In 2024, the company announced plans to cut up to 14,000 workers by 2028 \u2013 more than one in four of its 54,000 German employees. <\/p>\n
As the city is the majority owner of ZF, and the main recipient of its dividends, the company\u2019s economic struggles have become Friedrichshafen\u2019s.<\/p>\n
Friedrichshafen is now in the same position as many towns and federal states in Germany that have for decades relied on sector-specific economic growth which can no longer be taken for granted. <\/p>\n
Stuttgart, the city home to car parts maker Bosch and luxury car maker Mercedes, incurred a \u20ac785 million budget shortfall last year due to lower income from business taxes. <\/p>\n
Volkswagen AG\u2019s hometown of Wolfsburg, which relies heavily on the car maker for tax revenues, has also had significantly less money available to spend, with an anticipated budget gap of about \u20ac138m ($271m) in 2026.<\/p>\n
Gerhard Leiprecht, a retired engineer at Rolls-Royce Power Systems, likened what\u2019s going on now in Germany\u2019s car country to what happened in the late 20th century in the Ruhr area, when globalisation and decreasing demand led to major job losses across the region\u2019s steel mills, resulting in widespread deindustrialisation.<\/p>\n
While Friedrichshafen is still doing well relative to most places in Germany, it is having to make some painful adjustments. <\/p>\n
Last year, officials raised prices on public parking, kindergarten and public pool fees to close a \u20ac21m funding gap. <\/p>\n
The city\u2019s hospital has filed for bankruptcy. Almost all of the city\u2019s cultural and social offerings, including its aviation and art museum, event venues and a state-of-the-art library, are likely to reel from the cuts for years to come. <\/p>\n
This is not only affecting residents\u2019 quality of life \u2013 it\u2019s also changing how they view their hometown.<\/p>\n
\u201cParking fees in the city have increased significantly,\u201d complained Anna, an employee at the local university who prefers to omit her last name, noting that poor public transit means she has no choice but to drive. <\/p>\n
And as the mood in Friedrichshafen has soured as a result of rising prices and job losses, she said, she and her friends don\u2019t go downtown as often as they used to.<\/p>\n
In happier times, Friedrichshafen funnelled large dividend payouts to its Zeppelin foundation \u2013 named after the city\u2019s most famous invention \u2013 whose assets are earmarked for educational, social and cultural projects. <\/p>\n
Recent high points came in 2017 and 2018, when Friedrichshafen received \u20ac192m and \u20ac160m in dividends from both ZF and Zeppelin GmbH, another company owned by the Zeppelin foundation that mostly makes construction equipment.<\/p>\n
In Friedrichshafen, ZF Friedrichshafen AG has taken a hit. Photo \/ Krisztian Bocsi, Bloomberg via The Washington Post<\/p>\n
The city doesn\u2019t rely on this money for its municipal budget, emphasised Mayor Simon Blumcke, but it does have a profound effect on how locals live. <\/p>\n
\u201cFriedrichshafen finances many things that other comparable towns don\u2019t,\u201d Leiprecht said, singling out its airport and exhibition hall, which hosts more than 60 trade fairs a year.<\/p>\n
Following the ZF cuts, Friedrichshafen had to pass a supplementary budget last year. That was because as of September, it had only received \u20ac67m in dividend payouts.<\/p>\n
The Zeppelin Foundation\u2019s reliance on its associated company for financing \u201cis why it is important for the city and the Zeppelin Foundation that ZF quickly returns to economic success\u201d, a spokesperson for ZF wrote in a statement to Bloomberg. \u201cWe are working on that.\u201d<\/p>\n
People from all walks of life are being affected by the cuts. <\/p>\n
Local private liberal arts college Zeppelin University had to lay off 20% of its staff. <\/p>\n
Kindergarten fees will as much as triple until 2027 as a result of decreasing subsidies. <\/p>\n
Friedrichshafen\u2019s hospital also had to file for insolvency as a result of the spending cuts and may have to merge some wards with other hospitals, said Rainer Eckert, a lawyer overseeing the insolvency of Medizincampus Bodensee, the hospital\u2019s parent company. <\/p>\n
That could make it more difficult for locals to access quality medical care.<\/p>\n
