Some 20% of Germany-based ZF's revenues currently come from North America– from supplying components for everything from automobiles to heavy-duty trucks

ZF keeps North America in sharp focus

July 10, 2014

ALDENHOVEN, GERMANY. ZF Friedrichshafen AG (ZF) showed off several of its here and now as well as future technologies this week to international journalists during its International Trade Press Conference 2014 here at the Aldenhoven Testing Center.

Topping the list of the technologies displayed was the new TraXon transmission, expected to be available in 2016 in many parts of the world, although initial plans do not call for a U.S. release, and the company’s Innovation Truck 2014, which will be on display at the upcoming IAA Commercial Vehicle show in Hannover, Germany, Sept. 25 through Oct. 2.

While many of the technologies on display at the event are not, or will not, be available to U.S. truck operators, North America remains an important part of ZF’s portfolio, said Fredrik Staedtler, senior executive vice president, commercial vehicle technology.

ZF employs 72,000 people worldwide, with 7,237 of those in the U.S. But, Staedtler said, that presence could grow as innovative technologies it develops come to the U.S. and other markets as part of ZF’s “design to market” strategy. That approach, he said, involves leveraging global markets and global partners to produce components that can be adapted to the unique challenges of local markets.

This is particularly challenging these days due to shorter innovation cycles and “OEMs reducing their dependency on suppliers by reducing [the number of suppliers used],” said Staedtler. “What this means is we must provide a [breadth of products] that are reliable.”

In addition, “commercial vehicles must be …economical and commercial vehicles must use resources in the most economical way possible.”

Staedtler told FleetOwner that the North American market remains important, in fact, approximately 20% of  ZF's revenues currently come from North America– from supplying components for everything from automobiles to heavy-duty trucks. Among the 122 global ZF facilities are 22 locations in North America, including facilities in Guadalajara, Mexico, and Gainesville, GA.

Just Thursday news broke that ZF had approached Livonia, MI-based TRW Automotive Holdings about a potential takeover. TRW is the largest car safety equipment supplier, according to Bloomberg, and has annual sales of approximately $17 billion.

“The company is evaluating the proposal as well as other strategic alternatives which may enhance stockholder value,” TRW said in its statement to Bloomberg.

ZF would only confirm that there is interest in TRW but there is no agreement and no further comments would be issued.

So, clearly, interest is there in expanding the ZF business, particularly in North American. When asked whether that would have an opportunity to grow its truck transmission market share in the U.S. as an independent competing with both Eaton and Allison as well as the growing trend to more proprietary drivetrain systems from OEMs, Staedtler believes there is a place for the company.

“ZF is really quite open for cooperative work as long as we can support it,” he said. “I think for ZF, the main challenge is to cater to the unique solutions for the OEMs and the market. Therefore, we need to have troops on the ground and a good supply base.”

And that is one important part of the company’s “design to market” strategy.

“[Solutions] need to come out of North America,” Staedtler added. “At the end of the day, the timing is completely determined by the business cycle.”

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