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Manufacturing Matters- Tuesday Top-Up 71

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What’s Been Happening in our MAKE│NZ Community

•We’re hiring!

Our Community of manufacturing leaders keeps growing, so we are looking for someone to support that growth. The new Community Development Manager will play a key role in shaping that Community, building relationships with members, and helping MAKE│NZ to grow the collaborative, reciprocal network we aspire to be. Do you/are you able to

  • support our purpose and the idea behind MAKE│NZ? Are you able to embrace and champion our Community concept?
  • have experience in manufacturing, engineering, or a related technical field?
  • have the mental agility and adaptability to work in a small dynamic team where ‘the job’ will change as the situation requires?
  • listen with empathy and handle confidential conversations with sensitivity and discretion?
  • have an interest in ‘the big picture’ in manufacturing, and are able to share high‑level insights with members of our Community?

If so, we are keen to hear from you! The position will be available for full-time or part-time employment, or on a contract basis. To find out more, and tell us you’re interested, please get in touch (dieter@makenz.org / sabine@makenz.org )

Members supporting Members

•There is an opportunity for members of MAKE│NZ to use the Community as a platform for exchange – give or take. Anything from advice to ‘hardware’ (machinery & equipment, etc.) to services in the widest sense.

Today we have an offer from one of our members for warehouse space in Auckland: Sub Lease Opportunity – 8 Hautu Drive, Wiri

Approximately 3,500 sqm of high stud warehouse space is available for sub lease within the established industrial facility at 8 Hautu Drive, Wiri. The area is well suited to storage, distribution, or overflow logistics operations and includes a small, self-contained office within the warehouse footprint, suitable for one to two staff requiring on site administration or supervision without the cost of a full office build out.

The warehouse benefits from access to a container friendly yard of around 1,000 sqm, supporting efficient truck access, devanning, and pallet movements. Located in the core Wiri industrial precinct, the site offers excellent connectivity to the Southern Motorway, SH20, Auckland Airport precinct, inland port facilities, and the Ports of Auckland, making it a practical option for freight intensive users.

The space is currently vacant and available by agreement on short-term or longer-term arrangements; flexible commercial terms provide an attractive solution for occupiers seeking scalable warehouse capacity without committing to a standalone facility.

Interested? In the first instance, please contact Sabine (sabine@makenz.org) or Dieter (dieter@makenz.org)

News From The World of Manufacturing

Come gather ’round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You’ll be drenched to the bone
If your time to you is worth savin’
And you better start swimmin’
Or you’ll sink like a stone
For the times they are a-changin’

•Thus start the lyrics of one of the five songs that helped Bob Dylan win the Nobel Prize for Literature in 2016. The times they are a-changing …It certainly feels that way. Manufacturing isn’t immune to the impact of these changes. A case in point can be found in the beautiful town of Friedrichshafen on the shores of Lake Constance in Germany. From afar, it looks like the economy of Friedrichshafen is dominated by tourism and horticulture. Because of its favourable climate, the region could be described as Germany’s Hawke’s Bay.

However, that’s not the full story. Almost 126 years ago saw the first flight of LZ1, the first dirigible (aerostat or rigid aircraft) made by the company founded by Count Ferdinand von Zeppelin in Friedrichshafen:

That story pretty much ended with the Hindenburg Disaster in 1937. There still is a company called Zeppelin Luftschiftbau GmbH today that tries to re-launch air transport by ‘blimps’, but with limited success.

Linked to the above is ZF – Zahnradfabrik Friedrichshafen. The company was founded by Count Ferdinand von Zeppelin and engineer Alfred von Soden-Fraunhofen in 1915 as a subsidiary of Luftschiffbau Zeppelin to manufacture gears and gearboxes for zeppelins and other vehicles.

