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News
September 11, 2017 02:00 AM

TRW name to fade as ZF completes integration

Dustin Walsh
Crain's Detroit Business
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    ZF Friedrichshafen AG

    Signs will come down from their perch atop several buildings around the world, this week, and with them will come, three letters, TRW, with nearly 60 years of recognition in the auto supply business will be no more.

    German supplier ZF Friedrichshafen AG plans to end use of the TRW name after the completing the integration process of its $12.4 billion acquisition of Livonia, Mich.-based TRW Automotive Inc. in May 2015. ZF maintained the name of the safety systems supplier as ZF TRW as it worked through integration, which is now complete.

    ZF is expected to make the announcement at the International Motor Show in Frankfurt, Germany. Both companies use plastics in safety systems, including housings and other key components of airbags and seat belts, while ZF also has been investing in structural composites for structural and suspension parts.

    "When we started this [integration] two years ago, we wanted to make sure we keep the value of the TRW brand, particularly in the U.S. because it was a stronger brand than ZF at the time," said Franz Kleiner, CEO of ZF's active and passive safety division, formerly known as ZF TRW. "Now we believe the public, and employees, understand and identify with this organization as a combined company under ZF."

    ZF North America Inc.'s headquarters in Livonia, which it moved last year after acquiring TRW, will be the first to remove TRW from its signage. Its active safety operations in Farmington Hills, Mich., will follow and the rest will be completed in the coming months, said Bryan Johnson, senior manager of corporate communications at ZF North America.

    The TRW name, however, will live on in the aftermarket, where brand recognition is key, Kleiner said.

    "We never introduced the double ZF TRW logo in the aftermarket," Kleiner said. "In the broad consumer area, there is a fear that removing the TRW name would be negative. For the garages and general buyers, they will still be able to find brake pads under the TRW brands and transmissions under ZF."

    ZF and TRW generate roughly $2 billion in aftermarket sales combined, Kleiner said.

    TRW draws its history to 1901 when it was founded as Cleveland Screw Cap Co. in Ohio. Within a few years, the company would begin manufacturing automotive engine valves.

    Several decades and acquisitions later, the company entered the aerospace industry as Thompson Products before merging with Ramo-Wooldridge 1958 to form Thompson Ramo Wooldridge Inc., colloquially known as TRW. The company eventually became TRW Inc. in 1965, based in Ohio.

    By the late 1980s, TRW employed more than 120,000 in 25 countries.

    Defense contractor Northrop Grumman acquired TRW in 2002 for $7.8 billion, selling TRW's automotive assets, largely operated in Michigan, to private equity firm Blackstone Group for $4.13 billion later that year.

    TRW Automotive Inc. went public in February 2004.

    ZF, in search of new technology, started the acquisition process for TRW in 2014, making it the world's second-largest component supplier, with 2016 sales of $37.89 billion, behind Robert Bosch AG.

    ZF incorporated TRW into its active and passive safety technology division, now the springboard for its transformation. Since closing the deal, ZF has been on an acquisition binge to add to its new unit's capabilities.

    Epitomizing the new mission is Zukunft Ventures, a ZF subsidiary formed last year to scout new technologies and quickly link ZF to them without burying their developers' innovative and entrepreneurial energy in corporate bureaucracy.

    Translated into English, Zukunft means "future."

    The latest Zukunft endeavor was ZF's acquisition in March of a 45 percent stake in Astyx Communication & Sensors GmbH, which develops and produces ultra-high-frequency radar sensors and modules.

    The Astyx deal expands ZF's capabilities in environmental and object recognition necessary for autonomous driving.

    The acquisition follows moves last year to snap up 40 percent stakes in Ibeo Automotive Systems GmbH, a lidar and sensor fusion company in Hamburg, Germany, and double-Slash Net-Business GmbH, a Friedrichshafen company involved in software for vehicle networking. Lidar, an acronym for light detection and ranging, uses laser pulses to sense objects in the area.

    Kleiner said the company's growth in active safety is likely to translate to roughly 100 to 200 new jobs at its facility in Farmington Hills in the next few years. The rest of ZF's operations will remain "stable," with no new consolidation tied to the TRW integration.

    "There's no need to consolidate," Kleiner said. "We took two years to integrate to get those tensions; it wasn't handled all at once. We didn't get distracted from customers and were able to keep pace with the market. We kept our people motivated and staged an effective approach, which is why we were able to grow these past two years with a financial performance that was better than expected."

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