13 November 2007

EZA 820: Briefing Note

Germany: Train drivers’ strike – another sign of wage diversification



The announcement by the German train drivers’ trade union GDL of their intention to extend their strike to goods transport 08Nov is likely to force German rail to cave in.
Indicates the resolve of GDL members – against the more moderate forces around GDL head Manfred Schell – to force full recognition and higher wages.
It follows in a similar pattern to the doctors’ strike last year and the air traffic controllers in the 1990s.
The micro impact on customers and for German rail is likely to be adverse in terms of cost, given their vulnerability to the demands of specialist workers
The macro impact is more positive, as it implies more wage diversification outside the large trade unions.


Asset conclusions: higher costs for railway reduces prospects for IPO; macro-impact more positive as wage differentiation enhances labour mobility and growth prospects.

© Graham Bishop