German Rail Service Resuming After Strike Disruption

(Bloomberg) -- Deutsche Bahn AG is restoring full rail service after suspending all German long-distance trains on Monday due to a strike over pay by the EVG union that also affected some local, regional and freight lines.

Long-haul traffic is gradually resuming following the walkout’s end at 9 a.m. local time, Deutsche Bahn said. Passengers should expect restricted service throughout the day, particularly in Bavaria and North-Rhine Westphalia, the company added.

The EVG broke off wage talks in the early hours of Saturday morning, saying Deutsche Bahn management had failed to make an offer that met the demands of its members. The train operator said it’s ready to restart negotiations at any time and the union responded by saying it is considering returning to the table on Tuesday afternoon. Deutsche Bahn offered a pay increase of 2.5 percent as of March 1, 2019, but the union wants 3.5 percent.

“The vehemence of the warning strikes showed how upset our colleagues are,” said EVG Managing Director Torsten Westphal. “The workers keep rail traffic running day after day under the most difficult conditions. For that, they deserve reasonable working conditions and good pay.”

Hiring Bottlenecks

The stoppages are the latest evidence of tightness in Germany’s labor market. Unemployment is at a record low and companies are struggling to find qualified personnel. The problem is acute at Deutsche Bahn, according to the GDL train drivers’ union. About half the company’s workforce is set to retire in the next 10 years and there’s a shortage of trainees, the union told Bloomberg in October. While wages have been raised, it wants still more of an increase.

Hiring bottlenecks are finally pushing up pay, which has been unusually slow to climb even as the economy records generally solid growth. In a sign pressure is increasing -- which ultimately should feed through to headline inflation -- German labor costs rose 2.7 percent in the third quarter from a year earlier, data published on Friday showed.

Rail customers can use their tickets for Monday travel through Sunday and can get a full refund if they are unable to make their journey as planned, Deutsche Bahn said.

©2018 Bloomberg L.P.