BERLIN — In a move charged with political overtones, Bombardier Inc. has reversed its decision to close a rail-car plant in eastern Germany after the personal intervention of Chancellor Gerhard Schroeder with Bombardier’s chairman, Laurent Beaudoin, the Globe and Mail reports.
The Montreal-based transportation giant announced yesterday that it had decided to keep its Ammendorf facility in the city of Halle open. Bombardier had said in November that the plant would close this year as part of a rationalization plan aimed at reducing excess capacity in Europe.
Bombardier made the announcement after Mr. Schroeder met yesterday in Berlin with Mr. Beaudoin and Pierre Lortie, the president of Bombardier.
In return for keeping the plant open, Bombardier appears to have received assurances that it would land a significant portion of the 10 billion euros ($13.9-billion) in orders for new rolling stock announced last month by Deutsche Bahn AG,the state-owned railway. The state of Saxony-Anhalt, where the plant is located, has also promised to buy surplus Ammendorf facilities from Bombardier for the establishment of an industrial park.
Bombardier’s initial decision to close Ammendorf, with the loss of 850 jobs, touched off a storm of controversy in eastern Germany, where unemployment is the major issue in the runup to national elections in September.
With the national jobless total expected to soon top the politically sensitive level of four million in a nation of 83 million people, Mr. Schroeder is facing a major challenge from Edmund Stoiber of the opposition Christian Democrats. Mr. Stoiber, the Premier of the prosperous state of Bavaria, has made fixing the economy the theme of his campaign.
Adding to the issue’s political dimension, voters in Saxony-Anhalt go to the polls in April in state elections, where Mr. Schroeder’s Social Democrats are trailing badly in public opinion polls. Unemployment is Saxony-Anhalt is 20 per cent, the highest of any state in Germany.
Mr. Schroeder has made the rescue of the Ammendorf plant a symbol of his efforts to revive the economy, an acknowledgment of the fact that unemployment is rising once again and his electoral fortunes in the former communist East rest on his ability to handle the jobless issue.
Mr. Schroeder has held several meetings on the future of Ammendorf in the past week, including an earlier meeting with Mr. Lortie and another with union officials at the plant.
He plans to travel to Halle today to provide more details of the deal with Bombardier.
Last week, Bombardier said it had delayed the final decision on the plant’s closing but that it still intended to go ahead with the shutdown. Bombardier Transportation has 11 facilities in Germany, and it had decided that Ammendorf was surplus to its needs.
But Lydia Dufresne, a spokeswoman for Bombardier in Montreal, said yesterday that it had taken another look at Deutsche Bahn’s investment program and “we now think this justifies keeping the Ammendorf site,” adding that “we believe that keeping Ammendorf is the best decision.
“We do not have guarantees, but with our assessment we know that we are the leader in the industry in Europe and we are the leader in Germany, and Deutsche Bahn is a long-time client and is satisfied with our products,” she said. “We have good reason to believe that we will receive a good part of the order.”
Mr. Schroeder’s official spokesman said yesterday that Bombardier had been given the assurance that the flow of orders for the plant would remain “stable for the foreseeable future.”
Nevertheless, Bombardier said there would be some reduction in work levels at the plant this year, as it completes the orders already in production and it waits for new orders to arrive.
The plant will continue to handle final assembly of passenger rail cars, but it will gradually convert the facility into the firm’s main refurbishment and repair location in Germany.
Ms. Dufresne said the company still plans to close another smaller plant at Vetschau, also in eastern Germany, with the loss of about 100 jobs, although she said discussions are continuing.
She also confirmed that Bombardier is considering the creation of an international training centre for its transportation division at the Ammendorf site.
Bombardier has emerged as a major industrial employer in Germany following the acquisitions of Deutsche Waggonbau AG in 1998 and of the Adtranz unit of DaimlerChrysler AG in 2001.
The Ammendorf plant, which used to be part of Deutsche Waggonbau, was the pride of East Germany, exporting its rail cars throughout the communist bloc. That market collapsed following the fall of the Berlin Wall, but the German government invested heavily in modernizing the facility before it was sold to Bombardier.
A Bombardier official denied that the decision to reverse the closing of Ammendorf had to do with a $161-million order for locomotives and rail cars it was awarded from the Transport Authority of Lower Saxony last week.
Mr. Schroeder previously held the post of premier in the state of Lower Saxony.
A Bombardier spokesman in Berlin said the contract was decided some time ago, and the work will in fact be carried out at another facility in Kassel in Western Germany.