German Steelmaker Threatens to Sell High-tech Train Technology

ThyssenKrupp has warned that German authorities have 18 months to approve the building of a route in Munich for the high-speed Transrapid train, failing which the cutting-edge magnetic levitation technology used in the train as well as jobs could go to China.

"We have to decide whether we're going to close the books in Germany for this technology," ThyssenKrupp CEO Olaf Berlien said over the weekend in Greece.

Row over Transrapid link in Munich

At the heart of the row is the failure of the German federal government as well as Bavaria's regional government to reach agreement over the financing of the around 36-kilometer (22.4 miles) long Transrapid route between the Munich railway station and the city's airport.

Berlien has said that the future of the Transrapid now depends on progress of the possible Transrapid link in Munich, which has been discussed for several years now.

A link in Munich could generate additional sales of around 400 million euros ($506 million) a year for ThyssenKrupp. This compares with required investments of some 1.8 billion euros, which ThyssenKrupp says should be paid for by the state.

China could stand to win

Berlien made it clear over the weekend that ThyssenKrupp, which developed the Transrapid train together with Siemens, is serious about making good on its threat.

"In 18 months ThyssenKrupp will decide whether the technology will go to China," Berlien said. "The Transrapid will then be a German-Chinese project which would mean a technology transfer to China."

He added that the deal would involve either selling the technology to China, founding a joint venture in China or setting up a distribution or marketing partnership with a Chinese firm.

The only functioning Transrapid train worldwide currently is in the Chinese metropolis of Shanghai, where it links the financial district, Pudong, with the airport. Called the MAGLEV line, the train travels up to 430 kilometers per hour.

ThyssenKrupp argues that the Transrapid train can only be sold outside of Germany when a domestic route for the high-tech train is realized. Both the US and the Gulf nation of Qatar have also signaled interest in the train.

"If the link in Munich doesn't become reality, ThyssenKrupp and Siemens will be unable to further develop the (Transrapid) technology," Berlien said, adding that Chinese competition will have developed similar cutting-edge technology within the next five to seven years.

"I hope for the sake of Germany's image as a business location, that we manage to do it ourselves," Berlien said.

The Federal Ministry for Transport has already said that it will work towards a speedy decision on the Transrapid link in Munich.

"At some point you have to get serious"

ThyssenKrupp, Germany's largest steelmaker, has pointed out that the magnetic levitation train doesn't play an important role for the company, saying that its annual revenues of 110 million euros is just a "homeopathic dose."

However, ThyssenKrupp has indicated that the ongoing tussle may end up hurting Germany's image in the long term.

Berlien said that Germany often witnessed long debates over the use of innovative technologies.

"Our mentality in Germany is to look for the fly in the ointment," Berlien said, adding that "at some point you have to get serious."