Deutsche Bahn

The German National Railway Company, Deutsche Bahn AG, was founded on January 1, 1994, taking over from the state railways of Germany, the Deutsche Bundesbahn (“German Federal Railways”) in West Germany, and the Deutsche Reichsbahn (“German State Railways”) in East Germany. Its origins lie in the establishment of the railway network in Germany that started with a steam locomotive in Bavaria running between Nürnberg and Fürth in 1835 and the first long-distance railroad from Leipzig to Dresden in 1839.

When the German Empire was founded in 1871, there were a number of state railways operating in various parts of the new country. To make this easier to maintain, the Deutscher Staatsbahnwa-genverband (“German State Railway Wagon Association,” or DSV) was created to standardize the wagons used. German railway expertise was outside Germany, with German engineers working in the Ottoman Empire before World War I, especially on plans to build the Baghdad Railway and the railway to Mecca (which was bombed by T. E. Lawrence). In 1920 standardization of the network continued with the formation of the Deutsche Reichsbahn; in 1924 it became the Deutsche Reichsbahn-Gesselschaft (“German State Railway Company” —DRG), which continued until 1945.

By the end of World War II, the network had been seriously damaged, and Germany had been divided into four zones. Each of the occupying powers established their own network with West Germany, from 1949, forming the Deutsche Bundesbahn, and East Germany retaining the old name, Deutsche Reichsbahn. Technically, the Deutsche Bundesbahn also had access to the railway that went from the West German-East German border to West Berlin, although the line was owned by the East Germans. It was the closing of this line in 1948 that contributed to the Berlin Blockade and the subsequent Berlin Airlift.

With the reunification of Germany on October 3, 1990, there was a need to unify the network that operated with different locomotives and rolling stock, but had the same gauge. This was the reason for the establishment of Deutsche Bahn AG in 1994 as a public limited company, although all the shares were owned by the government of the Federal Republic of Germany that had long planned a privatization of the company. However, before that could be achieved, an extensive administrative railway reform, or Bahnreform, took place. Initially this saw the structure changed to that of a private company, and then in 1999, the track, personnel, and assets were divided into five subsidiary organizations.

The Deutsche Bahn Reise & Touristik AG (later renamed the Deutsche Bahn Fernverkehr AG) handles long-distance passenger services, with the Deutsche Bahn Regio AG covering regional passenger services. Deutsche Bahn Cargo AG (now Railion AG) provides freight services, Deutsche Bahn Netz AG runs the railway system, and Deutsche Bahn Station & Service AB controls the stations. Hartmut Mehdom, a German who was born in Warsaw in 1942, has been the chairman since December 16, 1999.

There is much controversy over the plans to privatize the railway network, with the government arguing that it will make the company more efficient and raise fresh capital for an upgrade of the system. However, there are economic and political concerns—[Page 504]first about Deutsche Bahn maintaining an effective monopoly over rail transport, and politically about worries that a privatized company might reduce its labor force. This led to a strike by rail engineers, the first on the railways since the 1992 nationwide strike. With the company worth an estimated €200 billion, it seems likely that the government might sell the shares in several tranches, initially retaining a 51 percent stake, and then gradually lowering this.

...