Schoma Bankruptcy Marks a Significant Blow to the Rail Industry

Schoma Company Declares Bankruptcy Amid Challenges in Germany’s Rail Industry. This was reported by the railway transport news portal Railway Supply.

Schoma has filed for bankruptcy in the Zieke court, despite having orders in place. The company warned that starting next year, it would be unable to pay its 95 employees or meet its financial obligations.

A 29-hour workweek and wage cuts did not yield the expected results. The company is now considering selling its business along with its order portfolio.

Founded in 1930, Schoma specializes in the production and modernization of tunnel locomotives, shunting locomotives, and track equipment.

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Over nearly a century, the company has delivered more than 7,100 rolling stock units. This bankruptcy marks a significant blow to the country’s rail industry.

The Impact of Schoma’s Bankruptcy on Germany’s Rail Industry

Earlier in 2023, bogie manufacturer Transtec F&E Vetschau also closed after facing financial difficulties due to disrupted supply chains and rising steel and energy costs.

Germany’s rail sector is struggling. In the first half of 2024, Deutsche Bahn (DB) reported an operating loss of 1.2 billion euros.

DB’s debt has increased by 14 billion euros since 2016, reaching 34 billion euros.

DB’s CFO, Levin Holle, announced that the company plans to reduce its workforce by 30,000 employees over the next five years.

Germany’s 2025 federal budget, approved during the summer session, sparked a heated debate in the rail industry. Instead of infrastructure subsidies, DB will receive a 4.5 billion euro loan to boost shareholder equity.

This decision has been criticized by the National Transport Companies Association (VDV), which predicts bankruptcies among operators, and by the German Railway Industry Association (VDB).

The VDB also highlighted uncertainties around long-term investments and called for the creation of a railway fund for stable annual financing.

Manufacturers have long warned that rising energy and material costs, along with supply disruptions, pose a serious threat to the survival of Germany’s railway industry.

Thus, the current situation, exacerbated by external factors, jeopardizes the future of German railways and their key players.

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