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The German government and the country’s biggest companies were readying for disruptions to their telecoms systems as staff at Deutsche Telekom looked set to vote in favour of a strike Thursday.

Industrial action by services union Verdi would escalate a dispute with management, which wants to cut the pay of one quarter of its German workforce, or about 50,000 staff, to regain competitiveness.

Lower-cost rivals have lured more than 2m customers from the former monopoly in the past year and Telekom chief executive René Obermann has warned the group could be split up if this continues.

The group shocked investors with two profit warnings since August and many fear that a strike could herald a third. Industrial action could cost Mr Obermann his job after less than a year in office.

A union spokesman said Verdi was confident of getting the green light from three quarters of the 20,000 union members who would be affected, as required by law. Corporate clients would be the focus of the strike, he said.

Insurer Allianz, chemicals company BASF and carmaker DaimlerChrysler are among 160 multinational Telekom clients that could have problems getting phone lines fixed or new ones installed.

But some were keen to play down the possible effect of Telekom’s first full-blown strike since privatisation in 1996. A spokesperson for Daimler said “emergency plans” were in place if needed.

A spokesman for the government, Telekom’s main shareholder with a third of stock, refused to “speculate” about possible effects on the G8 meeting. Berlin has so far backed Telekom management.

Since the start of the strike ballot on Monday, Verdi’s chief negotiator Lothar Schröder said the union would target Telekom’s corporate clients over private customers to keep public opinion on its side.

The union broke off talks two weeks ago, dismissing as “unacceptable” a softened demand by top management to cut wages 9 per cent over two years in return for a limited job guarantee.

Senior management for the moment at least does not see Telekom’s bottom line threatened. They note the group can implement the pay cuts without union consent from July 1 as planned.

Copyright The Financial Times Limited 2017. All rights reserved.
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