ZF Moving Regional HQ to Livonia, MI

DETROIT – Still digesting its 2015 acquisition of TRW, German supplier ZF says it will move its North American headquarters from Northville, MI, to the larger headquarters building 11 miles (18 km) away in Livonia occupied for many years by TRW.

The move will be official in April, when the Livonia building will house the North American leadership team, including Franz Kleiner, CEO of ZF TRW and board member for North America.

Also on April 1, Kleiner becomes ZF’s North American president as Julio Caspari has announced his plan to retire at the end of March after more than 40 years with ZF.

Speaking with journalists today on the eve of the North American International Auto Show press days, ZF CEO Stefan Sommer says the integration of ZF with TRW is going smoothly.

Global purchasing has been consolidated and is expected to yield €1 billion in savings over the course of three years, he says. Substantial savings also are expected as the two companies merge accounting and other managerial functions.

“We have combined already our customer interface in key account management, so it is clear that we present one face to the customer,” Sommer says. “Our business partners now are seeing the combined company and are talking to the combined company.”

As TRW, with its electronics, chassis, safety and steering systems, comes together with driveline specialist ZF, engineers from both sides are collaborating on ideas for more than 400 products that might be possible from the new organization.

“We want to improve functionality, save cost and make the technology more efficient for our customers,” Sommer says.

ZF Plans to Increase U.S. Headcount

He reassures employees on both sides of the organization that eliminating jobs is not part of the plan. “We will increase headcount in the U.S.,” he says. “And we are investing in engineering expertise in the U.S. as we see the U.S. as a growth area.”

The Northville facility will remain a base for sales teams as well as a technical center for employees working for ZF before the acquisition.

Likewise, engineers who had been working for TRW on steering and active safety programs will remain at their current locations in Livonia and elsewhere.

“We will not slow down any growth in that area or move any of those guys to any other location,” Sommer says. “We still see growth in those areas.”

ZF TRW currently employs 1,200 people in Livonia, and ZF has about 400 people in Northville.

Sommer says the Livonia site was chosen as the new North American headquarters because it is larger and a fitting location for a globally focused company.

“We anyhow were planning to expand Northville in the area of engineering capability and resources and customer interface,” he says. “So it was a quite logical decision just to make Livonia the North American headquarters.”

Sommer says he expects “sustainable growth in North America, maybe not in the same range like we have seen in 2015, but... all indicators are in a positive way.”

ZF expects to grow also in Europe and Asia as a result of healthy demand for new vehicles. Also, the TRW acquisition is opening doors to new customers, namely Ford, General Motors, Fiat Chrysler, Toyota, Hyundai, Nissan and Honda.

In China, Sommer says he expects growth in the automotive market to proceed at a lower rate but at a healthy 6% to 7%. “This is what we are really adjusting to, and which China is calling the new normal,” he says.

As rival Takata struggles through a massive recall of defective airbags, ZF’s TRW division is gaining market share and has enough extra work to require installing additional capacity both in North America and abroad. Further boosting output are new safety standards requiring more sophisticated airbags.

“We need to expand plant capacity all over the world,” Sommer says. TRW had been the No.3 global supplier of airbag inflators, behind Takata and Autoliv. Within five years, Sommer says the TRW division should surpass Takata for the No.2 slot.

Despite brisk demand for airbags, Sommer says stronger growth is expected for automatic transmissions and chassis and steering systems.

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