The long struggle by trade unions fighting to retain the integrity of the German railways as a single entity appears to have paid off, as Oliver Kaufhold reports

After years of often difficult and tedious discussions, a decision has now been taken regarding the privatisation and future structure of the German railways. The most important aspect of that decision: The company DB AG will not be fragmented. For the employees, this means that their fight for the continued existence of an integrated railway system and against the fragmentation of the company has been successful.

Although legally the rail network and other infrastructure companies (stations, electricity supply, service providers, workshops) will be separated out of the DB AG group of companies, they will apparently not be combined into a state-owned infrastructure company as discussed under the title of the so-called “ownership model”. At the same time, it is said, “DB AG will be given the opportunity to operate and account for operations and infrastructure as one business entity.” In other words: The individual companies that form the group will stay together and DB AG will continue to manage infrastructure and operations under one roof.

This may sound complicated, and it is complicated. How, then, will the model work in practice? The infrastructure companies will be transferred into direct state ownership before the privatisation process starts. Essentially, this is a purely administrative process under property law. As the next step, the government will transfer the right to operate and manage the infrastructure to DB AG. This means that beneficial ownership of the infrastructure will lie with the railway company. In other words, the company will be able to exploit the infrastructure, which will also appear in the company’s balance sheet, while the federal government retains legal ownership.

The details of how the transfer of ownership is to be handled and how the ownership titles are to be distributed remain to be decided. The relevant agreement must clearly define three aspects: First, that the state remains the legal owner of the infrastructure; second, the rights and responsibilities of DB AG in respect of the infrastructure; and third, under what clearly defined circumstances DB AG might lose its rights concerning the infrastructure and may have to hand them back to the federal government.

"The fight for the continued existence of an integrated railway system and against the fragmentation of the company has been successful"

There should also be an agreement on performance and financing. In that agreement the government must define what kind of rail network it wants. The railway company must then commit itself to maintain and develop the rail network in accordance with these stipulations; compliance will be monitored on a constant basis. The government on the other hand commits itself to provide an annual amount of 2.5 billion Euros to maintain the existing network.

On this basis it is more than likely that employment protection measures within DB AG will continue, and negotiations on this subject have already been restarted.

Battle for safeguards

In 2005, the two unions Transnet and GDBA concluded an agreement with the company to safeguard employment. This agreement protects rail workers from forced redundancies until the end of 2010. A number of complex arrangements have been made to achieve this. They ensure that anyone losing their job in the rail company can be offered a different job somewhere else. These arrangements are known collectively as the so called “group labour market”. However, they only work if individual companies that make up the DB AG group, including those responsible for infrastructure, remain under one roof.

A separation of infrastructure and operations would have meant the end for the employment guarantees. Workers recognised this, and so they fought against moves to separate the network of track out of the group.

They had already made sacrifices – generally supporting the implementation of rail reforms in order to safeguard their jobs: During the 12 years since the reform process started, they have seen massive restructuring and increases in productivity. They have accepted reductions in pay and agreed to a one-day-reduction of their annual leave entitlement. You would be hard pushed to find even one railway worker who is still in the same job today as they were 12 years ago. Many workers have learned to live with the fact that they have to travel a long way to work, many have undergone retraining. All this they did in the belief that the company would continue to exist and offer them a future. And this explains the scale of their anger at the prospect of the proposed structural changes in the group.

Rallies and warning strikes

As part of our struggle, to avert these changes, we were not only involved in numerous talks, during which Transnet and works councillors tried to explain the consequences of separation to politicians. We also tried successfully to raise public awareness. In a number of towns and cities – Hamburg, Kassel, Berlin, Munich, Cologne, Leipzig, Dortmund, Saarbrücken, Karlsruhe and Nuremberg – Transnet and its works councillors held rallies attended by around 20,000 rail workers.

"A separation of infrastructure and operations would have meant the end for the employment guarantees. Workers recognised this, and so they fought against moves to separate the network of track out of the group"

During these events, they openly listed their fears and concerns regarding the sell-out of their companies, the loss of their jobs, the descent into unemployment, the lack of future job prospects for young people lacking qualifications. Those rallies attracted a huge amount of public attention. The workers used them to voice their great anger at the course of the political debate. Because instead of talking with the workforce, politicians were talking about the workforce.

New models were presented, one after the other. Parliament held hearings with experts and interest groups – but never with the workers themselves. Many experts who advocated the fragmentation of DB AG based their opinion purely on theoretical concepts. But railway workers know how the railways work: as an interdependent system of infrastructure and operations.

On the collective bargaining level, we addressed our demand to the top management of DB AG. Our demand was clear: the collectively agreed employment guarantees must be secured – in case the organisational structures of a privatised DB AG should differ in any way from its present structures. Originally, management did not see any need to act on this issue. For a long time they argued that it would be better to wait until a political decision had been taken. But we were not willing to accept this. If the political decision had been to fragment, it might have been too late.

In August, after three months and several rounds of negotiations, Transnet and GDBA were forced to announce that negotiations had failed. Independent arbitrators were called in, among them former Federal Chancellor Gerhard Schröder. The arbitrators confirmed that some forms of privatisation would pose a threat to the agreement on employment security.

When another round of negotiations did not achieve any results, we called a number of warning strikes. About 2,000 of our members took part – in Cologne and Dortmund, in Berlin, Munich and Nuremberg, members working in long-distance and regional passenger transport operations, signalling workers, sales centre workers.

So, what has our struggle achieved so far? Railway workers have made it perfectly clear that they are no longer prepared to sit still and watch while their future is being decided. It seems that their struggle has been successful.

Oliver Kaufhold is a press officer for Transnet.