In some passages, it is a speech of blood, sweat and tears as Holger Klein reviews the year 2024 and looks to the future. „We have no other option than to shake the foundations of ZF, to thoroughly scrutinise this great company and find out together what the path to a good and promising future is,“ warned the CEO of the automotive supplier at the recent annual earnings press conference. He emphasised his words by waving his hands up and down.

As in previous years, the event was held exclusively online. Klein (55), wearing a dark grey suit, white shirt without a tie and blue-rimmed glasses, spoke to the camera, saying "we are fully aware that this involves a great deal of effort and that we demand a great deal from our employees.“

The company plans to cut 11,000 to 14,000 jobs in Germany by the end of 2028. ZF has already made good progress on this path in the past year. This is how Klein sees it. At the end of December, there were still 52,000 jobs in Germany – around 4,000 fewer than a year earlier. As a countermeasure, the works council launched the „Ideenschmiede“ (think tank) initiative last autumn. The employee representatives estimate that the more than 750 savings and efficiency proposals submitted by the workforce to date have a potential of several hundred million euros.

Last year, thousands of employees reacted to Klein's downsizing plan with accusations of mismanagement and protests – both at the headquarters in Friedrichshafen on Lake Constance, and at other locations such as Saarbrücken and Mannheim. The CEO asserts that he takes the criticism and concerns about jobs and the future very seriously. He builds a bridge to the goals of the management and appeals for understanding, saying "it is therefore important to us that we secure ZF's long-term competitiveness.“

The speeches at the press conference by Klein and CFO Michael Frick have been viewed 1,869 times on the video portal You Tube. There are three comments. One author finds both board members unconvincing, since they only moaned about „the nasty customers“ who didn't want electric cars. At least he gives the two managers credit for having „at least clearly named the high costs of 10 billion in debt“. It was not just Klein and Frick who were responsible for this.

Like other suppliers and car manufacturers, ZF is not only suffering from the fact that demand for electric cars in Germany, other European countries and North America is growing much more slowly than expected and hoped for. The group is also burdened by an enormously high level of net debt: At the end of 2024, it stood at 10.5 billion euros. The equity ratio shrank to 19.2 %. The end of the zero-interest phase in mid-2022 exacerbated the difficulties: Last year alone, ZF had to pay around half a billion euros in interest. The job cuts are also expensive: provisions of around 600 million euros were recognised for restructuring costs in 2024. The bottom line is a net loss of 1 billion euros.

The high level of debt is primarily due to two acquisitions worth billions from a time when capital was very cheap to obtain: TRW Automotive, a provider of safety technology and electronics, in 2015 and Wabco, a manufacturer of braking systems for trucks, five years later. Total purchase price: More than 19 billion dollars.

Holger Klein led the integration of TRW. This went faster than planned. Klein, who holds a doctorate in industrial engineering, joined ZF in 2014 after more than 16 years as a McKinsey consultant. He became Head of the Car Chassis Technology Division in 2017. Klein has been a member of the Board of Management since 2018 and was therefore involved in the decision to acquire Wabco. Until his move to the chairmanship at the beginning of 2023, he headed the Asia-Pacific and India regions from Shanghai. He was also responsible for production worldwide.

ZF has not only run into problems with its major acquisitions. Under Klein's predecessor Henning Scheider, ZF sometimes won the competition for electromobility orders with cutthroat prices. This approach is now taking its revenge. Klein makes no secret of the major difficulties, but prefers to put it in positive terms: „There are also profitable e-mobility projects.“

By separating business divisions such as ZF Lifetec (airbags and seatbelts), and with the help of partner companies, Klein wants to make the group more agile and profitable, especially in the field of electromobility. His goal: „We want to transform the large tanker ZF into a strong fleet of manoeuvrable speedboats.“ There is a long way to go to achieve this and to reduce debt. It will still take a lot of sweat and probably tears.