DSB CASE
WHEN A NATIONAL INSTITUTION BECOMES A PUBLIC AFFAIR
ON tracK FOr cHaNGe
W
hen companies play a vital role for a country’s infrastructure and financial stability, the implementation of new strategies will cause severe changes, not only within the company, but also in society. For that reason, the conclusions of a report on the economy of the Danish railway company, DSB, which unveils a financial state worse than imagined, has received massive attention. The conclusion is clear: the potential for reducing costs in DSB is substantial, and if the cost reductions are implemented in the right strategic context, DSB can get back on a stronger and more efficient track. Due to a cutback in contract payments of 300 million Danish kroner, the Danish Ministries of Finance and Transport decided to get DSB’s
april 26, 2011
March 17, 2011
Chairman of the board,
CEO Søren Eriksen is laid
Mogens Granborg, retires for
off due to DSB’s financial
health reasons
difficulties
May 9, 2011 Peter Schütze is announced as the new Chairman of the Board
MarcH
aprIL
May
March 25, 2011
auGuSt May 5, 2011
august 1, 2011
The Danish Ministries of
Karsten Røn Andersen,
Christian Roslev takes over
Finance and Transport com-
Director of DSBFirst and
as new CEO of DSB
mission Quartz+Co to initiate
DSB Sweden, is laid off
an analysis of DSB’s financial situation
april 27, 2011 Director of DSB Maintenance, Bartal Kass, is laid off
finances reviewed to find potential efficiency improvements of at least 300 million Danish kroner. As it turned out, the report ended up disclosing a savings potential of 1.2 billion Danish kroner. “I believe we’re all surprised at the severity and the volume of the company’s financial crisis. DSB is losing money every day, and as management, we actively take on the responsibility of focusing on balancing our finances”, said former CEO of DSB, Christian Roslev, to the Danish newspaper BT in September 2011.
B
eing a 127-year-old, independent, state-owned company with more than 9,000 employees, moving 198 million travellers a year, DSB is the target of merci“I believe that we’re all less public attention surprised at the severity and like so many other the volume of the company’s incumbent railroad operators. In spite financial crisis. DSB is losing of passenger growth money every day, and as and strong operational performance on most management, we actively take of its network, DSB on the responsibility of focusing continues to struggle on balancing our finances”. with its overall image. Bearing this in mind, it was no surprise that the report on DSB’s poor finances triggered an extensive media storm, during which every topic – from how many hours a day the locomotive driver works to how expensive the old DSB headquarters are – was scrutinised.
D
ue to meticulous data presented in the report, the debate about DSB’s future has been surprisingly constructive. DSB’s management has openly acknowledged the results in the report, announcing that the company aims to realise combined savings of 1 billion kroner over the coming years. “It has been essential for us to find a solution that won’t have an adverse effect on the passengers.
We believe that with this plan, we have found a way to succeed,” Jakob Kjær, Head of Finance and acting CEO, explained in DSB’s employee magazine in February 2012. As part of this effort, the management announced that after negotiations with the unions, the company will cut 1,000 positions over three years, bettering DSB’s finances by 440 million kroner. Other consequences are still uncertain. At the time of writing, DSB is waiting for its third CEO in less than a year to take office. The 240-year-old buildings which have been DSB’s headquarters for a decade are now up for sale in the hope that this will bring about significant savings. The last year has been extremely tough for the national institution. However, a crisis is also a possibility for a new beginning, and DSB is more than ready to add a more efficient economy to its impressive passenger growth.
May 1, 2012 December 12, 2011 September 22, 2011
the position of CEO in DSB The workmen at DSB are
October 6, 2011
on strike, and the trains run
The report from Quartz+Co is disclosed to the press. The
As a part of their efficiency
report describes a savings
programme, DSB puts their
potential in DSB of 1.2 billion
head offices in Sølvgade up
Danish kroner
for sale
september
Jesper T. Lok, former director in Maersk, takes up
october
irregularly. The strike lasts for three days
december
february
September 22, 2011
February 2, 2012
The CEO, Christian Roslev,
DSB reaches settlements
admits that the financial situation is worse than expected and announces that layoffs may be coming
October 24, 2011
with several unions to improve the financial situation. This includes
Christian Roslev retires from
abolishing around 1,000
his position as CEO in DSB
positions
with immediate effect for health reasons
may