The German rail and transport union, EVG, has issued a scathing call for the immediate dismissal of DB Cargo CEO Sigrid Nikutta, escalating a burgeoning crisis within the struggling freight subsidiary of Deutsche Bahn. In a sharply worded letter addressed to newly appointed Deutsche Bahn CEO Evelyn Palla and Supervisory Board Chairman Werner Gatzer, EVG Deputy Chairwoman Cosima Ingenschay argued that the company’s future hinges on Nikutta’s removal.
The letter, reported by Spiegel, accuses Nikutta of presiding over a strategy of “reckless downsizing, trivialization and fragmentation” that has brought DB Cargo to a “dangerous tipping point”. The union alleges a disastrous track record under Nikutta’s leadership, citing a cumulative loss exceeding €3.1 billion before interest and taxes. Contrary to Nikutta’s explanations, the EVG contends that the company’s problems are not attributable to external factors like the COVID-19 pandemic or the war in Ukraine, but stem from “a strategy that simply does not work.
The union’s critique extends to accusations that Nikutta has failed to implement previously agreed productivity-enhancing measures, such as more flexible deployment of train drivers. Instead, the EVG claims that Nikutta’s energy is diverted towards generating media attention rather than finding solutions, fostering a sense among employees and customers that her focus is on self-preservation rather than the company’s success.
Initially, the EVG had supported Nikutta’s appointment, harboring hopes of an economic turnaround. However, these hopes have been dashed, with any positive results solely achieved through one-off effects. The subsidiary’s losses can no longer be subsidized by the parent Deutsche Bahn company, under pressure from the European Commission and DB Cargo is mandated to achieve profitability by 2026 – failure to do so risks potential dismantling.
A restructuring plan commissioned from the consultancy Oliver Wyman recommended a significant reduction in the business related to single-wagon transport. While political pressure has resulted in a requirement for Nikutta to present a revised strategy, the board is reportedly delaying crucial adjustments to the transformation program, hindering the assessment of DB Cargo’s viability. Initial previews of the revised plan suggest another round of widespread job cuts with a persistent lack of innovative business development.
Ingenschay, also Deputy Chairwoman of the DB Cargo Supervisory Board, highlighted her heightened responsibility to critically evaluate management and corporate policy due to the vacancy created by the departure of former Deutsche Bahn CEO Richard Lutz. With positive negotiations on additional restructuring measures required by November 15th to secure new loans for DB Cargo, the union expresses urgency, stating that a concept for the single-wagon traffic, requested in late July, remains outstanding and the deadline is rapidly approaching. “I take my role on the supervisory board very seriously and I cannot close my eyes.
The escalating dispute underscores the precarious financial situation of DB Cargo and raises serious questions regarding the efficacy of its current leadership and the political pressure exerted on its strategic direction.