In a statement to Bloomberg, Blumcke said the cuts ensure the city \u201cremains capable of acting, even though scope for manoeuvre is shrinking and reserves are dwindling\u201d.<\/p>\n
Because ZF\u2019s ownership structure grants Friedrichshafen considerable leverage over its business decisions, some critics argue that the city has put itself in its current situation by refusing to open the closely held firm to the capital market, which could have provided a much-needed cash infusion. <\/p>\n
Delays in ZF\u2019s US$7 billion acquisition of braking systems maker Wabco in 2019 also generated significant debt which the company still carries today. Opposition from former Friedrichshafen mayor Andreas Brand was part of the reason for that delay.<\/p>\n
As Blumcke has vowed to focus on essential public services, private actors are stepping up to ensure that the city doesn\u2019t lose its lustre. <\/p>\n
Companies recently donated \u20ac2.5m to an airline that re-introduced domestic flights to Friedrichshafen this January.<\/p>\n
Looking ahead, one bright spot for growth could be the defence sector. <\/p>\n
The Lake Constance region was a major arms hub during World War II and remains one of the few areas in Germany with a noteworthy defence cluster. <\/p>\n
Today, Airbus Defence and Space employs more than 2000 people in the area and missile maker Diehl Defence is expanding its headquarters in nearby \u00dcberlingen. <\/p>\n
ZF also produces components for armoured vehicles and collaborates with Rolls-Royce Power Systems, which makes engines for tanks and ships.<\/p>\n
Bernd Behrend, who manages customer relations at the Bodensee Airport, says the sector is \u201cgenerating growth that we had not anticipated\u201d. <\/p>\n
As people increasingly move to the region to work at defence firms, travel is picking up and more people are commuting by plane.<\/p>\n
Even so, the sector\u2019s production pales in comparison to that of the auto industry, and no defence companies have the kind of relationship ZF has with Friedrichshafen. <\/p>\n
That means the city, like others in Germany that were built on cars, will have to reckon with the fact that its economic model may not be future-proof. <\/p>\n
And unless it reinvents itself, it risks the fate of the massive airships that once made Friedrichshafen famous \u2013 and which were eventually made obsolete by airplanes.<\/p>\n
– With assistance from Wilfried Eckl-Dorna.<\/p>\n
Sign up to Herald Premium Editor\u2019s Picks<\/a>, delivered straight to your inbox every Friday. Editor-in-Chief Murray Kirkness picks the week\u2019s best features, interviews and investigations. Sign up for Herald Premium here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"In 2024, the company announced plans to cut up to 14,000 workers by 2028 \u2013 more than one…\n","protected":false},"author":2,"featured_media":288733,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[3471,134033,32802,2440,1558,138,109014,2199,8556,160406,160405,2082,160402,49753,1351,6215,1404,232,13207,38915,3180,111,139,69,1118,90,57479,160404,530,84484,1769,61,3912,160403,102,1530],"class_list":{"0":"post-288732","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-among","9":"tag-anchoring","10":"tag-austria","11":"tag-auto","12":"tag-been","13":"tag-business","14":"tag-centuries","15":"tag-city","16":"tag-companies","17":"tag-considerable","18":"tag-constance","19":"tag-for","20":"tag-friedrichshafen","21":"tag-german","22":"tag-had","23":"tag-hub","24":"tag-industrial","25":"tag-jobs","26":"tag-lake","27":"tag-located","28":"tag-near","29":"tag-new-zealand","30":"tag-newzealand","31":"tag-nz","32":"tag-of","33":"tag-on","34":"tag-picturesque","35":"tag-rely","36":"tag-residents","37":"tag-shores","38":"tag-switzerland","39":"tag-to","40":"tag-wealth","41":"tag-wellpaying","42":"tag-with","43":"tag-years"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/288732","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=288732"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/288732\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/288733"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=288732"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=288732"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=288732"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}