The German railway manufacturing sector is not just powerful but also well-structured, more so than its French counterpart. German reunification at the end of the Nineties acted as a powerful stimulus for  industry because of the urgent need to bring the ex-GDR production structures up to standard. Yet this is only part of the explanation,  the other reason being that this industry, as now structured, has become a  spearhead of the German economy.  Whilst France today has some 1200 companies with a turnover partly generated by rail-sector activities, few among them post annual results of € 50 million or more In Germany by contrast some twenty  companies boast an annual turnover in excess of € 100 million and some one  hundred a turnover of between € 50 and 100 million. This statistic , produced recently by  FIF Delegate-General Jean-Pierre Audoux, suffices in itself to explain one of the strengths of this industrial  sector across the Rhine!

Today German railway manufacturing industry, the world's second largest , boasts a global turnover in excess of € 10 billion annually and employs some 50 000 people...or the equivalent of its French and Italian counterparts combined. German exports alone match the aggregate French railway production volume with a turnover of some €6 billion. Already in 2003-2004 the German railway manufacturing sector contributed € 9.9 billion to the national economy including 45% earned from exports. True, in 2004 the sector did shed 2000 jobs, followed in 2005 by plans to trim the workforce by a further 4500.... But a buoyant domestic market, coupled with orders from the Regions and new operators whose number exceeds 360 at the present time, has helped the sector overcome these difficulties.

On  top of this and in the wake of the manifold problems  encountered during the December 2010 - January 2011 wintry period, DB had decided to invest € 44 billion in infrastructure upgrades and procurement of new trains.  Siemens for example thus received confirmation in 2011 of a € 5.5 billion order for 220 ICx sets, and deliveries started that same year. For its part, Canadian train builder Bombardier accounts for 50% of all jobs in the German railway manufacturing sector, which shows how important a player it has become on this particular market. Hardly surprising, given these facts, that its European HQ should be located in Berlin!

Competition on unequal terms! The fact remains that Germany, like France, is wondering what the future holds for its railway manufacturing base, particularly against the background of strong competition from Asian companies fronted by Chinese operators. Already in 2010 the two trade associations spearheading the leading sector companies in the respective countries , namely FIF in France and VDB in Germany - had pleaded among other things for  Japanese firms to be barred  from tendering calls issued by European public entities, resting their case on Directive 2004/77/EC Article 58. It will have taken two years for the doors of the Japanese railway market to half-open with the recent shortlisting of Alstom and Thales for  a state-of-the-art signalling system (contract worth €30 million) on the JR East Joban-Tokyo line section (30km). For the record, Hitachi - which  has already secured the UK Agility Trains contract (worth € 5.2 billion) for 530 coaches is now bidding for a DB contract involving 60 trains for the Hamburg S-Bahn. In these very columns the DB Chairman had  previously confirmed his determination to open the domestic market to overseas train-builders but the fuss kicked-up particularly by Siemens at the time forced DB to stiffen its stance with respect to Japan.

An Airbus-style solution for rail, another brainchild promoted by a group of French MPs and   subsequently espoused by FIF and VDB, has not really caught-on. The "big" idea at the time was to safeguard the interests of the major European railway manufacturers. Yet since this initiative was first unveiled in 2011, the sad reality is that the whole concept has met with nothing but a lukewarm response. That said, open access to the European railway market will necessarily create major difficulties for operators and manufacturers alike across the "Old Continent" given the aggressive pricing policies adopted by Asian competitors (whether Chinese, South-Korean or Japanese). Hence the proposal unveiled in 2012 for the setting-up of a Modernisation Fund for railway equipment  manufacturers (FMEF) to be sourced on an equal basis by the French Government, Alstom, Bombardier and Siemens. Since then we've had a news blackout on this proposal, much to the embarrassment of many interested quarters. The question nevertheless remains topical, and deservedly so as it throws open the debate on the level of resources needed by Western railway manufacturers for them successfully to resist the inexorable advance of their Chinese competitors.

Cooperation versus competition

As a first approach, some advocate mutualisation of the research assets of  the major groups pending meaningful progress towards any form of industrial rapprochement. Unanimity over the concept is anything but ensured, and nothing will happen unless Governments apply pressure on the parties  concerned. In the meantime, industrial competition is the prevailing dogma as opposed to cooperation, with each group hoping for survival in the fight against its direct competitors, forgetting that thousands of jobs are at stake across the Continent, not to speak of the technological independence dear to the hearts of governments anxious to   preserve an industrial fabric dating from two centuries, which has contributed to the economic and social development of the Old Continent.