Strike over job losses at Deutsche Bahn averted - for now

In March 2000, German Railways (Deutsche Bahn AG) announced plans for a massive reduction of jobs. The plan almost provoked a strike, but this was averted at the last moment by an agreement to cut costs without a further reduction of personnel. Nevertheless, it soon became obvious that the agreement has not solved the basic problems, but has only guaranteed social peace for the present.

Plans to restructure German Railways (Deutsche Bahn AG, DB AG) (DE0001234F) have again caused insecurity among employees and put the company in the spotlight in early 2000. In March, Klaus Mehdorn, chair of the BD AG board, announced further structural reform plans which included handing over regional traffic to external medium-sized firms and making a large number of redundancies. The former plan, which would lead to outsourcing of parts of DG AG, was defended by Mr Mehdorn as the only alternative to the closure of smaller lines. He called the plan an "offensive for small and medium-sized firms" (Mittelstandsoffensive) which would allow DB AG to cut costs and at the same time act in a more customer-oriented way. According to Mr Mehdorn, it could be necessary to cut up to 70,000 jobs out of DB AG's total of 240,000 in order to reduce annual personnel costs by a fifth, to DEM 14 billion, so as to reach cost-cutting targets by 2004. Mr Mehdorn stated that the exact number of job losses would be determined by the attitude of the rail workers' union (Gewerkschaft der Eisenbahner Deutschlands, GdED) and its readiness to accept new working time regulations. He threatened to abandoned the company's "pact for jobs" (DE9810277N) which was due to be effective until 2002, if GdED did not agree to his programme of cuts. GdED firmly refused these plans and started to prepare a strike for the last weekend in March. According to Norbert Hansen, chair of GdED, railway workers can accept neither redundancies nor pay reductions which would negatively influence their standard of living.

Against the background of the strike threat, the board of DB AG and the unions reached an agreement on the day before the formal announcement of industrial action was due. The agreement states that the rehabilitation of the company will not be based on redundancies, and provides for:

• reduction in personnel costs by DEM 3.6 billion without redundancies. The workforce is to be reduced in a socially acceptable way, through labour turnover;

• extension of the "pact for jobs" until 2004;

• no general reduction of working time with cuts in pay; and

• no wage freeze.

In its initial reactions, GdED assessed the outcome of the negotiations as "satisfying" and called off the strike. However, it quickly became apparent that the conflict had been resolved only on the surface, with both parties differing as to the details of the agreement. While Mr Mehdorn stated that GdED had accepted giving up Christmas bonuses and holiday pay and that the parties had laid down the sums at stake in the next bargaining round, Mr Hansen said that these points had not been part of the agreement. He emphasised that the outcome of the next round of bargaining was open. He expected that some management demands would be raised when the bargaining started on August 2000 and made clear that GdED would carry on its resistance to the company's plans. This continuing resistance was evidenced by recent protests against the announced reduction of 1,000 training posts. DB AG had 21,000 training posts at the beginning of the railway reform, which has fallen to around 12,000 today.

Mr Hansen warned Mr Mehdorn against burdening the forthcoming negotiations in advance by presenting "false" statements to the public. Although GdED has asked the government, as the owner of the railways, to intervene in the conflict in order to keep social peace within the company, the Federal Minister for Transport, Reinhard Klimmt, stated that the government would not provide any further financial support for the rehabilitation of the railways. He further doubted that DB AG would be ready to be floated on the stock exchange in 2004, as planned, because it is not guaranteed that the company will be able to finance its investments on its own. This attitude brought a public controversy, because the policies of the federal government concerning the transport and traffic system are seen as extremely unbalanced. While all railway spending is charged to the account of the railways, both road transport and air traffic are in effect subsidised though road maintenance by the government and lower fuel taxes.