German Auto Supplier ZF Plans Wind Power Division Spin-Off Amid Industry Restructuring

German automotive supplier ZF is preparing to spin off its wind power division into a separate entity, CEO Mathias Miedreich told the Handelsblatt business newspaper on Wednesday, outlining his strategy to streamline the company., according to ET Auto. He stated this could deliver technical, strategic and financial benefits, following the disposal of ZF's autonomous driving technology unit in a $1.8 billion deal with Samsung Electronics in December.

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ZF, Germany's second-largest automotive supplier, is currently cutting thousands of jobs as it grapples with a slowdown in production, the transition to electric vehicles (EVs) and steep tariffs.

Miedreich told the paper that he believes ZF, founded in 1915, is adapting well as electronics assume a greater role in automotive production.

"The cure that ZF needs is not rocket science," he was quoted as saying in the report, adding that increasing cash flow to reduce debt was a priority.

ZF's restructuring will involve value adjustments for unprofitable orders, resulting in a book loss of 1.5 billion euros ($1.80 billion), according to the CEO. He also expects sales to decline by a fifth following the restructuring.

The strategic moves reflect the broader challenges facing traditional automotive suppliers as the industry undergoes fundamental transformation driven by electrification and digitalisation.