The European Commission (EC) approved a state aid scheme for Germany worth 1.9 billion euros for the country’s rail freight operator DB Cargo. The aid, which should guarantee the company’s financial viability, is dependent on the implementation of a massive restructuring plan.
DB Cargo needs restructuring after an EC investigation, launched in 2022, labelled financial support given by the German government despite the company’s losses as illegal state aid. The recently greenlit 1.9 billion euros scheme is thus meant to support this transformation and ensure long-term economic viability by 2026, Reuters mentioned.
A new look for DB Cargo
DB Cargo’s restructuring entails breaking up the company into six separate business units. They will be Steel, Automotive, Liquids & Bulk, Full Load Solutions and the largest single wagon network in Europe. Combined Transport (maritime and continental) will also remain within DB Cargo’s task, after some pressure from trade union EVG. This restructuring will lead to 2,300 jobs being cut. The company hopes to be once again profitable by 2027.