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German rail strike averted

COLOGNE, (Germany): German railway workers and the loss-making company's management said on Friday they had reached a last-minute agreement on a job-protection plan and would scrap plans to stage token strikes on Saturday.

Officials from the union and railways management said late on Friday after 10-hour-long talks that they had reached a satisfactory agreement. There has not been a major rail strike in post-war German history.

Norbert Hansen, chairman of the GdED railway workers union, said the union had achieved its goal -- assurances that there would be no layoffs as part of management's efforts to cut nearly four billion marks ($2 billion) in staff costs by 2004.

Deutsche Bahn AG Chairman Hartmut Mehdorn said that management had reached a sound foundation for further talks over the next two months.

Deutsche Bahn, Germany's largest employer with 250,000 workers, wants to cut staff costs by 2004 in the run-up to a planned flotation.

The rail workers had threatened to halt rail traffic in a major German city, with Hanover or Hamburg considered likely targets, unless management gave assurances that cost-cutting plans would not involve mass layoffs.

The workers, fearing that 70,000 jobs could be cut, had also threatened to expand the strikes to an entire region.

"The massive protest campaign led to this breakthrough," said union leader Hansen at a news conference. He said wage increases in the coming years would be moderate, but that workers would not be forced to settle for a wage freeze.

Mehdorn said at the news conference that the employers agreed with the company's goal of improving its results by 8.4 billion marks over the next four years. That meant earnings had to improve by five percent per year.

"It has been agreed that these measures will be done in a socially responsible way to avoid hardship. We have taken an important step forward."

A spokesman for the rail workers union had said just hours before the agreement riday that talks were near collapse and token strikes could be called as early as Saturday.

Deutsche Bahn was set up as a private company in 1994, although it is still owned by the government. It had a deficit in 1999 for the first time. The operating losses totalled 170 million marks ($85 million).

Deutsche Bahn is planning a stock market listing in 2004.-Reuters