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Business

Rail strike angers industry and frustrates passengers

German train drivers ended a strike that blocked freight overnight and disrupted passenger services on Thursday morning. Industry fears further action could harm the economy, but rail operators see no end in sight.

Cars being transported by train

Half of Germany's new cars are delivered using freight trains

The ongoing dispute between the GDL train drivers' union and rail operators intensified early this week, when more than 90 percent of GDL members voted in favor of industrial action to improve pay and working conditions.

They didn't have to wait long. The GDL announced an overnight strike on freight services from 8pm Wednesday to 10am Thursday, followed by a six-hour strike on passenger services on Thursday morning

For commuters it's annoying, but for company managers it's a disaster. Dire warnings were already emanating from industry leaders over the weekend, particularly from the German Chambers of Industry and Commerce (DIHK).

"The longer the strike lasts, the more serious it gets," Patrick Thiele, DIHK spokesman for transport policy, told Deutsche Welle.

"One area that could be badly affected is the automobile industry, which depends to a large extent on 'just-in-time' production."

Half of the German cars that roll off the production line are delivered by rail.

"In only a few days, rail-freight strikes could cause production disruptions, because cancelled train consignments can often not be immediately re-routed via road or domestic ship," said DIHK boss Martin Wansleben in the Saturday edition of the Berliner Zeitung newspaper.

Two GDL strikers stand on a rail platform

The GDL strike has hit both freight and passenger services

Germany 's export reputation

Another much-voiced concern is the worry that rail strikes will ruin Germany's export reputation abroad.

"We're a country that depends on exports, and has a built a reputation for being reliable," said Thiele. "It can certainly affect the market if that Mercedes doesn't get delivered in time."

Heavy industry also relies on rail links to transport raw materials from ports to factory sites. More than 10 percent of the 350 million tons of freight carried by rail in Germany in 2010 were petroleum products, iron or steel.

Steel giant ThyssenKrupp told the Süddeutsche Zeitung newspaper that such traffic could be re-routed by road for a few days, but a longer strike could have serious consequences.

The cost of a protracted dispute could be considerable. The German train driver's strike of July 2007, which stopped freight traffic for a week, cost industry around 500 million euros. ($686 million). Carmakers were forced to slow production and put workers on part-time wages.

Deutsche Bahn as a 'hostage'

The GDL demands are fairly simple – they want a single, comprehensive tariff scale for all of the 26,000 train drivers in the country. Everyone should receive 5 percent more than Deutsche Bahn, Germany's state-owned rail operator, currently pays its train drivers.

As one of Germany's biggest companies, Deutsche Bahn may be in position to offer such a wage increase, but the younger, smaller private rail operators don't stand a chance, according to Engelbert Recker, CEO of mofair, an association that represent the interests of Germany's private rail operators.

Freight train

As an export industry, Germany depends on freight trains

"Essentially what is happening is that Deutsche Bahn is being held hostage by the strike to get at us," Recker told Deutsche Welle. Negotiations between the GDL, Deutsche Bahn and the private rail operators have now broken down.

Recker is resigned about the intractable situation. "I expect there will be a few more strikes now. Unfortunately, the GDL are being unreasonable," he said, adding that private companies rely on a flexible wage structure to remain competitive.

"There are all sorts of different regional tariff zones, as well as different wage structures for different drivers," Recker said. "Local public transport drivers come home every night, but it's different for long-distance drivers."

Private rail companies insist they are under more competitive pressure than Deutsche Bahn, which can is state-owned and can rely on stable financial incentives.

"They own the rail tracks. That makes a huge difference for us," Recker said, explaining that. Deutsche Bahn receives a 5 percent discount on the energy it uses because it buys its electricity from one of its own subsidiaries.

"The rules are not fair in the first place," Recker said.

Author: Ben Knight
Editor: Sam Edmonds

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