Grube is not shying
away from these issues and is already proving to be a decisive leader.
In an interview with the German news magazine Der Spiegel on August 12,
Grube says he does not regret taking over from Hartmut Mehdorn as CEO,
but found his first 100 days turbulent. "I was forced to make decisions
far more quickly than I had planned," he told the magazine.
Under
Mehdorn, DB expanded its freight business through a series of
acquisitions of railfreight operators in other European countries, and
Schenker, one of the world's biggest international freight and
logistics companies. Unfortunately, most of DB's freight activities are
now in the red, with all divisions reporting reductions in traffic -
around 25% for railfreight in the first half of 2009 - as well as
revenue.
Despite the problems, Grube says DB will retain all of its
freight activities. Indeed, DB is now setting about the twin tasks of
trying to improve the profitability of its freight divisions and to
integrate them fully into the group, something which hasn't been done
up to now. Even so, Grube is bullish about the situation. "No other
railway in the world has such wide and comprehensive expertise as DB,"
he told Der Spiegel. "We are the envy of our competitors."
Grube is
pursuing his predecessor's burning ambition to privatise part of DB,
but he does not believe the capital markets will be in a position to
support it until 2013 or 2014. Nonetheless he is adamant that the sale
should only go-ahead if it will produce an adequate return for the
government and provide DB with a much-needed financial boost for
capital investment.
Some commentators have complained that the drive
under Mehdorn to prepare DB for partial privatisation has contributed
to DB's problems on the Berlin S-Bahn, which is operated under a
concession by its S-Bahn Berlin subsidiary. The Federal Railway
Authority (EBA) took an unprecedented decision recently to force the
withdrawal of a large part of the fleet because of DB's failure to
check wheels adequately following a broken wheel in May. The resulting
disruption to services is likely to last until the end of the year and
could cost between Euros 50 million and Euros 100 million.
An earlier decision by
S-Bahn Berlin to close three of its six workshops and cut 1000
maintenance jobs looks likely to have contributed to its failure to
monitor the situation and maintain the fleet adequately. Some former
S-Bahn Berlin managers could even face prosecution for consistently
ignoring maintenance schedules.
The crisis in Berlin follows earlier
problems encountered with part of DB's fleet of ICE high-speed trains,
where faulty wheelsets forced DB to withdraw many trains from service
at short notice, throwing long-distance services into chaos.
Grube has
reacted swiftly and decisively by sacking senior managers at S-Bahn
Berlin and taking a tough stance with suppliers, threatening legal
action if negotiations are not concluded satisfactorily. "The
manufacturers have to finally resolve the problems that have arisen,"
says Grube. "It is unacceptable that DB is held solely responsible for
the costs and consequences of dysfunctional products."
But whoever is
to blame for the faulty wheels in Berlin, it is up to the operator to
ensure that safety is not compromised and for managers to react swiftly
to a problem before it spirals out of control as witnessed on the
S-Bahn. DB has potentially done itself a lot of harm in Berlin. You
could not pick a worse place to have such a visible problem if you
tried, right under the gaze of the nation's politicians. Not only will
this knock DB's credibility when it bids for new concessions, it could
also harm its prospects for flotation.
The Berlin fiasco comes quickly
on the heels of the staff spying scandal and the so-called "no-badge"
covert public relations activities. Grube has handed over evidence
regarding the spying scandal to the district attorney and appointed
KPMG to audit the accounts.
Grube insists those responsible for making
serious mistakes must pay the price in order to restore the confidence
and pride of DB employees in their railway and senior managers. These
investigations must be concluded as quickly as possible to avoid
further potential damage to staff morale that protracted investigations
can cause. Some tough decisions still face Grube during his next 100
days.
