(Bloomberg News circulated the following story by Chad Thomas on November 8.)
BERLIN — German train drivers started a two-day strike on the country’s cargo service, crippling the ability of companies such as Volkswagen AG and Daimler AG to move goods on Europe’s largest rail network.
Engineers stopped working at noon today and will remain off the job for 42 hours, the GDL union said. Workers threatened to widen the strike next week to local and long-distance passenger trains.
Deutsche Bahn AG and the GDL leadership have hardened their positions in recent days, with the state-owned railway refusing to make a new contract offer and the union for the first time raising the possibility of an indefinite walkout.
“We have received no new contract offer and have had no contact with Deutsche Bahn,” Claus Weselsky, the GDL union’s vice chairman, said in an interview broadcast on German N24 television.
A strike on freight trains could cost the German economy 50 million euros ($72 million) a day, the Berlin-based DIW economic institute said last week. Volkswagen, Europe’s largest carmaker, transports as much as 25 percent of its material supplies via the railway, Christoph Adomat, a company spokesman, said today.
“Volkswagen has some weeks ago informed its managers in an internal message, only as a precaution, on the topic of shortened working hours” in the result of a longer strike, Adomat said. “There has, however, been no decision to shorten work hours.”
The GDL drivers’ union has rejected Deutsche Bahn’s contract offer, which includes a one-time payment of 2,000 euros and a 10 percent raise, calling it “insufficient.” The Berlin-based railway has refused to meet the union’s demands for a wage increase of as much as 31 percent.
Deutsche Bahn, which transported 271 million tons of freight last year, estimates a cargo strike will cost the railway more than 10 million euros a day. German companies should be able to handle a shorter strike because the walkout was foreseeable for a long time, allowing companies to prepare, Eckart Tuchtfeld, an economist with Commerzbank in Frankfurt.
“A strike over one or two days could be shouldered rather easily, while a longer lasting strike, let’s say for a week or more, could hurt the economy,” Tuchtfeld said.
If drivers strike more than six days on freight, commuter and long-distance trains, the damage could run as high as 500 million euros a day, Claudia Kemfert, a transport expert at the DIW economic institute, said last week.
Hardest hit by a strike are German manufacturers such as the car industry, a backbone of the nation’s economy, which must carry supplies between factories within Germany and also finished goods outside of the country for export.
Blow to Carmakers
“The strike is a blow to the German economy, especially for the automobile industry, automobile suppliers and chemical industry,” Klaus Zumwinkel, Deutsche Post AG’s chief executive officer, said in an interview. “We are also potentially impacted in part.”
Wolfsburg, Germany-based Volkswagen uses 2,000 railway cars daily to transport goods within Germany, Adomat said in a telephone interview. “We are in close contact with the Deutsche Bahn to keep the logistical supply chain running normally for as long as possible,” he said.
Stuttgart, Germany-based Daimler AG, the world’s second- largest maker of luxury vehicles, mainly used trains to transport finished Mercedes-Benz cars for shipment overseas, Florian Martens, a company spokesman, said in an interview..
“We have been monitoring the situation for weeks and months now,” Martens said. “We have got plans in the drawer to react.”
Going to Court
German train drivers last week gained the right to strike on Deutsche Bahn’s freight and long-distance trains, after winning an appeal of an earlier court decision limiting walkouts to local trains. The railway, which had also appealed the original ruling, sought to block all strikes. Deutsche Bahn is now considering asking Germany’s highest court to rule on the matter.
“If the walkout lasts for a longer period of time, it could bring about some hardships,” said Joachim Goldberg, the managing director of Cognitrend GmbH in Frankfurt. “We’ll only know to what degree that’s the case, when we see exactly what takes place and just how successful the union is.”
The railway agreed on July 9 to give the 134,000 members of the Transnet and GBDA rail unions a 4.5 percent pay increase. The GDL reiterated yesterday that it is seeking a contract separate from the one reached with Transnet and the GDBA, while Deutsche Bahn said any agreement must be “within the framework” of that accord.
Munich-based Wacker-Chemie AG, the German maker of silicon wafers used in microchips and chemicals for consumer products, transports 40 percent of supplies and finished products via Germany’s rail system, Christof Bachmair, a company spokesman, said in an interview.
“We believe we can manage quite well if the strike lasts a few days,” Bachmair said. “If it becomes a nationwide strike that lasts a couple of weeks, it will look quite different, not only for us.”