Michael Stauch, Managing Directors of ZF Serbia’s Pančevo plant: We Create Next Generation Mobility

We drive the market and shape the industry together with our suppliers and customers

ZF is an automotive leader that has demonstrated throughout its long and successful business history how strategic thinking, innovative approach and capacity for change can shape and transform the future of one industry.

Just two years ago, ZF chose Pančevo and Serbia as a location for the company’s biggest European plant of its youngest ZF E-Mobility division, which construction and equipping cost 160 million euro. This bold decision initiated the Northern Industrial Zone in Pančevo. ZF’s plant in Pančevo is now fully operational, featuring a 50.000-square-metre production facility and new modern R&D centre which is getting ready to open as we speak. The ZF Serbia team today counts 650 white and blue-collar workers, managers, specialists and experts with extensive training and education behind them. This project is bringing new investors and positively developing local community while beneficially affecting every person in Pančevo. We talked with Michael Stauch, one of two Managing Directors of ZF Serbia’s Pančevo plant, in charge of technology and production.

MICHAEL STAUCH ZF Serbia Managing Director -Technical (Foto: ZF Serbia)

Choosing Pančevo and Serbia as a location for the company’s new plant showed to be an open-minded and brave choice which was supported unconditionally by the Serbian government and relevant institutions which invested a lot of effort to make the investment possible. From today’s perspective, has this decision proved to be the right one and what can you say about this project today?

Even with 25 years of experience in the automotive industry and setting up plants on several continents, I can say that the opportunity to set-up the new e-mobility plant of ZF in Serbia was unique. Serbia is close to our major customers in the European Union. On the other side, there is strong competition with other automotive suppliers in Central and Eastern Europe. We have the strategic frame and a clear goal with the ability to combine the good qualification and eagerness of Serbian people and participate in the economic development of Europe. Considering our approach and the know-how, we were confident that a new plant would be successful in this environment. We are satisfied with the progress and results we have achieved so far.

We have the strategic frame and a clear goal with the ability to combine the good qualification and eagerness of Serbian people

What challenges did you face during setting up the production in Pančevo? How relevant was your international experience and what did you gain and learn from local people and local knowledge? How special would you say this project is?

When launching our business activities in 2018, a core team of 10 people focused both on the construction of the facility and even more on people management. After a few months, we hired 100 well-qualified workers and started with intensive tandem and training concept in Germany. Additionally, the integration of Serbian team members in early equipment pre-acceptance at supplier sites and set-up of machinery in Serbia helped to understand the scope and processes ZF Serbia was expected to handle from now on. Since companies in the rest of the world don’t have that much experience with e-mobility production in general, ZF Serbia is building up a unique knowledge and production competence. Once again, a good mixture of general education of people in Serbia combined with a cultural propensity for finding solutions flexibly, always looking for alternatives and thinking “out of the box”, have been very helpful for starting our operations and setting up the business. It is satisfying to see how the team steered and managed the challenges so far!

What would you say makes ZF stand out from the competition? What is it that makes you believe you are on the right track and enables your company, customers and employees to look optimistically to the future?

E-mobility is the first major advantage is our business segment. This is a global trend that cannot be stopped anymore. The requirement for clean mobility, especially in cities, but already enforced countrywide in many countries, allows ZF to sell the unique and comprehensive product range in this area. Thanks to this growing trend, ZF Serbia does not only have a new plant in a new country but is also a pioneer in a new industry. In Serbia, ZF and its customers are together dealing with fast development and production cycles and demands, including new production technologies.

Foto: ZF Serbia

You work closely with all your customers. What is their view on Serbia and how do you see future cooperation in product development combined with client service?

Many of our customers did not know much about Serbia, myself included, so they were very interested to learn more about the country and came to visit us, or rather, to use official terminology, “conducted audits” to verify how things are done here. In just one year, we had several visits from 4 major automotive OEMs and several other automotive and non-automotive customers. All our customers were pleasantly surprised and took with them a very positive impression of our facility and Serbia in general.

What are your next steps? How will you capitalize your resources and the know-how? What is the plan for the new R&D centre and could you tell us about your product portfolio?

As a result of positive experiences with setting up a new production facility in Serbia, ZF’s top management has decided to extend the scope of the company and form a technology centre. This Centre will become operational later this year, but we have already hired the first core team, sent them to Germany for extensive training and continued to hire persons which will now form the Technology Centre, including many test benches. This technology centre is a last piece of the puzzle which will ensure that ZF Serbia can independently handle the complete chain of activities from first customer contact with sales, through project management, development and operation (with all other related and needed functions) in the future.

We are aware that when ideas and visions are supported with an appropriate strategy, hard work, adequate resources and creative people, the success is only a matter of time

Could you round off an overview of this complex and impressive project from the initial phase to the current developments and give us your business outlook and a clear company message?

My colleagues and I, as well as the company and its partners we can be very proud of this project. We have achieved impressive results so far we have built a facility in less than a year, while, at the same time, recruiting and training a team of more than 100 people in first 6 months. We have also participated in equipment pre-acceptances at suppliers in Europe and installing machinery in our new plant in Serbia, while also preparing all processes required for normal functioning, including describing these processes and training our workers.

By mid-2019, we started working for our first customers, and have increased the number of our customers by one every few months. We had grand opening of the Pančevo plant in June 2019 and embarked on the new investment phase that is now also finished.

Current developments in 2020 relating to COVID-19 did affect our business too. During the first wave of the pandemic, ZF Serbia customers reduced their demands due to their plant shutdowns. But some of our customers continued with their production activities and hence allowed ZF Serbia to also continue production, albeit in a lower volume, during the period of the special measures in Serbia. While being mindful of these measures, we continued with our operations which made it possible to pay out salaries regularly.

ZF Serbia did record a lower growth than originally expected, but we will continue to grow. In the meantime, we are continuing with our production, have invested over 100 million euros so far, and have 650 employees. We have set up complex production, assembly, and testing processes with a wide range of technologies from machining, welding, potting and ensuring that product cycle times range from 1 second per product to 2 minutes the most. The variety and complexity is a challenge for everyone but also a good motivator. Our development plan stipulates ZF Serbia having at least 1,000 workers, development of e-mobility solutions for the future and also producing and exporting them from Serbia. I am looking forward to continuing being part of that in the time to come. The whole process is based on initial assumptions, research, experience and conditions that have been well-planned and well worked out, so we are aware that when ideas and visions are supported with an appropriate strategy, hard work, adequate resources and creative people, the success is only a matter of time.

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