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19. 01. 12. - 19:45

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19. 01. 12. - 19:45

ÖBB bullish about employees' early exits

Federal Railways (ÖBB) plans to continue its controversial golden handshake programme for employees.

The state-owned company managed to reduce its workforce level in the past years to 42,700 in 2011 – also thanks to an initiative under which employees who cannot be laid off due to contract regulations are offered extra payments if they retired. The company decided to introduce this expensive project to get rid of unneeded workers. Experts are at loggerheads over whether this procedure would help ÖBB to get back on track. The company sustained a loss of 330 million Euros in 2010 – more than ever before in history.

ÖBB chief Christian Kern announced yesterday (Weds) his company would continue approaching some staff to ask them whether they wanted to leave the firm with a bonus. Kern said the compensation ÖBB paid to affected workers in such cases was an average annual salary of 41,000 Euros.

Kern also disclosed that – according to preliminary figures – ÖBB managed to lower its losses to 28 million Euros in 2011. Write-offs are responsible for the ÖBB’s ongoing struggle of getting back in the black. Kern underlined that all three major sections of the firm – its infrastructure department, the personnel railroad branch and its cargo affiliate – achieved profits last year.

ÖBB’s performance was negatively affected in recent years by the loss-making operations of its Hungarian subsidiary company, Rail Cargo Hungaria. ÖBB’s Rail Cargo Austria (RCA) used to be one of the debt-stricken company’s most powerful assets before the firm slid into the red due to poorly planned takeovers in Eastern Europe (EE) and decreasing assignments.

Kern promised to keep abstaining from hiring new staff if employees decided to leave the company. He pointed out that the general end to regulations allowing staff to retire before the regular pension age would help ÖBB to save tens of millions of Euros a year. Social Democratic (SPÖ) Traffic Minister Doris Bures recently revealed that such procedures must stop as of now.

The traffic and infrastructure minister’s announcement is considered as a reaction to appeals by the People’s Party (ÖVP). The conservative party – which forms a coalition with the SPÖ – said financial support for the railroad firm by the Republic of Austria must be slashed to restore the state budget.

The latest austerity measures of the government coalition could force ÖBB to scrap an extensive renovation programme. Bures initially wanted the company to restore 100 stations all over the country. The minister said further infrastructure improvement activities would help the enterprise to operate 9,000 trains a day by 2025. Bures explained this would by an increase by 2,000 compared to current figures.

Kern claimed yesterday that ÖBB was already strongly contributing to the state’s cost-cutting measures. The former Verbund AG manager said ÖBB would spend 750 million Euros less than planned between 2012 and 2016 due to a company-internal savings package. He said investments into ongoing or planned infrastructure measures could be lowered by one billion Euros in the coming years. Kern warned that main projects such as tunnel constructions must not be affected.

Austrian Times

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