Dr Klaus Bleyer will stand down next month (June) as chief executive officer of ZF Friedrichshafen AG, the transmission and engine specialist. When this was announced at the annual press conference recently, a local German journalist rose to his feet to thank Bleyer for his dealings with the press and to wish him well in his retirement.
Just politeness, or genuine regard for a job well done? It doesn’t really matter. Anyone who has remained CEO of a major Tier One supplier for more than a decade deserves a long and happy retirement. Anthony Lewis reports.
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Dr Klaus Bleyer will stand down next month (June) as chief executive officer of ZF Friedrichshafen AG, the transmission and engine specialist. When this was announced at the annual press conference recently, a local German journalist rose to his feet to thank Bleyer for his dealings with the press and to wish him well in his retirement.
Just politeness, or genuine regard for a job well done? It doesn’t really matter. Anyone who has remained CEO of a major Tier One supplier for more than a decade deserves a long and happy retirement. Time to bask in the glow of a job well done.
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Dr Klaus Bleyer |
Last year was the most successful in ZF’s history, which can be traced back to 1915 when Zahnradfabrik GmbH (it translates as nothing more exciting than ‘gear maker’) was founded to make gears for the early Zeppelin airships. His successor will be home-bred Dr Siegfried Goll, an engineer who joined ZF in 1963, and is currently vice chairman of the Board of Management. Goll, 60, was born in Bregenz on the eastern shores of Lake Constance where Germany, Austria and Switzerland meet. ZF’s headquarters in Friedrichsafen, home to the Zeppelin, are on the north shore about 20 miles from Bregenz.
Goll and ZF, which he will take charge of from July 1, have travelled a whole lot further. ZF is now a genuinely global company with 40 percent of its 60 sites outside Europe.
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By GlobalDataCareful acquisition and a couple of very focused joint ventures have helped it grow without overstretching. The company reported sales had increased by 23 percent to Euro 6.5 billion from E5.3bn in 1999 largely as a result of “significantly extending its global presence,” said Bleyer.
Sales continued to grow strongly in the first quarter of 2001, up 15 per cent over the same period last year. “The first quarter looks more favourable than the global economy would have led us to anticipate,” said Bleyer. “It is entirely feasible that the growth curve will level off significantly towards the end of this year.” Its core markets remain Europe and North America which account for 90 per cent of sales.
“Last year was the most successful in ZF’s history“ |
Incoming CEO Goll promised that “nothing would change” under his leadership.
“It will be very difficult to match this benchmark year,” he said. Growth for 2001 is predicted at 10 per cent but might be only 8 or 9 per cent. “This would still be exceptional growth for the automotive industry in the current climate,” said Goll.
ZF is not just a supplier to the automotive industry. It has strong marine, aviation and agricultural equipment businesses. Last year, it took over the transmission sector of the Austrian company Steyr-Daimler-Puch AG and incorporated it in the ZF Group as ZF Steyr. This is in line with the philosophy of providing a wider range of systems solution from one source. This also contributed 11 per cent to an overall 28 per cent increase in off-road drivelines.
It also established ZF Mathers in Burlington, Washington, a production site that extend its marine activities in North America. And in Brazil, it started up ZF Lemforder do Brasil in Sorocaba to help strengthen its position in chassis technology. But ZF always has, and will continue to rule out any joint venture in its core chassis and transmission business, said Goll.
It would, however, look to JVs in modules and other non-core business. This was the thinking behind the formation of ZF Lenksysteme GmbH, the 50-50 joint venture with Bosch for power steering. “Steering systems are part of the ZF family but we don’t need to own it,” said Goll. Having an engineer in charge should reassure anyone worried about ZF’s future direction. Technological leadership is the watchword, and Goll will continue that tradition. The company annually invests between four and five per cent of its sales alone into extending research and development, placing it among the leaders in the field.
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ZF Batavia is a JV between ZF and Ford |
Investment activities last year culminated in the opening of a technical centre in Detroit, Michigan, which was officially opened in March this year. This employs 120 staff and brings together the development capabilities of four divisions under one roof, 14 years after ZF first started in the USA with just ten staff.
This move was seen as vital, according to James Orchard, ZF Group’s manager for North and South America. “If we want to be seen as a technology leader, we have to work close to the customer in every respect. And by customers we don’t just mean Ford, General Motors and DaimlerChrysler but also BMW and Toyota, for example. Development staff in Detroit no longer merely re-engineer or adapt components to suit the American market. Instead, they are creating new solutions based on existing ZF technology.”
There has also been considerable development at the Friedrichshafen site and a new development centre for chassis technology at ZF Lemforder in Dielingen, Germany.
Is there a cloud on ZF’s horizon? It is by its own admission poorly represented in Asia. Sales there last year were Euro252 million out of a total of nearly Euro6.5 billion. Even so, that represented an increase of 51 per cent over 1999.
It is forecasting a 13 per cent increase in production of commercial vehicle transmission systems for this year in Japan, offset by a one per cent fall in passenger car transmission production. If Goll sticks to the ‘no joint ventures in core business’ philosophy, it is difficult to see how ZF will expand in Asia, a market which it is notoriously difficult for an overseas company to break into.
“it is difficult to see how ZF will expand in Asia“ |
ZF does, of course, have one famous transmission joint venture and that is ZF Batavia in Ohio, due to come on stream in 2002. This is a JV with Ford in which ZF holds a 51 per cent stake. This is developing two constantly variable transmissions (CVTs) for use in front-wheel drive cars with a capacity up to 250 Nm (CVT 23) and 300 Nm (CVT 30).
Original estimates were that demand would be two-thirds in favour of the lower power output. Now that is being revised towards 50-50 demand.
The CVTs produced in Ohio will be exported by Ford to Europe and Japan. There is one other joint venture of note – SupplyOn, founded in December 2000 with partner companies including Bosch and Continental.
Klaus Bleyer saw this as a major challenge in his last year – using e-business potential to strengthen the efficiency of the supply chain downstream from the Tier 1 companies.
What was described as a ‘software bug’ has kept SupplyOn off the air for three months but it should be up and running by June.Just as Beyer heads off. That is one worry that he, and any other CEO, might be glad to be well rid off.
just-auto.com have a report reviewing the key market events for the transmissions sector:- |
