Der SPIEGEL

Der SPIEGEL

05/22/2010 12:00 AM

SPIEGEL Interview with CEO of Deutsche Bahn

'I Never Thought the Job Would Be Easy'

CEO of Deutsche Bahn, Rüdiger Grube, spoke to SPIEGEL about the recent technical problems that have plagued Germany's national rail carrier. He also discussed plans for expansion, tragedies on the rails, and why he once tried to phone German supermodel Heidi Klum.

SPIEGEL: Mr. Grube, everyday you pick out a few complaint mails from Deutsche Bahn customers and then phone up the people who sent them. Do they get a shock when they hear you on the other end of the line?

Rüdiger Grube: They do. And at first, some don't actually believe that it is me.

SPIEGEL: How do you convince them that it really is you, the CEO of Deutsche Bahn?

Grube: Once I got an e-mail from (German supermodel) Heidi Klum and I thought: This is my chance to talk to a supermodel. Instead, her father came on the phone. He'd traveled on the wrong ticket at the wrong time, and he was angry that he'd had to pay extra. At first he thought I was just pretending to be Grube, that it was some perfidious marketing trick. He didn't believe me until he'd asked about my birthday and astrological sign. By the end, we were talking about producing a show in one of our trains for (Klum's TV series) "Germany's Next Top Model."

SPIEGEL: But there can't be many customers who are quite as forgiving. Since last winter, a lot of passengers have been angry about the unbelievable chaos on German railways.

Grube: You have to look into the reasons: Many glaring technical problems in the train industry had to do with the extreme winter -- which we have now survived.

SPIEGEL: But problems remain. Some trains are running with a shortage of carriages. And when you stand on the platform, you hear the announcement that a train is cancelled for "technical reasons."

Grube: We should be more transparent in that area, too. But do you really want us to shock our passengers by notifying them that someone just killed themselves?

SPIEGEL: Does that actually happen so often?

Grube: Unfortunately, in "normal" times, it happens three or four times a day. And you can imagine what every instance means for the whole ICE (InterCity Express, or long-distance) network. After the German football goalkeeper Robert Enke killed himself, we were getting five or six suicides daily -- for the whole week.

SPIEGEL: But you don't honestly expect us to believe that all the rail chaos in the past few months can be blamed on something as tragic as suicides?

Grube: No, but it's the cause of many of these problems. And we're talking about interruptions to long-distance travel. This accounts for about 10 percent of our turnover but about 90 percent of our image. We operate 255 ICE trains, and since the 2008 incident where an axle broke in Cologne, we've had to shorten the time between wheel inspections substantially -- 10 times more often than we originally planned, in some cases. These trains are high-tech. And incidentally, this winter saw high-speed trains all over the world having problems. The producers are standing by their word to us and are taking on their share of the financial burden of making the necessary replacements. But it takes time. All wheel axles won't be replaced until 2013. Until then we may still have difficulties. Safety is an absolute priority, and we will make no concessions on that.

SPIEGEL: So what will you do until then? Your customers are complaining about trains that are late, or dirty, or else don't turn up at all.

Grube: We must live with this transitional period. During the winter we had more problems because the trains were in for maintenance work iced up. De-icing took between five and 13 hours. Only then could the ultrasonic inspection of the axles, which takes another four hours, begin -- and then only while trains are (electrically) grounded. Which means we couldn't even repair a toilet or a coffee machine during inspection. We easily needed a whole night for an inspection like this.

SPIEGEL: The customer initiative you announced has not really made much headway, has it?

Grube: When you are running a complex business like Deutsche Bahn, you can't just announce a new project one day and realize it the next. We have undertaken a lot already -- special service phone numbers, additional service teams, three-shift operations. We are also leasing trains from neighboring European railways, and we've overhauled the customer complaint management …

SPIEGEL: … but when a train is cancelled, a passenger has to fill out a lengthy form to get money back.

Grube: We aren't the only ones at fault there.

SPIEGEL: So whose fault is it?

Grube: In practice, you need less than 10 minutes to fill out that form. But I still find the paperwork too complicated. We are also working on this, together with passenger associations and private railway operators.

SPIEGEL: How is Deutsche Bahn's battle for punctuality going?

Grube: Every morning at 7 a.m. I get all the numbers -- incidents of delays and other occurrences. Our goal is over 90 percent punctuality. And we are attaining that goal now.

SPIEGEL: How were things last winter?

Grube: A lot worse, unfortunately.

SPIEGEL: The Berlin commuter train network -- or S-Bahn -- doesn't seem to be mastering its technical problems, either.

Grube: My first day at work was May 1, 2009. At 5 p.m. I was notified that an S-Bahn near Kaulsdorf had derailed. That was my first experience with Deutsche Bahn. I was told not to worry, that it would all be resolved by the book.

SPIEGEL: In Berlin, "by the book" seemed to mean "ignore it and play it down."

Grube: Since then we've swapped the whole management out, and we're dealing with the works committee on a basis of trust again. Personally it annoys me, because the manufacturers are responsible for the technical failures. And although it is true that we added our own mistakes to theirs -- with some maintenance mistakes going back to 2004 -- responsibility for everything has been hung on us. The S-Bahn scenario has cost us €222 million ($275 million) so far. By the end of the year it will be €300 million ($372 million). We won't make a single cent there until 2017. However, negotiations with the manufacturer Bombardier are not yet finished.

SPIEGEL: Despite all these technical issues with the Berlin S-Bahn and with the ICE trains, do you still want to buy trains from Siemens?

