In 2015, ZF Friedrichshafen AG will be celebrating its centennial. In the course of its long and eventful history, the company developed from an aviation specialist with regional roots to an international technology company active on the global mobility markets. The company founded and substantiated its economic success by many technological innovations but also by very setting the course towards promising market regions at an early stage and not least by acquisitions. In its anniversary year, ZF is about to become one of the top 3 global automotive suppliers.
ZF was founded in the city of Friedrichshafen at Lake Constance in 1915 as "Zahnradfabrik GmbH". The city was then a technology park for the aviation industry - since in the vicinity of the Luftschiffbau Zeppelin (LZ) GmbH, some partner companies had been established at which LZ was participating and this was also the case for the "Zahnradfabrik". The new company mainly focused on the development, testing, and manufacturing of transmissions for airships and airplane transmissions (1916-18). A procedure for the production of gears used under an exclusive license which originally came from the Swiss engineer Max Maag, who also hold a participation in the "Zahnradfabrik", turned out to be very innovative not only for the aviation industry. It also enabled the company after 1919 to cover the demand for more silent and user-friendly transmissions for automobiles. ZF became a supplier to the automotive industry. The developments and designs by Alfred Graf von Soden-Fraunhofen, the first Managing Director and later member of the Board of Management and head of the company, led the way: His Soden transmission, Aphon low noise transmission, and also the standard transmission laid the basis for the first successful products due to which ZF also could overcome the financial concerns of the founding decade and survived the Great Depression after 1929. The increasing number of inventions for which Soden and also other ZF engineers applied for patents was the starting point for constantly developing new products.
Specialist for technology transfer across industries
To transfer innovative technology in as many application fields as possible apart from the aviation and automotive industry became ZF's trademark in the first decades of its existence. Thus, ZF tapped new market segments in the 1920's and particularly in the 1930's by introducing products for ships (as of 1936) and starting the production of tractor transmissions. In order to diversify and to enter new markets, ZF also used the option of acquiring licenses - for instance at the beginning of its steering business: In 1932, ZF agreed with the US company Ross to produce passenger cars and commercial vehicle steering systems for the European / German market under license.
After the Nazi party NSDAP came into power in the German Reich in 1933, also ushering massive changes in economic structures, the production for the defence industry gained more and more importance at ZF. Still transmissions and steering systems were produced, but vehicles used for military purposes and particularly tanks were important fields of application now. This contributed significantly to extending the production - thus in 1937, ZF opened another large production location in Germany in Schwäbisch Gmünd. As of the start of the Second World War in 1939, ZF was also involved in employing forced labor. The number of forced laborers constantly increased until the end of the war to about 2 800.
At the end of the war, particularly the headquarters in Friedrichshafen were massively destroyed by air raids of the allied forces. Although the company ZF had been in danger of being dismantled and liquidated for years, the Friedrichshafen location restarted production. Especially tractor transmissions for agricultural purposes were in great demand. In this context, ZF took over another location in Passau, ZF Waldwerke GmbH, a company established with ZF know-how for the production of transmissions for tracked vehicles and military trucks.
New owner structure and economic boom
It was only in 1950 that the owner structure of the company ZF was clarified for the long term: The Zeppelin foundation, administered by the City of Friedrichshafen since 1947, became the majority shareholder holding 89.8 percent of the shares; 6.2 percent of the shares were still owned by the family Brandenstein-Zeppelin, 4 percent by Maag Zahnräder und Maschinen AG. The foundation model is still effective today. ZF's production grew significantly, shortage of staff at the three large German locations soon became the main problem. In 1953, ZF continued its steering system production with the license granted by the US company Gemmer, soon after the company became more and more successful on the market with its technically improved in-house developments. Apart from the tractor transmissions, constant-mesh transmissions for trucks and buses became a very popular ZF product with a high demand over several years. Later, ZF also produced this - from today's point of view - quite uncomfortable but very robust commercial vehicle transmission with an increasing number of synchronized gears - at least relieving the drivers from having to double-clutch when changing gears.
At the end of the 1950s, ZF laid the foundation for an expansion program into several directions: First of all, in 1958 the company established the first production location outside of Europe for an order by Mercedes-Benz - in Sao Caetano do Sul in Brazil. Secondly, ZF implemented a technological innovation program focusing mainly on the hydrodynamic powershift transmissions which were considered as comfortable then. The same principle - a torque converter in front of a transmission consisting of planetary gearsets - was used in Hydromedia transmissions for buses and rail vehicles and later also for passenger cars.
Start of multi-ratio transmissions for passenger cars and buses
In 1963, ZF applied this principle to the 2 HP 45 Hydromedia transmission which later became the core of the Ecomat transmission for city and intercity buses and whose further developed versions extend to the current EcoLife transmission with now 6 gears. In 1965 - for ZF's 50th anniversary - the company started the production of a 3-speed automatic transmission for passenger cars which became another success story: After the inauguration of the new location in Saarbrücken in 1970, at which only this transmission type has been produced since then, ZF positioned itself as one of the most innovative providers of multi-ratio transmissions for passenger cars. With the 8HP, this tradition has also continued to today - and additionally shows how ZF managed to increase fuel efficiency and driving dynamics with every generation of this product that originally focused on driving comfort.
