ZF Friedrichashafen chairman, Hans-Georg Härter, has said the company is lowering its forecasts for the year because of worsening economic conditions.

Härter said that the company is still working hard to exceed the previous year's results, but weak US market and drastic steel price rises are having a negative effect.

High steel prices will cost the company hundreds of million euros, said Härter, while the weak US market will cost the company tens of millions.

Around 50% of ZF's purchasing is directly or indirectly affected by steel prices, according to a report from the German press agency, dpa. The US is described as the company's 'problem region, because the company is too dependent on the Big Three.

Härter would not give a detailed outlook for the year, but he did say the company was aiming for a slight three percent increase in turnover, up from 13bn euros last year. Previously Härter had been looking for a four percent increase.

Härter said that growth in Asian, east European and south American countries was holding up and that the growth rate in the so-called BRIC countries was between ten and 20 percent.

ZF turned over 12.65bn euros in 2007 and reported an operating profit of 917m euros. Net profit was 518m euros. ZF is currently reducing the workforce by around 4,000 people to 61,500. Around 2,000 of the job reductions will occur in Germany.