German rail strike on hold
Financial Times: August 8 2007
By Bertrand Benoit in Berlin
The threat of a crippling railway strike in Germany receded on Wednesday after Deutsche Bahn, the state-owned operator, secured a last-minute court order preventing stoppages nation-wide.
Strengthened by its court victory, DB reached out to the union on Tuesday, offering to appoint two mediators to help both sides resume their talks.
DB’s legal coup came less than 24 hours before GDL, a rebel engine-drivers trade union, was scheduled to launch an open-ended strike, the first in 15 years, initially by targeting freight trains. Economists and business organisations warned this week that a prolonged strike would cost the German economy hundreds of millions of euros if it paralysed the country’s railway system.
The court order, however, which GDL said it would appeal, does not mark the end of what is shaping up as a protracted labour dispute. Union and management have yet to sit down for talks and GDL is expected to seek ways to circumvent the injunction.
“The Nuremberg labour court has upheld our arguments and issued an injunction preventing strikes in both freight and passenger transport until September 30,” a DB spokesman said.
DB had argued that the strike was disproportionate because it only had the backing of 8,300 out of the company’s 240,000 employees yet could still cripple the country’s entire rail infrastructure.
The injunction is a temporary ruling and can be lifted again as the court reviews the substance of DB’s complaint. Manfred Scheel, chairman of GDL, told a television interview his organisation would appeal the order, which applies to long-distance freight and passenger services.
The court could not be reached for comment while GDL did not return calls to its Frankfurt headquarters.
DB is seeking a similar injunction protecting its regional train services against stoppages. A court in North Rhine-Westphalia, Germany’s most populous state, banned a strike in the state earlier this week.
GDL has broken rank with the company’s two main trade unions, which secured a 4.5 per cent pay rise last month, effective from January, and a one-off €600 payment for this year. GDL is demanding a 31 per cent rise for engine drivers and a separate wage agreement.
DB is adamant that it will not grant GDL a separate wage deal, because it fears it would undermine the agreement reached with the company’s main unions and trigger a wage spiral.
A separate deal, which GDL has made a condition of it returning to the negotiating table, would also enshrine the union’s right to call a strike of its members. One of the two majority unions said it would rescind the 4.5 per cent deal if GDL had its way.
Margret Suckale, DB’s head of personnel, said a “wage window” for engine drivers could be accommodated with existing wage agreement, providing GDL members with “interesting perspectives.”
German Court Bans Rail Strike Scheduled for Tomorrow, FTD Says
Bloomberg: Aug. 8
By Andreas Cremer
A German court ordered Deutsche Bahn AG train drivers to scrap plans for a nationwide strike from tomorrow, the Financial Times Deutschland reported.
A labor court in the city of Nuremberg ruled today in favor of an injunction to prohibit strikes planned by the GDL engineers' union, the newspaper said, citing law firm Lovells.
Deutsche Bahn, Germany's state-owned railway, yesterday withdrew a legal petition filed at Frankfurt's labor court and resubmitted the procedure at the court in Nuremberg, southern Germany.
Members of the GDL union voted on Aug. 6 to stage the first unlimited rail strikes in Germany since 1992 to press demands for a pay rise of as much as 31 percent.
Cost of German rail strike ‘to be huge’
The Financial Times: August 7 2007
By Bertrand Benoit in Berlin
A paralysis of German rail transport could cost the economy hundreds of millions of euros a day, economists said, as the country braced itself for the first open-ended strike at Deutsche Bahn, the state-owned operator, which begins Wednesday.
The warning came as DB and the GDL engine-drivers union toned down their inflammatory rhetoric of the past two days. Although they are unlikely to return to the negotiating table right away, both said they would consider involving a mediator to help put the talks back on track.
Economists are concerned about GDL’s decision to initially focus on disrupting freight transport, a softer target than passenger services in terms of public relations but possibly more costly to the economy.
Claudia Kemfert, transport expert at the Berlin-based DIW economic institute, said the total cost of an all-out strike at DB could be well in excess of €100m ($138m, £68m) a day. Although DB estimates the costs at €500m a day, even an average figure of €300m would translate to a 5 per cent drop in daily gross domestic product.
Transport is vital to Germany’s highly decentralised economy, whose robust recovery has been driven largely by exports. Although road has a higher share of the freight market than rail, Germany’s motorways and waterways are overloaded in the west of the country.
Sectors such as steelmaking and coal mining, which cannot use roads as an alternative and where production stoppages would result in disproportionately higher costs, would be most affected by the strike.
“Our reliance on rail is immense, which means any disruption could have dramatic consequences,” said Wolfgang Leese, chief executive of Salzgitter, the steelmaker.
Carmakers, which use trains to move half their product, would also be hit hard. Even businesses that use roads exclusively could face higher costs. The federation of road freight carriers in Hamburg, home to the country’s largest container terminal, has warned of rising prices if capacity became scarce. Its sister federation, in the state of Brandenburg, said the strength of the economy was already putting pressure on the network and several transporters were facing staff shortages.
DB’s competitors, which operate mainly in the freight and regional passenger markets, are concerned too. The federation of private-sector railway freight operators said it would sue the GDL for damages if DB’s competitors were unable to operate normally.
“You can make a convincing case that the total cost will be huge,” said Dirk Schumacher, economist at Goldman Sachs in Frankfurt. “It’s not just a matter of train tickets not being sold and freight not making it through. There are many multipliers.”
Nor will the cost be linear. GDL has said it would begin with isolated stoppages and gradually scale up in the hope that the government, owner of DB, will force the company to resume talks.
GDL has demanded a 31 per cent pay rise and a separate wage agreement from that struck between DB and the company’s two largest trade unions last month.