Until more recently, ZF remained focused mainly on just that – manufacturing automotive gearboxes and components, some of them quite well-known, such as its 8HP model that is used by many premium automotive brands like Audi, BMW, and Jaguar. The 8-speed automatic transmission is favoured in sports cars for its exceptionally fast shifts (down to 0.2 seconds), high torque capacity (up to 1,000Nm), and 98% efficiency. It offers the speed of a dual-clutch transmission with the comfort of a torque converter, enabling non-sequential skips (e.g., 8th to 2nd gear).

Today, the company ranks as the 4th largest global supplier of automotive components, following Bosch, Denso, and Magna. The company’s last formally announced results, for 2024, reported sales of €41.4 (2023: €46.6) billion, forecast to decline further to “more than €38 billion” for 2025. Employee numbers were 161,631 people worldwide (2023: 168,738), forecast to decline further as well. Among the company’s hotly contested plans is the announcement of cutting up to 14,000 jobs in Germany alone by 2030.

Over the past decade (2016–2026), ZF Friedrichshafen has undergone one of the most radical transformations in its 110-year history. The company evolved from a traditional mechanical components supplier into a global powerhouse for software-defined vehicles, electric mobility, and autonomous driving.

However, this transition has been marked by massive debt-fuelled acquisitions, subsequent financial strain, and a painful restructuring that is currently peaking in 2026. ZF used aggressive M&A to quickly gain the electronics and software expertise it lacked, major acquisitions include WTRW Automotive (2015/2016) and WABCO (2020). In 2024 it also formed a 50/50 joint venture with Foxconn (Hon Hai Technology Group) for its chassis modules business.

The high levels of debt incurred by the company were built on the expectation that the company would become a major player in the EV componentry market. ZF consolidated its hybrid and electric activities into the E-Mobility Division in 2016, and subsequently committed over €12 billion toward developing systems and components for e-mobility and autonomous driving. By late 2025, however, ZF had to acknowledge that it had over-invested in a market where EV adoption was slowing. In January 2026, ZF announced it was prematurely exiting several non-profitable electric projects to focus on sustainable margins.

In a nutshell, a company in some strife. It made a massive bet that turned out to be wrong, at least partially. EV sales globally have risen significantly since ZF made its investment decisions, but the majority of these EVs were made in China, and not by car manufacturers in Europe and North America, ZF’s traditional partners. And the trend is not their friend. The oversupply in the local Chinese market will keep low-price Chinese EVs being pushed onto global markets, especially in the Southern hemisphere, making life difficult for European EV manufacturers in particular.

•Less than a mile (1.4 km) away are the headquarters of another company that can trace its roots back to Count Ferdinand von Zeppelin. It was founded in 1909 jointly with engine design specialist Wilhelm Maybach (yes, the one used by Mercedes-Benz for its topline models) as Maybach-Motorenbau GmbH to manufacture engines for the Zeppelin blimps. The company quickly specialised in large, heavy-duty diesel engines and manufactured the engines for pretty much all of the German army’s armoured vehicles during World War II. After the war, and until 2006, the company operated as MTU Friedrichshafen GmbH and latterly was a constituent of DaimlerChrysler Powersystems’ Off-Highway division. With the dissolution of the Daimer-Chrysler JV, the company was acquired and run by a private equity fund (EQT IV) until it was finally acquired by Rolls-Royce Holdings in 2014 and renamed Rolls-Royce Power Systems AG (RRPS).

Today and under the MTU brand, the company’s engines are powering anything from armoured vehicles, military vessels, ferries and large yachts, to locomotives and mining equipment. Just as important, however, are fully-integrated large-scale backup power systems. These power systems can be found anywhere in the civil and commercial critical infrastructure. Airports to hospitals, semi-conductor to pharmaceutical factories – and data centres. It’s in the latter in particular, and in armoured vehicles, where sales have gone through the roof recently. Turnover for 2025 was up 19% over 2024, to €5.72 billion. EBIT rose by a whopping 60% to €995 billion, or 17.4%. Compare that to the corresponding figure for ZF – around 4%.

