ERJ staff report (RPN)
Friedrichshafen, Germany – ZF Friedrichshafen A.G., Germany's third-largest automotive supplier and among the top 10 worldwide, has confirmed reports it is in the early stages of discussions to sell its rubber and plastics department, according to David Vink for Rubber & Plastics News.
A local newspaper, Neue Osnabrucker Zeitung, revealed on 22 August that ZF is looking “very closely” at a specific offer from the Chinese railway products company Zhuzhou Times New Material Technology Co. Ltd.
According to the report, ZF chief Stefan Sommer disclosed TMT's interest at a meeting attended by 800 employees in the ZF rubber and plastics headquarters plant in Damme, Germany.
TMT supplies rubber and metal suspension materials for train and other track transport systems, as well as for wind power plants. Sommer said TMT products complement ZF's rubber and plastics products in terms of market, customer and regional perspectives, stressing TMT wants to set foot in Europe.
In a statement last week and earlier in the ZF annual report, the company has expressed dissatisfaction with returns from the rubber and plastics business unit. ZF has said following consolidation in the market, competitors have cost advantages and more flexible structures than ZF.
Jurgen Weller of the IG Metall trade union told the General Anzeiger newspaper that ZF's rubber and plastics business is profitable, “but are not as high as ZF wants. But that is due to the rubber parts being dependent by nature on rubber prices.”
NOZ reported ZF's rubber and plastics department has 3,400 employees worldwide and 2012 sales of $960m (€711m), up 6 percent from 2011. Company-wide, ZF has almost 74 000 employees.
ZF rubber and plastics has 1,700 employees in three German plants: Bonn, where it has research and development, Damme and Simmern. A ZF spokesman said the company has invested $40m (€30m) over the past three years to expand the Damme plant, where about 1,000 employees make items such as rubber and plastic connectors, airbag housings, servo pump oil containers, plastic composite pedals and hydraulic supports for engines, and components for gear-changing and steering systems.
Staff expressed concerns that, as ZF has set up a rubber and plastics production site in China, TMT may be seeking German know-how just to develop further in China. A sale would require the rubber and plastics business first to be split from ZF into a separate company. Even if staff were retained, the staff expressed concerns about retaining ZF company pension rights.
TMT is listed on the Shanghai stock market and is a subsidiary of state-owned CSR Corp. TMT employs 2,700 and achieved sales of $611.8m (€452m) in 2012, up from $564.9 (€418m) in 2011.
ZF also has rubber and plastics operations in Hebron, Ky.; Scorocaba, Brazil; Shanghai; Trnava, Slovakia; and Melbourne, Australia.