Strikes at Budapest Transport Company in bid to protect services and jobs

Public transport in Budapest came to a virtual standstill on two occasions in April 2008, when trade unions at the Budapest Transport Company held general strikes. Although the strikes were mainly called in protest against planned service cuts and subsequent job losses, they also sought to draw attention to the company’s growing debts and uncertain future. On 7 April, railway workers also ‘coincidentally’ organised a strike, further complicating the situation.

Strike action in public transport

After only a few warning strikes at the Budapest Transport Company (Budapesti Közlekedési Vállalat, BKV) over the past decade, trade unions staged two general strikes at the company in April 2008. The first of these strikes, held on the morning of 7 April, was in fact the first-ever general strike held in the company’s 40-year history; the second strike was held the following week on 18 April. During the strikes, all of the company’s trade unions called for a complete halt to all services. About 95% of BKV’s 13,000 workers joined the strike on both days. However, a number of trams and suburban trains continued to run as some office workers with adequate driving licences provided services, together with a small number of strike breakers; a number of subcontracted bus lines also provided services on the day.

In response to the strikes, the Mayor of Budapest, Gábor Demszky, acting as owner of the company, threatened to contract services out to Volán, the long-distance bus company, during the strike in Budapest. Meanwhile, the Free Trade Union of Railway Workers (Vasúti Dolgozók Szabad Szakszervezete, VDSZSZ), which had maintained a strike alert since March, also staged a strike on 7 April, which ‘happened to coincide’ with the BKV strike (HU0802069I). However, such ‘solidarity action’ was not repeated on 18 April, after BKV’s strike committee flatly refused to accept it.

Trade union demands

The strike united the company’s two major trade unions, along with the most relevant craft union representing bus drivers. The call was originally put forward in protest against the introduction of the so-called ‘parameter book’ – a detailed, general timetable of all of BKV’s services. This measure envisages a reduction in services and is estimated to cut costs by HUF 6 billion (about €23.7 million as at 1 May 2008).

Workers argued that the measure had been decided without their involvement or consent and was contrary to an agreement on staff reductions reached in December 2007; therefore, they insisted that the plan should be abandoned. They also claimed that the proposed service cuts would result in the loss of some 300 jobs. This was clearly unacceptable to the trade unions after last year’s general reorganisation, when the new management implemented an austerity plan to save the company from bankruptcy, causing 1,000 job losses. By the time the company’s owner and management accepted the trade unions’ work-related demands, they had already voted in favour of carrying out the second strike in demand of a resolution of the company’s financial situation, which was close to insolvency.

Details of negotiations

Lengthy negotiations had preceded both strike days to accommodate employees’ work-related demands and also to reach an agreement on essential services during strike action. In relation to the latter, management demanded service levels of 75% and 66% for peak and off-peak hours respectively, in addition to the normal operation of all metro lines. Trade unions offered to operate night bus services only during the strike, which would have represented about 5% of the normal service level, covering almost the entire city. They argued that the higher service level would make the strike virtually unnoticeable, especially since the company had also subcontracted a further 5% of its services, which was not affected by the strike. However, this proposal was rejected by the management, who argued that it could lead to dangerous overcrowding on transport vehicles. As a result, no minimum service agreement was made for these days.

In terms of the trade unions’ main demands, BKV’s management promised before the first strike day to save all jobs. Moreover, Mayor Demszky signed a revised version of the parameter book, proposing a smaller saving of HUF 2.1 billion (€8.3 million). During the second negotiation round, which was held in between the two strike days, two committees of the city council called for the establishment of a totally new parameter book. Eventually, although somewhat belatedly, the company’s owner and management met all of the trade unions’ work-related demands. However, in the meantime, the threat of the company’s bankruptcy in the near future emerged as the main concern of the trade unions – a concern which also raised the interest of the wider public.

Commentary

During the last five years, BKV, which has a HUF 110 billion (€435.8 million) annual budget, has accumulated some HUF 80 billion (€316.9 million) in debt. Ticket sales represent almost 40% of the company’s revenue, a further 50% of which comes from the state budget, while the remainder is funded by the city of Budapest. With a total revenue of HUF 100 billion (€396 million), BKV is facing an estimated deficit of almost HUF 10 billion (€39.6 million) each year.

The Mayor of Budapest has requested that the government provide an additional HUF 18.5 billion (€73 million) in subsidies to balance the company’s finances. However, the government has rejected this proposal, arguing that back in 2002 – when the socialist-liberal coalition came into power – it had consolidated the company and agreed with the city council that it would maintain the company’s fiscal balance. However, in the meantime, the relationship between Mayor Demszky and the government became a sensitive political issue due to the emerging crisis of the coalition government (HU0804029I). These events can partly be explained by the fact that the mayor is a leading figure in the Alliance of Free Democrats (Szabad Demokraták Szövetsége, SZDSZ), the party which has just withdrawn its ministers from the cabinet.

Márk Edelényi, Institute for Political Science, Hungarian Academy of Sciences

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