German rail strike to begin with four-hour freight train stoppage
AFX News Limited: 08.08.07
FRANKFURT (Thomson Financial) - Germany's biggest rail strike for 15 years is to begin tomorrow with a four-hour walkout by freight train drivers, according to a report.
The GdL train drivers union plans to keep the timing of the action secret until just before it begins in a bid to maximise disruption, the Sueddeutsche Zeitung reported the union as saying.
Passenger train drivers are unlikely to begin their strike until Monday at the earliest, but the GdL said it could not rule out delays to services as a result of the freight train stoppage, the newspaper said.
The union and state railway operator Deutsche Bahn (DB) say they are open to negotiations and union boss Manfred Schell said he would not oppose the appointment of a so-called moderator to oversee talks, although he ruled out a conciliation procedure, the report said. DB's personnel director Margret Suckale was quoted as saying the company's constant appeals to the union were obviously having an impact.
GdL members voted by more than 95 pct in favour of a strike from Thursday unless DB agrees to their demand for a 31 pct rise and an exclusive collective agreement, which the rail operator's management described as 'ridiculous'.
The Right to Walk Off the Job
Der Spiegel: August 09, 2007
THE WORLD FROM BERLIN
Locomotive engineers in Germany want a huge pay raise, but judges kept Deutsche Bahn workers from walking off the job Thursday morning. Still, commuter trains in Hamburg and Berlin stood still for two hours. Is the right to strike sacred or not?
A looming German rail strike seemed to be averted on Wednesday afternoon by a last-minute ruling by a labor court in Nuremberg, which forbid the engineers' union from striking until after the summer tourist season. But the locomotive engineers sprang a surprise of their own on Thursday morning: commuter rail drivers (S-Bahn), who belong to the union, halted rush-hour service anyway in Hamburg and Berlin. Deutsche Bahn management and the engineers -- who had been squatting for days in opposite corners of the wrestling ring, refusing to negotiate -- now look ready to talk.
The engineers are pushing for a 31 percent pay raise from the national railway, the Deutsche Bahn. They have a small union in Germany -- only 30,000 members belong to the so-called GDL -- but they run a crucial sector of the economy, and a nationwide strike could be devastating. They also earn an average of about €2,000 ($2,565) a month, which the engineers argue is peanuts compared to the responsibility borne by an engineer at the head of a speeding train.
The heart of the struggle is whether the engineers should accept salaries in line with the other unions that serve Deutsche Bahn -- the majority of other Bahn employees recently won far more modest raises -- or negotiate a separate, and much higher, class of pay. "We won't let anyone touch the principle of a unified system of wage settlements," Deutsche Bahn CEO Hartmut Mehdorn said in an interview (more...) with SPIEGEL this week.
German papers on Tuesday -- writing for the most part before news broke of the morning strike -- sound almost unanimously sympathetic with the engineers.
The conservative daily Die Welt writes:
"The right to strike is unquestionably sacred, and this also goes for the engineers' union, which has made fully understandable demands (even if the numbers are arguable). There are, of course, limits to the right to strike, namely wherever a strike would cause unacceptable damage ... But is damage to the national economy deep enough to justify rescinding the (engineers') right to strike? The judges in Nuremburg have said yes ... But this was far from the last word; higher courts will have to deal with the case."
"Deutsche Bahn must quit trying to halt the GDL in the courts, and the engineers need to come to the table. The tactics both sides have used so far will lead to nothing but chaos on the rails."
The center-left Süddeutsche Zeitung writes, not without sarcasm:
"A ridiculously small fraction of employees is holding out for the lunatic demand of a 31 percent raise, thereby splitting the (Deutsche Bahn) workforce. Economic experts have estimated damages in the hundreds of millions of euros; the government has called for a settlement. But the two sides aren't negotiating -- in the absence of any grand hope for success, Deutsche Bahn has ordered its lawyers to grab the union by the neck."
"The showdown is about more than just one union vs. Deutsche Bahn. It's about the foundations of German economic organization. If the freedom to organize (and strike) isn't an absolute right, where and when does it start? ... Small but crucial labor groups will no doubt test this right more often in years to come, encouraged by recent actions by German doctors, pilots and possibly also locomotive engineers. A firm precedent would therefore be welcome."
The leader of Germany's Left Party, Oskar Lafontaine, argues in a signed editorial in the left-wing daily Die Tageszeitung:
"The real earnings of Deutsche Bahn employees have been in free-fall since 2005. Taking into account a lengthening of the work day, wages have actually fallen by around 10 percent in the last year. The engineers' union has reported a loss of real wages over the past three years of nearly 30 percent. In this context the demand of a 31-percent raise doesn't sound at all shrill."
The left-leaning Berliner Zeitung writes:
"Germany sees some of the fewest strike days among European countries -- not least thanks to the fact that different labor groups can sign their own wage contracts. No one can keep Deutsche Bahn and the GDL from taking their dispute to the courts. But it would be advisable for them to sit at the table and keep the tradition of collective bargaining alive, instead of restricting it within a legal dossier."
The business daily Handelsblatt argues:
"CEO Hartmut Mehdorn won a grace period in the courts yesterday ... He should use it. Because his attempt to tame the recalcitrant GDL in the courts started off on the wrong foot -- both politically and legally."
"His case has no hope in the courts. The arguments used by the Nuremburg labor court to stop the strike will be toppled at the next opportunity, according to all legal experts who know the case. The reason is simple: If the courts take away the GDL's right to strike in the interests of its own members, the right to organize and strike guaranteed by the German constitution would no longer be worth a cent."
"Only the big unions in the Confederation of German Trade Unions (DGB) can prevent more and more smaller unions from trying their luck with independent wage contracts -- namely by forging a politics of wage negotiation that accommodate special interests (within the union) rather than levelling wages out."