards the end of last year, Supervisory Board Chairman Wolfgang Reitzle also emphasized that he "fully supports" the strategy of the Executive Board around Setzer.

In December, the Executive Board specified targets of sales of 51 to 56 billion euros and an adjusted EBIT margin of 8 to 11% for the Group as a whole in three to five years - after expected sales of 41 to 43 billion euros last year and a targeted adjusted EBIT margin of 5.5 to 6.5%. For the automotive sector, the strategy provides for a stronger focus on high-growth and value-creating businesses. Continental intends to create new strategic options by preparing the organizational independence of the User Experience business area (display and control units). In addition, the company is examining measures for further activities in the automotive sector with a total revenue volume most recently estimated at 1.4 billion euros.

By cutting 5,400 jobs to streamline business and administrative structures in this area, Continental aims to save 400 million euros annually from 2025 onwards. A further 1,750 jobs will be affected by measures to improve the efficiency of research and development (R&D). The R&D ratio in the automotive sector is to fall to 9% by 2028 - down from around 12% expected last year.