ZF will pass on added cost of steel

Friedrichshafen, Germany. ZF Friedrichshafen expects its costs to rise between 150 million and 200 million euros in 2005 unless the company can pass on to customers a large share of its increased steel costs.

Siegfried Goll, CEO of the chassis and driveline technology specialist, said ZF plans to pass on "two thirds of our additional costs."

Steel represents 50 percent of the company's purchasing volume.

In an interview with Automobilwoche, Goll demanded that all those who are part of the supply chain should pay a part of these costs. He said that ZF already has reached a price agreement with some of its customers. But others simply "let it go in one ear and out the other," he said.

Goll said ZF plans to be "more generous" with its own suppliers "than car manufacturers are with us." Otherwise the supply chain could fall apart.

Some of ZF's suppliers have already reached the end of their liquid reserves.

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