No one could have foreseen a development like COVID-19. Has the pandemic forced you to change plans – or even the direction?
The future viability of our Next Generation Mobility strategy has never been questioned by the pandemic. On the contrary, we believe it has been confirmed by the social and economic impacts and we are now accelerating even more its implementation.
The guiding principle of the Annual Report is therefore “Accelerating the Transformation.” Our goal remains clean, safe, comfortable and affordable mobility for everyone and everywhere. The transformation in order to achieve this goal is in full swing and has picked up pace in 2020. Since we made the right decisions early on, we are on course today despite all the challenges.
2020 will be considered as the crisis year for the automotive supplier industry. To what extent does this apply to ZF?
ZF also faced unprecedented challenges this year, but we reacted quickly, adapted working methods or made existing processes more efficient thanks to digitalization. In terms of leadership, team spirit, structure, processes or cost optimization, the entire company has learned a lot in a short period of time. The top priority has always been protecting our employees and reliably supplying our customers. ZF’s diversification was helpful in this situation. We are active in construction and agricultural machinery, industrial as well as marine applications and one of the world’s leading companies for wind turbine components.
The localization of technologies and production in important markets, such as China, has also paid off. The pandemic initially had the hardest effect there, but China was quickly able to control the crisis in terms of society and economy. We have benefited from the continued economic upturn in this market since then.
Nevertheless, ZF also had to react adequately to the economic effects. What did the austerity measures look like?
Against the backdrop of the drastic sales decline in the first half of the year, we consistently questioned all expenditures and stopped them wherever possible. Investments were prioritized even more and only made if they paid off for ZF’s future or improved the revenue situation.
We have also used all available tools worldwide to make working hours more flexible. In Germany, we were able to conclude the “Transformation Collective Agreement” with employee representatives and the trade unions and draw on the offer of short-time work. If market developments continue to be inconsistent, we will be able to adjust working time even without short-time work and remain flexible in the future. Compensation and pre-retirement programs negotiated with the works councils were also successful and help us adjust the costs to the weaker demand.
Your R&D figures, however, do not speak for a strict austerity program.
This is true and applies to developments in our four strategic technology fields in particular. In this difficult situation, we continued to drive these fields with strong commitment and only slightly reduced investments. We are thus driving forward the transformation of the company and safeguarding ZF’s longterm future.
For ZF, 2020 was characterized by another development: the acquisition and subsequent integration of WABCO as of May. How great was this challenge?
With the acquisition of WABCO, we were able to close a major strategic gap. We are now well prepared for the market requirements with new products for e-mobility and assistance systems. Moreover, the new division has already contributed positively to our result this year. We call WABCO and ZF a perfect match. As a very successful supplier for trucks, buses and semitrailers, WABCO – or rather the new ZF division – has access to technologies that ZF did not have in its portfolio due to its history. The complementary product ranges and the different customer segments create added value to ZF and its customers.
For the commercial vehicle market as well as for the passenger car business, the increasing networking in the vehicle leads to a change from being a component suppliers to becoming a systems supplier. The acquisition represents a leap forward for ZF’s commercial vehicle business.
ZF sees itself as a driver for clean and affordable mobility. What developments should be highlighted in this area for 2020?
First of all, of course, the fast-moving electrification of the transport sector. We now have a wide range of solutions for this. And as we observe large growth rates in plug-in hybrids, we believe that our early focus on his technology is thus justified.
At the same time, the new business with our all-electric drives developed very positively last year. ZF will also be among the first suppliers to electrify trucks and buses, as we already have corresponding orders.
But electromobility does not only pay off for ZF with regard to drives: With our regenerative braking systems, we significantly increase energy recuperation so that energy for up to 150 kilometers is achieved by the braking system alone.
In addition to the drive, we also supply electric vehicles with innovative solutions for all technology fields that make modern passenger cars attractive: integrated safety concepts, systems for dynamic vehicle control and assistants for automated driving.
Has automated driving rather taken a back seat?
We have made good progress in this technology field as well. Our shuttle systems are used in public transportation via our subsidiary 2getthere, for example in Rotterdam. Further international assignments and two cities in Baden-Württemberg as of 2022 will also make the new technology tangible for many people for the first time – with ZF products.
We are delighted that we were able to win attractive orders for advanced driver assistance systems and semi-automated driving functions. It is particularly noteworthy that the ZF ProAI supercomputer is sought after by manufacturers of commercial vehicles and passenger cars for many millions of vehicles. ZF will be one of the leading providers of central computers in vehicles.
Ultimately, driving dynamics regulation is also about networking. How well is ZF positioned in this area in which software plays a central role?
Networked chassis systems are critical for the autonomous mobility of the future. Our software platform cubiX masters this networking. In order to make the driving experience in autonomous vehicles a pleasant one, the longitudinal and transverse dynamics of the vehicle must first be optimally coordinated. Jolting steering, braking or acceleration processes undermine our confidence in the capabilities of the autonomous driver. cubiX integrates numerous chassis systems such as steering, dampers, brakes and drives and ensures a comfortable driving experience.
Our customers should perceive us as the first contact for such comprehensive system solutions. cubiX is a good example of how we will offer software-based platforms in all technology fields. Together with our customers, we are working on the software-defined vehicle of the future.
In the coming years, numerous automotive manufacturers will strive for carbon-neutral production and will also demand this from their suppliers. How does ZF respond to this task?
We stand behind these goals and the 17 Sustainable Development Goals: ZF is a member of the UN Global Compact and I am a member of the “Alliance of CEO Climate Leaders,” which was initiated as part of the World Economic Forum.
As a company, we aim to be climate-neutral by 2040 – with regard to all four fields of action: direct emissions, indirect emissions, emissions from upstream suppliers and emissions from products. In a first step, we created a corporate carbon footprint that also covers commuting of employees or the use of ZF products, for instance.
What prospects does ZF have? How do you look into the future?
We have many reasons to be confident. I see good opportunities to grow above average with our orders and new products. Above all, however, we have an excellent, very committed team with a great sense of solidarity that has proven its willingness, courage and ability to change and implement new ideas more than ever. We can build on this.
