FRIEDRICHSHAFEN, Germany—The founders of auto supplier ZF Friedrichshafen A.G. would not recognize their company today.
Formed in 1915 to make gears for zeppelins and long known as a maker of transmissions and suspension components, ZF is amid a radical transformation from its origins as a specialist in metal gears and cogs to the world of bits and bytes.
"ZF is grasping the opportunity of fundamental change in the automotive industry to transform into a leading technology company in e-mobility and autonomous driving," CEO Stefan Sommer said in a statement accompanying the supplier's late March release of financial results.
Since acquiring TRW Automotive Holdings in 2015 for $12.4 billion, ZF has been hunting for new technologies to reinvent itself as a major force in self-driving vehicles and active safety. The company has adopted a mantra, "See-Think-Act," to build a portfolio of what Sommer calls intelligent mechanical systems that enable vehicles to gather information, process that information and issue commands resulting in action.
All the sensors and cameras that make that technology possible are packaged in plastics, since metal interferes with their function. While ZF's transformation has meant its exit from some plastics production, the company remains a significant player in the sector.
The TRW acquisition made ZF the world's second-largest component supplier, with 2016 sales of $37.9 billion. But ZF is now ready to play in the self-driving car game with other heavy hitters such as Robert Bosch, Continental A.G., Delphi and Denso Corp.
ZF incorporated TRW into a new Active and Passive Safety Technology Division, now the springboard for its transformation.
At a late-March event at the company's airy new lakeside headquarters building, Chief Digital Officer Mamatha Chamarthi oversees a fast-moving effort to take the company into artificial intelligence.
"We at ZF are thinking about bringing 100 years of our experience of doing mechanical components and putting intelligence in them," said Chamarthi, who came from TRW. "We started as a manufacturer of zeppelin components. Our future is all digital."
To prepare, the company last year opened a software center in Hyderabad, India, with 1,000 software engineers. By 2020, the company expects to have 2,500 engineers there.
"We plan to digitize all aspects of our business," she says.