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A fresh wave of job cuts is sweeping across Germany’s car suppliers with companies including Bosch and ZF Friedrichshafen racing to reduce costs as they struggle with an expensive transition to battery-run vehicles.
Bosch, the world’s largest automotive supplier, on Thursday said that up to 1,200 employees in its software and electronics division would be let go by the end of 2026, citing high inflation as well as increased raw material and energy costs.
These trends were “increasing the necessary expenditure” and slowing the transition towards EVs, the Stuttgart-based company said. Nearly 80 per cent of the expected job cuts are set to take place in Germany.
Bosch’s announcement comes amid rising tensions between ZF’s management and its employee representatives, as the maker of transmissions, chassis components and shock absorption systems considers job cuts by 2030 as part of a restructuring programme.
ZF, which employs about 165,000 people globally, said 12,000 jobs could be lost in a “worst-case scenario”. About 3,000 ZF employees on Wednesday protested against the cuts, taking to the streets of Friedrichshafen in south Germany, where the company has its headquarters.
“We want to maintain jobs, but we know that the transformation to e-mobility alone will cost jobs,” ZF said, adding that some electric vehicle components required half the labour to make compared with the combustion engine equivalent.
The transition to EVs has required large investments by Germany’s network of automotive suppliers. However, the companies are seeing margins being hit as the slow uptake of battery-run vehicles has dragged out the transition phase while overall car sales remain historically low.
ZF is in a particularly difficult position, as acquisitions of tech-focused rivals TRW in 2015 and Wabco in 2020 have left it with high debt levels.
The company, which reported net debt of €11.5bn at the end of last June, said the need to rapidly reduce borrowings had been part of its recent decision to close two German production plants. This led to the loss of about 800 jobs, angering unions.
Both Bosch and ZF now face long negotiations with labour representatives who, as required under German law, sit on companies’ supervisory boards and whose support is required to move ahead with restructuring plans.
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