Busy buses Trains Showing the Strain

Deutsche Bahn's Ulrich Homburg must find a way to lure back passengers who have grown disillusioned with the county's overpriced, strike ridden train system.
Deutsche Bahn's Ulrich Homburg, head of passenger travel at the German firm.

Ulrich Homburg, responsible for passenger transport at rail road operator Deutsche Bahn, is not inclined to celebrate. For months now, strikes have commanded his attention. Emergency timetables have come one after another. Not the perfect time for ideas – however good – at the state-owned railway company.

But that’s exactly what the Deutsche Bahn has to come up with – and fast.

On Monday, Mr. Homburg will present his ideas for the company's long-distance bus operations. He needs to deliver a bigger proposal for the rail company's long-distance rail travel operations in three weeks. Amid this tight schedule, his personal anniversary may well be neglected — this February, Mr. Homburg has been working at Deutsche Bahn for 15 years.

This might not have been so unusual in the past. But nowadays, it is. Mr. Homburg is the longest-serving current member on the management board. Most top managers didn’t survive the last large restructuring of the upper echelon by the chief executive officer Rüdiger Grube. Mr. Homburg, on the other hand, was moved up a level, although he is not part of Deutsche Bahn's executive board.

Many fear the government's minister of transportation fear the railway has lost entire generations of young people as customers forever.

Now, with the long-distance bus strategy, he has reached a decisive crossroads. If he fails to meet the challenge, then there is little likelihood of a 20th anniversary celebration. Deutsche Bank's train services has come increasingly under pressure from long-distance bus companies, who offer tickets at lower prices.

Trained as a civil engineer, Mr. Homburg started his career at Deutsche Bahn as a marketing specialist for local transportation, then he was head of the subsidiary for regional transportation, and since 2009 he has been responsible for all passenger travel — as a management board member of the subsidiary Mobility Logistics. The wiry 59-year-old is even mentioned repeatedly as a candidate for the post of chief executive. The only problem up to now: the current head of the company, Rüdiger Grube, is the undisputed boss and has the backing of the German chancellor.

But another reason exists why Mr. Homburg is more likely to continue working as chief operating officer. As casual as Mr. Homburg likes to appear, just as easily he can offend people.

For example, two years ago when the controversy escalated between the railway and Siemens because of delays in delivering the high-speed ICE trains, Mr. Homburg immediately took on the entire industry. He uttered such devastating statements as “The entire industry has a problem.” The industry prefers to see the railway manager from the rear — when he goes out the door.

 

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Diplomacy is not his strength. Last autumn, when with their first short strikes the engineers shut down rail transportation for only one night, Mr. Homburg found the action to be “extraordinarily perfidious” because its effects lasted far into the next day.

No doubt about it: He is a man of brief and blunt statements. When chaos broke out on Berlin's rail system because of neglected maintenance, he fired the entire management board without further ado.

Now Mr. Homburg himself is under fire. His own words must haunt him — because he totally underestimated the boom in long-distance bus travel. With its brands IC Bus and BerlinLinienBus, Deutsche Bahn is lagging far behind the market leader Meinfernbus-Flixbus.

Mr. Homburg was firmly convinced the newcomers would engage in a merciless price war and, through “devastating competition,” would destroy themselves in a short time. A grievous error. In the meantime, the sneakers-clad start-up entrepreneurs are showing the well-dressed railway manager how to get things done.

Many, including members of the railway supervisory board, Mr. Grube and even the government's minister of transportation fear the railway has lost entire generations of young people as customers forever. And so Mr. Homburg had no choice but to develop an alternative concept with due haste.

 

 

In subdued tones, Mr. Homburg acknowledges that “long-distance buses are here to stay.” Then he immediately makes it clear that “a suitable point for action has arrived.” Under no circumstances does he intend to turn the playing-field over to a “market-dominating provider.”

For a company with annual sales of €40 billion, or $45.3 billion, the situation is truly embarrassing. Almost 20 million customers travel by bus. And the railway company just watches. Now Mr. Homburg is trying to turn the tide. Deutsche Bahn intends to enter the fray vigorously and fight for long-distance bus customers. This is also a first important building-block in the new long-distance travel concept that Mr. Homburg must soon present. Boom times on the rails are a thing of the past. The number of train passengers is declining. The railway company has to come up with some ideas. The pressure is on Mr. Homburg.

The man is used to hard knocks, especially when trains are canceled in close-knit succession or break records for delays, when passengers collapse because of defective air-conditioning systems, or striking engineers shut down the entire system. But this time, the issue is not crisis management. Now Mr. Homburg must offer concepts. For the railway of the future. The question is whether the thundering, thumping Mr. Homburg is up to this job as well.

 

Dieter Fockenbrock is Handelsblatt's chief correspondent for the companies and markets desk. To contact the author: [email protected].