ZF bet on the wrong horse – and lost. RRPS didn’t even have to bet. The changing times drove new business right up to their doorstep. Once the Russia-Ukraine war had started, political leaders in Western Europe, with Germany at the forefront, decided it was time to increase their military arsenal. That meant an order to RRPS for 300 engines for Germany’s main battle tank (Leopard 2) and an unconfirmed number of engines for the Boxer wheeled armoured personnel carrier. “We expect year-on-year growth of about 20% medium term for our defense business”, says RRPS CEO Jörg Stratmann.

The other business that landed on RRPS’ doorstep is the rapid expansion in data centres. “Every third click on the internet is now done on platforms supported by our back-up systems”, says Stratmann. Sales for that product line rose by 30% year-on-year in 2025, now making up more than half of the company’s total turnover.

These are examples involving companies in a far-away country, and companies (much) bigger than even New Zealand’s largest non-food manufacturers. But the principle equally applies to New Zealand’s manufacturers. When the times are a-changin’, the risk of bets going wrong increases, and growth opportunities in existing markets, or new markets opening, may occur without much active market development.

We become less of a master of our destiny.

Other news of interest to manufacturers

•It is human nature to assume – or hope – that when an extra effort is made, there will be a reward. In business, that’s called RoI (Return on Investment).

As we reported last week, nowhere is there more investment going on right now than in AI and the data centres to run it. The return, ultimately, is expected to come from rather spectacular improvements in productivity, commensurate with the size of the investments. Are we there yet?

A recent report in The Economist doesn’t think so:

Others beg to differ. A recent study published by the European Investment Bank (EIB), based on a survey of approximately 12,000 non-financial corporations in the European Union, finds an approximately 4% increase in labour productivity in firms with significant levels of AI adoption across the EU:

The effect is associated with larger firm size and higher average wages. Of course, with empirical studies like these, there is always a risk of confounding cause and effect. It might well be that larger companies that pay better wages are generally managed better, resulting in higher productivity, and more proactive, meaning they take up new technologies faster than the rest. The authors claim to use methods to eliminate that risk of confounding.

The authors of this, generally very thorough study, conclude that “Crucially, the productivity improvements stem from capital deepening rather than workforce reduction. …Moreover, the evidence suggests that, so far, workers in AI-adopting firms have benefited in terms of higher wages. The productivity benefits are, however, disproportionately concentrated among larger firms, financially advanced regions and technology-intensive sectors, risking heightened economic polarization.”

Varying estimates of benefits are common in the early stages of adoption of new technologies – known as the ‘Gartner Hype Cycle’, first introduced by the Gartner IT consultancy in 1995. For 2025, and focusing on AI-related technologies, Gartner characterise the stage of maturity like this:

When we look at manufacturing in particular, again using the US as an example, there are no signs yet of a change from the rather disappointing recent performance:

This should not be a surprise. Reports on AI adoption across different parts of the economy consistently put manufacturing at the lower end:

That is mostly because general Large Language Models (LLMs) have limited use on the factory floor and the introduction of agentic AI is still very much in its infancy there.

Fun facts

•Might as well go out with a bang …

A recently published study by Danish and Dutch economists demonstrates the impact of a cancer diagnosis on social behaviour. Unsurprisingly, the authors made reference to the most well-known example of this phenomenon: “Breaking bad: How health shocks prompt crime”.

The study is based on official records covering all of Denmark’s population between 1980 and 2018. As an aside, Denmark has had a centralised Civil Registration System since 1968 that records vital statistics on all citizens. Having lived in Denmark in the 1980s we quickly learned to appreciate the benefits when dealing with the health system, for example. As a further aside, the Germans are still working on introducing an equivalent system …

Back to the issue on hand. A few things worth noting:

  • The phenomenon is pronounced in males of lower socio-economic status and below-average levels of educational attainment
  • Past criminal records do not appear to have a significant influence, the best predictors are the patients’ financial status, and their cancer prognosis
  • While all types of crime are up, the effect is most prominent for economic crimes

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