London
CNN
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Germany is bracing for widespread disruption to rail services after train drivers embarked on a record six-day strike on Wednesday. This will wreak havoc on travel plans, strain supply chains and force new contracts. Hitting the sputtering economy.
This is the second time this month that a member of Germany’s GDL trade union has resigned due to an ongoing pay dispute with Deutsche Bahn. The state rail operator said the measures would result in delays and cancellations on long-distance, regional and urban commuter services until Monday. Freight transport will also face “significant restrictions”.
Tickets booked in advance for travel during the strike remain valid for future travel, Deutsche Bahn Added.Passengers can also cancel their reservations You will receive a full refund.
The industrial action, the longest in Deutsche Bahn’s 30-year history, will put further pressure on Germany’s vast manufacturing industry, which is already facing rising energy costs, supply chain delays and rising energy costs. . Interest rates and slump in domestic and foreign demand.
Industrial production, mostly manufacturing, fell by 2% last year, the country’s statistics agency said last week. Gross domestic product decreased, putting a huge drag on the economy as a whole. By 2023, it will be 0.3%, which is likely to be the worst performance among large European countries.
According to Commerzbank Chief Economist Jörg Kramer, The disruption could cost the transport sector “just” 30 million euros ($32.6 million) a day, but the cost would be “if factories have to cut production due to supply shortages.” It will be even higher.
He added that the strike had “strung people’s nerves” and damaged “Germany’s already tarnished reputation as a business location.”
Businesses are scrambling to find workarounds, but industry groups have already warned that these measures will not fully offset the disruption, which will continue along the Red Sea, one of the world’s major trade routes. This overlaps with bottlenecks caused by attacks on shipping.
The German Chemical Industry Association told CNN that the strike is a “major logistical challenge” for the chemical and pharmaceutical industry.
“Railways are extremely important for the industry’s logistics, both in terms of supplying raw materials and transporting intermediate and finished products,” added the trade group, whose member companies employ around 550,000 people.
Of the 16,000 cars manufactured in Germany, a significant proportion are always in operation. The German Automobile Industry Association warned that the disruption would extend beyond Germany’s borders.
“The short-term transition from rail to road is extremely difficult,” a spokesperson said. “The ongoing wage dispute is harming Germany as a business location. We appeal to all parties involved to quickly return to the negotiating table and find a solution.”
Also on Tuesday Deutsche Bahn spokeswoman Anja Broeker called on the GDL to “negotiate and find a compromise.”
“Everything is on the table right now,” she said, including “generous proposals” such as pay increases of up to 13% and shorter working hours.
Deutsche Bahn’s current proposal includes a phased wage increase of 4.8% to take effect in August, followed by a further 5% in April 2025. Then, in January 2026, employees will have or can choose to reduce their working hours to 37 hours for the same pay. Choose an additional 2.7% salary increase.
GDL rejected the offer. The union is demanding that working hours be reduced from 38 to 35 hours per week without reducing pay. They are also asking for a 555-euro (approximately 63,000 yen) monthly wage increase to compensate for inflation and a one-time bonus of 3,000 euros (approximately 326,000 yen).
The union’s chairman, Klaus Wesselski, said: “With its third and supposedly improved proposal, Deutsche Bahn has once again shown that it is continuing its previous refusal and confrontation course.” There is no sign of it happening.”
Germany’s supply chain is already under strain due to the Red Sea crisis. Tesla announced earlier this month that it would suspend production at its giant factory near Berlin for two weeks starting January 29, after attacks on container ships along key trade routes delayed parts deliveries.
In a worst-case scenario, damage from the rail strike could reach 1 billion euros ($1.09 billion), or less than 1% of Germany’s annual GDP, given existing pressures on supply chains, Macroeconomic Responsibility said. said Michael Graemling. Research at the Cologne Institute for Economic Research.
Chris Stern in Berlin Contributed to the report.