Major German automotive supplier claims freeze in demand for cars has resulted in “severe financial losses”
German automotive parts and technology giant ZF is set to cut up to 15,000 jobs over a five-year period due to a “freeze in consumer demand”, reports claim.
An internal memo written by ZF CEO Wolf-Henning Scheider and seen by Reuters claims the firm will make “heavy financial losses in 2020” as a result of “the demand freeze on the customer side”.
“These losses threaten our financial independence,” Scheider wrote. “The crisis will last longer, and even in 2022 we will fall noticeably short of our targets for sales”.
Those 15,000 jobs represents around 10% of the workforce of ZF, a highly respected supplier that engineers gearboxes, hybrid drivetrains, electronic systems and a host of other parts for car makers including BMW, Jaguar Land Rover and Porsche.
ZF also has operations across the UK for parts, servicing and repairs. The company has yet to confirm the reports.
The majority of the supplier’s sales are made in Europe, with China only counting for around a fifth of its annual turnover. While sales are recovering there, it’s expected to be some time before the same happens here.
The news comes after Renault announced today that it would axe a similar number of jobs due to financial woes caused by the coronavirus pandemic.