Ensdorf The new ZF boss, Holger Klein, had just one month in office and made the biggest appearance imaginable. Chancellor Olaf Scholz (SPD) flew to Ensdorf in Saarland on Wednesday. As a junior partner of Wolfspeed, the second largest German automotive supplier is building the world’s largest factory for silicon carbide chips on the site of an old power plant. The energy-saving chips are considered a key technology for more range and fast charging of electric cars.
The 53-year-old’s openness – coupled with diplomatic skills when it matters most – has already paid off. Never before has a chancellor known the face of a ZF boss so well after just a short time as Olaf Scholz does now with Holger Klein.
On the fringes of the SPD party conference in Friedrichshafen last November, Scholz made a flying visit to the largest industrial employer on Lake Constance. Even then it was about the final vote and political flank protection for the chip factory, which is dependent on EU subsidies. People came closer, as can be the case in political-industrial win-win situations.
An American-German chip factory in the structurally weak SPD-governed federal state suits the Chancellor very well. “The industrial revolution is returning to Saarland,” said Scholz.
Holger Klein as the only supplier boss at the car summit
The chancellor wanted to demonstrate that he can also do industrial policy. In addition, the settlement is a respectable success for the chip industry in Europe, which has fallen behind badly internationally. The Chancellor is not only grateful to his party friend and Saar Prime Minister Anke Rehlinger for the success of the complex future project, which costs between two and a half and three billion euros, but also to the ZF boss.
The automotive supplier ZF is involved in the multi-billion dollar chip project as a junior partner of the US group Wolfspeed.
(Photo: dpa)
Something like that can’t hurt a newly minted CEO. When Scholz invited the grandees of the industry to the auto summit in Berlin two weeks ago, Klein was the only boss from the auto parts industry who was invited. In the past, it was automatically the turn of the industry leader Bosch.
The preparations for the chip factory have been going on for a good three years, long before Klein’s time as boss. But the strategic influence of the former McKinsey consultant since he joined the foundation group in 2014 should not be underestimated. Since then, the foundation company has risen to become the world’s third-largest automotive supplier behind Bosch and Denso and achieved sales of more than 38 billion euros in 2021.
The 53-year-old earned his merits for the post by playing a key role in the integration of TRW. ZF took over the US company in 2015 for a double-digit billion sum. The foundation company, which grew up with transmissions and chassis, was able to catch up with Bosch and Continental in future technologies such as electromobility and automated driving.
Billions in state aid for a new chip factory in Saarland
Klein was also involved in the strategic realignment of ZF and the expansion of international activities. In 2017 he took over the management of the core division Car Chassis Technology. Klein has been on the board since October 2018.
Manager with a soft spot for Chinese entrepreneurial spirit
He was responsible in particular for the Asian key customers and therefore managed his departments from Shanghai. His family still lives there because their son is doing his Abitur at a local international school.
Klein is fascinated by the Chinese entrepreneurial spirit. “It’s almost like in Germany after the war. Everyone wants to get something going somehow,” Klein told the Handelsblatt on the fringes of the event in Saarland. The inquisitive manager has therefore even learned Chinese.
On Wednesday, he showed that Klein leads differently than his predecessor Wolf-Henning Scheider: Others would have pushed themselves to the fore, but not Klein. He let drive boss Stephan von Schuckmann, who was considered one of his competitors for the top post, go first on stage. For years, Schuckmann had maintained contact with the state government through ZF’s largest transmission plant in Saarbrücken. That too is now paying off.
Access to the key technology for economical electric cars
The fact that Wolfspeed boss Gregg Lowe moderated the entire event did not bother Klein either. When he felt unobserved backstage, he politely called out to Loewe, “Gregg, you’re a really good entertainer.”
The group must realign itself to electromobility and automated driving.
(Photo: dpa)
ZF only has a minority stake in the chip project. But the partnership ensures that the automotive supplier will be supplied with the silicon carbide power-saving chips that are indispensable for electromobility and will have direct access to the technology via the adjacent research and development center. That alone counts for the strategist Klein.
“Wolfspeed also makes the base material from which the silicon wafers are cut,” Klein said. “The Americans have many years of experience and already have the most modern factory for this type of chip.” He is pointing to the strategic dimension: competitor Bosch manufactures silicon carbide chips itself, but has to buy the basic material. And the material, which is already in great demand today, could become a bottleneck for the entire industry in a few years.
Klein’s delight at being able to outperform Bosch in the future with another key component for electromobility can already be seen on this day. Similarities in approach connect him with Chancellor Scholz: he is very fact-oriented and does not allow himself to be looked at in important questions, even under pressure. As a child of the Ruhr area – Klein comes from Mülheim an der Ruhr – he is unpretentious when it comes to his own person.
Who doesn’t he get along with? Saarland Prime Minister Rehlinger praises his calm, objective and goal-oriented manner. The employees have not yet complained. Even when it comes to tough decisions, he remains “appreciative and empathetic,” they say.
ZF has high debts from acquisitions
One of the challenges of the new ZF boss are the high debts from the two major acquisitions of TRW and the brake specialist Wabco, which currently still amount to ten billion euros. At 19 percent, the equity ratio is less than half that of Bosch. He wants to sell the passive safety business, such as airbags, with sales of more than three billion euros and more than 30,000 employees, in order to improve the cash register.
“ZF also has to focus,” said Klein. However, it will still take up to a year and a half before the “passive safety” division is detached from the group and ready for sale. You can sometimes exaggerate a bit if you want to create some space for secret negotiations – loosely following the example of the chancellor.
In addition, ZF must master the transformation to electromobility – and avoid mass layoffs as far as possible. Here, too, the project in Saarland is a partial success: After all, in the future there will be several hundred ZF employees from the transmission plant in the chip factory.
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