Aid proceedings
EU Commission approves billions in aid for DB Cargo
Following a decision by the EU Commission, the railway’s ailing freight transport subsidiary must stick to its restructuring program. Thousands of jobs will be lost in the coming years.
For years, the federally owned Deutsche Bahn has offset the millions in losses of its ailing freight transport subsidiary DB Cargo – the EU Commission is now putting a stop to this practice. However, DB Cargo does not have to pay the money back. The authority announced that the compensation payments made so far amounting to around 1.9 billion euros are in line with EU state aid regulations. In addition, Cargo remains a wholly owned part of Deutsche Bahn. However, the competition authorities imposed strict conditions for this.
From January onwards, the Cargo subsidiary, which is struggling economically, will have to make do financially without the parent company’s resources. The commission said that the profit transfer and loss transfer agreement, which governed the transfer of losses, was terminated next year. The authority initiated the so-called aid procedure in 2022.
Cargo wants to cut at least 2,300 jobs
The Commission approved the assistance provided so far, subject to DB Cargo continuing with its ongoing restructuring. In October, after months of dispute, the company agreed with employees to cut around 2,300 jobs. Even back then, the company had not ruled out the possibility that further jobs could be lost.
In addition, new business units are to be founded in order to be able to focus more closely on customer needs. These are the steel, automotive, chemicals and raw materials as well as consumer goods segments.
At that time, the subsidiary had moved away from the originally planned outsourcing of so-called combined transport – such as container traffic from seaports or terminals. Outsourcing was one of the main points of contention between the employers and the works councils.
The EU Commission’s communication suggests that this could now become necessary after all. The commission therefore wants DB Cargo to sell parts of its fleet, i.e. locomotives, and company investments in order to consolidate itself economically.
Cargo: The Commission’s decision provides momentum for its own plans
The Federal Ministry of Transport expressed itself positively about the decision of the EU competition watchdog. “This now provides clarity for the future of the company,” said a spokeswoman. “All those involved agree that the economic crisis that has been going on at DB Cargo AG for years must urgently be brought to an end.” The ministry will work closely with the Commission and the company to ensure implementation.
DB Cargo itself described the EU’s decision as a “strong tailwind for the transformation”. “It confirms the course we have already taken and underlines its importance. For DB Cargo, this clearly means consistently driving forward the transformation,” said company boss Sigrid Nikutta.
DB Cargo says it has 31,000 employees. The company has been making heavy losses for years. In the first half of this year alone, the operating loss before interest and taxes (EBIT) was more than 260 million euros.
dpa
Source: Stern