ZF also took innovation and diversification very seriously right from the beginning in order to be not dependent on one industry sector only as of the late 1960s. ZF thus reacted to the significantly decreasing demand for tractor transmissions by offering trendsetting driveline technology also for construction machinery. Both fields of application, in which the engine power as well as the requirements for manifold functions and the efficiency of the driveline have massively increased, were significantly marked by ZF, for instance by the introduction of the continuously variable transmissions and hybrid transmissions that currently increase maneuverability in agricultural and construction machinery and reduce fuel consumption.
Apart form this, ZF had also been producing transmissions for marine applications for a long time and produced - as part of a cooperation with Siemens in the 1960s - stationary transmissions for the mechanical engineering industry. The aviation industry also gained importance for the company again with the development of helicopter transmissions since the 1960s.
ZF also promoted its early internationalization efforts by establishing an extensive service and sales network as of the late 1960s. The ZF managers also laid the foundations for new production locations, like in Argentina in 1978 and in the US one year later. The region of Asia-Pacific and the market opportunities there were also in ZF's focus at a very early point in time: In 1980, ZF Japan was founded in Tokyo, in China a first joint venture for the local manufacturing of bus transmissions was founded, in 1984 ZF Steering Gear in Poona, India, was established, and in 1985 ZF started production of steering technology in Malaysia. ZF also began to focus more on the efficiency of its production locations: Innovative manufacturing procedures have ever since been a ZF tradition, rational and lean production methods have become another one.
Trademark fuel efficiency
Efficiency with regard to fuel consumption gradually also became a trademark of ZF driveline technology products for passenger cars and trucks - and thus supplemented the product advantages shift comfort and safety: Since the oil price shock of the 1970s, fuel consumption increasingly became a key item on the ZF engineers' agendas. In the commercial vehicle industry, less fuel consumption also had a positive effect on the fleet owners' calculations resulting in an increased willingness to invest in modern, fuel-efficient technology. In 1980, the Ecosplit was launched for which a split group doubled the available number of speeds resulting in a higher spread of gear ratios and thus in a more economical operation.
ZF took another step in this respect in the mid 1990s with developing an automatic transmission system for trucks that was launched under the name of AS Tronic and meant significant economic success for ZF. Since this transmission automatically kept the engine in the most fuel-efficient speed range, hardly any manually shifting truck driver could achieve this fuel efficiency level. Furthermore, the often tedious gear shifting process in commercial vehicles was reduced to a minimum with the AS Tronic.
For the passenger car automatic transmissions after the 3HP, not only the number of speeds (and therefore the ratio spread) but also technological innovations increased. The transmission type once "popular" for its high consumption turned into a fuel saving miracle some decades later. In case of ZF's steering systems, the trend for passenger cars and commercial vehicles pointed into another direction with the introduction of the power steering system: significantly more steering comfort but also higher consumption. Very soon, however, ZF also focused more on efficiency - initially with a speed-dependent regulation of the power steering forces - the Servotronic - and then by electrifying the steering power assistance based on the "Power-on-Demand-Principle" and the introduction of the electric power steering system Servolectric.
As of 1983, ZF has prominently extended its product portfolio by means of acquisitions - and also improved its position in the international ranking of automotive supplier companies: In 1984, ZF acquired initially 51 percent of the Lemförder Group with all its participations in Germany and abroad. With this, the development and the production of chassis components became one of ZF's competences. In the 1990s, ZF established development and production know-how for complete axle systems and also assumed this business for its customers worldwide: Today, more than three million axle sets per year are assembled at twelve locations around the globe.
In 2001, ZF took over Mannesmann Sachs AG - the former Fichtel & Sachs AG - and integrated the company into its corporate structure. Together with the component business, the real net output ratio also increased; the acquisition also involved the intensification of the service and aftermarket business. ZF also continued innovations and traditions of the Sachs history. One example is the further development of the "momentum start module" whose volume production started in 2008 and significantly strengthened the company's competences in the area of hybrid drives. Also the motorsports tradition, going back to the 1960s when ZF delivered race transmissions for the Formula 1 racing team Lotus, was revived after the Sachs integration. Today, ZF delivers clutches and vibration dampers for the racing series DTM and World Rallye Championship.
Another important step towards renewable energies was taken in 2011 when ZF started to develop its first transmission for wind turbines. Almost at the same time, ZF extended its product portfolio in this market segment by another acquisition; today ZF offers a portfolio of wind turbine gearboxes for almost all power classes and is one of the key players on the market.
In September 2014 ZF announced the acquisition of the US company TRW. In October a broad majority of the TRW shareholders agreed to ZF's offer. The completion of the acquisition of the listed company TRW (closing) under the umbrella of ZF in 2015 - exactly in its anniversary year - will create the third-largest automotive supplier in the world with a sales volume of over EUR 30 billion (US$ 41 billion) and about 138 000 employees. The ZF Group, supplemented by TRW, will then provide a comprehensive and complementary product portfolio in the areas of driveline and chassis technology, safety and electronic systems, and will have a regionally-balanced and customer-specific portfolio in both the volume and the premium segments.