Grube: The reality is that we need up to 300 new trains for long-distance rail travel. We will place orders for these to the value of €5 billion. It's possibly the largest order a rail operator has ever placed. A final decision on a manufacturer has not yet been made. Aside from all that, though, we'll be spending around €100 million on renewing the ICE-2 trains, which make up about a fifth of our ICE fleet. We'll be renovating toilets and on-board bistros, we'll be replacing seats …

SPIEGEL: ... and hopefully there will also be better mobile telephone reception and seat indicators that actually work.

Grube: We are tackling all this -- bit by bit, step by step. A lot of individual measures must be taken, too. For example, €1 million will be invested in overhauling the coffee machines on ICE trains. These renovations take time, but they are coming.

SPIEGEL: Is it possible to concieve -- from an industrial policy perspective --that the head of state-owned Deutsche Bahn would spend billions on trains made in France or Japan?

Grube: Why not? Of course it would be really sensible if every stakeholder managed to achieve a truly European rail system -- with the same standards, the same requirements for entry, the same competitive conditions. According to our research, there are around 1.2 million people in greater Cologne who would like to travel to London by train at some stage. But we cannot get our ICE trains into the Eurotunnel because the operators in France and England block that stretch of rail with the TGV trains. The ICEs are permitted to travel through every Alpine tunnel -- but, funnily enough, they're not allowed through the Eurotunnel.

SPIEGEL: But Paris can't keep you away from there …

Grube: The conditions for entry to the tunnel are so absurd that only the French trains fulfill them. They say, for example, that the train must be 400 meters long.

SPIEGEL: Why don't you just couple two ICEs together?

Grube: But then there's another rule: The passengers have to be able to walk the full length of the train. So it wouldn't work. It's absurd! Of course new laws are always being thought up to liberalize Europe, but they're never implemented. France doesn't even have a competition authority where we could take our complaints. It's plainly discrimination. That is no way to grow.

SPIEGEL: Is that the reason you want to buy Arriva, the British transport operator?

Grube: The German constitution stipulates that I run Deutsche Bahn according to private-business principles. In Germany we've handed around 20 percent of our regional traffic to competitors. That's what was desired, politically. So I can only grow (the company) abroad. In our industry, at the moment, Europe faces a wave of consolidation. In the end perhaps five or six large companies will be left standing. At the same time, fewer customer itineraries are ending at national borders.

SPIEGEL: Arriva isn't cheap -- €2.7 billion. Why not invest the money in your German routes?

Grube: The one thing has nothing to do with the other. Over the next five years, Deutsche Bahn will invest €41 billion in Germany. That's up to €2 billion per year more than in previous years. We've never done anything like that before. At the same time we need to be well-positioned in other countries. We have to do both things at the same time. Anyway, two investment banks have approved the (Arriva) purchase price for us. And we would be supported by the auditing firm KPMG.

SPIEGEL: Where will the money come from? Deutsche Bahn is still €15 billion in debt.

Grube: Partly from our own funds. And partly by issuing bonds on capital markets. It will be an investment in the future. These will amortize over the next few years, because the acquisition of Arriva will provide us with big opportunities through the opening up of markets.

SPIEGEL: Your strategy is not that different from that of your predecessor, Hartmut Mehdorn. He also wanted to cobble together a global transport and logistics company.

Grube: Why "also"? His strategy wasn't wrong, but in the end, floating an initial public offering at that time (in the fall of 2008) was a miscalculation, because the world was already a different place.

SPIEGEL: What's your personal judgement of your first year at the head of Deutsche Bahn?

Grube: I never thought the job would be easy, but I never thought the first year would be so tough … We faced a number of truly difficult crises: The financial and economic crisis, the problems with ICE, the harsh winter, the Berlin S-Bahn problems, the internal data affair…

SPIEGEL: … which is the reason you have your job in the first place. For years, under Mr. Mehdorn, Deutsche Bahn spied on its work force. Has trust been restored inside Deutsche Bahn?

Grube: There are certainly still resentments and distrust. You can't just rebuild trust by flipping a switch. But I'm attempting to do it by setting a good example. I like to interact with people, particularly in corporations with truly excellent employees.

SPIEGEL: What bothered your predecessor, above all, was political meddling.

Grube: The relationship between Deutsche Bahn executives and the Transport Ministry has certainly improved. One has to see that in a positive light.

SPIEGEL: But maybe you've had to make a few sacrifices? For example, the multi-billion-euro project "Stuttgart 21," which called for digging under half of the city center.

Grube: The finance contract for that project was signed four weeks before my job started. I couldn't stop it. However, because it was the largest infrastructure project in the history of Deutsche Bahn, I at least wanted to take a much closer look.

SPIEGEL: The costs have only risen.

Grube: Exactly. That's why I wanted to review each item, to find ways to make savings. My breaking point now is €4.53 billion. But you also have to realize there was no investment in the Stuttgart station for many years. If I shut down the project today, then according to initial estimates, I would still have to pay up to €2 billion to renovate both buildings and the platform apron -- and then we wouldn't have the benefits we have now! Actually "Stuttgart 21" is the nicest gift the city can receive.

SPIEGEL: Political leaders have accused you, as they accused your predecessor, of doing too little for Deutsche Bahn itself. What do you say to the Free Democrats, for instance, who still want to separate the rail network from rail infrastructure management?

Grube: I'm a firm believer in competition. But an integrated Deutsche Bahn simply makes sense. If we were to privatize the German rail network like they did in Britain, I would not continue as head of Deutsche Bahn.

SPIEGEL: Mr. Grube, thank you for the interview.

Interview conducted by Jörg Schmitt and Thomas Tuma

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