ZF Friedrichshafen will invest 800 million euros ($911 million) to adapt its transmission factory in Saarbruecken, Germany, to produce components for electrified drivetrains.
ZF expects the share of hybrid drivetrains to grow to 50 percent in the next 10 years from 5 percent now, as automakers try to meet ever-tightening CO2 emissions standards.
The money that will be spent at Saarbruecken is part of a 3-billion-euro investment to prepare ZF's transmission business for electrification, including production, infrastructure and the company's supplier network.
The supplier said warned the workforce at the Saarbruecken plant will decline in the long term if full-electric drivetrains grow as expected.
Electric motors and drivetrains have fewer moving parts than internal combustion engines, and some studies, including one partly funded by ZF, have shown that tens of thousands of European automotive jobs could be at risk in the coming decades.
Earlier this year, ZF CEO Wolf-Henning Scheider said that 15,000 ZF transmissions jobs were at risk “in theory,” in the transition to electrification but he noted that transmissions also represented a powerful opportunity to create profits by integrating electrification.
"We will prepare for that situation (widespread electrification) but we still have some time,” he said. "We will discuss this together with our works council in a very open manner. I don't have an answer today, but I'm quite confident that we will find a solution.”
In light of that, ZF said Friday that some of the investment at Saarbruecken will go toward measures to increase efficiency and competitiveness, as well as retraining employees.
“The fact that these effects will only occur in a few years’ time gives us the opportunity to prepare for them today,” Stephan von Schuckmann, head of ZF’s car powertrain technology division, said in the news release.
ZF ranks No. 5 on the Automotive News Europe list of the top 100 global suppliers with worldwide sales to automakers of $34.48 billion in 2017.