ÖBB names new RCA chiefs

Bosses of struggling Federal Railways (ÖBB) have appointed two new heads for loss-making affiliated firm Rail Cargo Austria (RCA).ÖBB CEO Christian Kern decided in November to remove RCA co-chiefs Friedrich Macher and Günther Riessland from executive power as the company’s debts stopped soaring.Kern explained at that time that Macher and Riessland will keep working for ÖBB on halved salaries. This decision has been understood to be a successful attempt to avoid paying millions of Euros of compensation to the businessmen – money to which they would have been eligible in the case of a dismissal before the expiry of their contracts.Now ÖBB announced Erik Regter will head RCA’s marketing and distribution agendas as of 15 February. The Dutchman previously worked for Slovakian electricity provider SSE and Austrian energy supplier Verbund. Kern was a member of the Verbund executive board for years before becoming ÖBB boss in June 2010.ÖBB also said yesterday evening (Tues) that Andreas Fuchs – who joined ÖBB in 1985 – will remain RCA’s CFO and production department chief. The former ÖBB passenger services CFO has already headed those departments temporarily since Macher and Riessland were expelled in November. Former Verbund manager Georg Lauber will succeed Fuchs as CFO of ÖBB’s passenger services agendas.The cash-strapped company explained 47 businesspeople “from inside and outside ÖBB” applied for the two top jobs at RCA. The railway firm vehemently denied claims that there was a “Verbund network” ensuring that former managers of the energy company would be appointed in leading ÖBB positions. “The most qualified applicants were chosen,” a spokesman for ÖBB claimed.RCA has been ÖBB’s main cash cow for years but experienced immense difficulties in the past few years.ÖBB was attacked by businesspeople of the wood-processing and paper-making industries for raising RCA’s shipping rates by around 30 per cent last month.Forst Holz Papier, an industrial pressure group, warned they will assign hauliers to transport an additional five tons of cargo of wood and wood products it initially planned to transfer via railways if ÖBB does not take back the price hikes. The group stressed the envisaged amount equals 200,000 trucks.Kern argued at that time he was pressurised to increase RCA’s service prices since the subsidiary company braced for annual losses of around 300 million Euros.Martin Blum of the Austrian Traffic Club (VCÖ) called for measures to avoid an “avalanche of lorries” rolling over Austria as more and more firms may prefer commissioning hauliers instead of RCA due to its fragile finances.RCA’s difficulties are only part of a bigger picture portraying ÖBB in a dismal state. The state-owned company has debts of 16 billion Euros, and bosses have been attacked over the fact that staff retire at an average age of 54.Kern explained recently his target was to get ÖBB back in the black by 2013. The ÖBB boss said the company managed to reduce its number of employees by 1,063 year on year to 43,650 in 2010. ÖBB is understood to having achieved this by not hiring replacements when older workers retired rather than laying off employees.Kern also said he was optimistic the Austrian government coalition of Social Democrats (SPÖ) and the conservative People’s Party (ÖVP) would bolster ÖBB with an additional 400 million Euros this year. The ÖBB chairman claimed such an investment would help raise the company’s brand value from 150 million to one billion Euros.Speaking to weekly magazine profil, Kern promised the price of tickets will not be upped this year. He said: “Ticket prices should not rise this year. We can save money in passenger services and our infrastructure elsewhere.”Market analysts expect the competition situation in Austria to intensify when Strabag SE boss Hans Peter Haselsteiner’s Westbahn railway project starts operating between Vienna and Salzburg this December.