FRANKFURT -- The departure of ZF Friedrichshafen CEO Stefan Sommer shows that politics and entrepreneurism rarely are a good match. Sommer turned ZF into the world's second-largest supplier with the $12.4 billion acquisition of TRW Automotive, but his global expansion ambitions clashed with the parochial outlook of the trust that runs the company.
Sommer and Andreas Brand, mayor of ZF's home town of Friedrichshafen, Germany, and chairman of the city-run Zeppelin Foundation that holds 93.8 percent of ZF, have been at odds for months. The source of contention was Sommer's acquisition spree aimed at reducing the supplier's dependence on combustion-engine cars and building up its expertise in components for autonomous and electric vehicles.
Earlier this year, ZF took a 40 percent stake in German lidar maker Ibeo Automotive. To gain missing expertise for autonomous trucks, ZF made an unsuccessful $515 million bid for Swedish brake systems group Haldex and sought to take over commercial vehicle parts supplier Wabco Holdings.
Brand blocked the Wabco bid, which he regarded as "reckless," press reports said. ZF's growing debt worried Brand, who demanded that the supplier pump more cash into the city's coffers. In 2016, the foundation received 156 million euros in dividends from the supplier, according to Manager Magazin. A plan to list the supplier on the stock market was the final straw for Brand.
Sommer, who was named a 2015 Automotive News Europe Eurostar, was annoyed by the political interference and went on the offensive. He needed the "freedom to do what is necessary," he told the Schwaebische Zeitung and the shareholder structure should not restrict the company's future development. "The moment in which, for example, local political considerations from Friedrichshafen determine the corporate strategy, it will become critical," he told the newspaper.
