HUNGARY: BUS DRIVERS' STRIKE IS ANOTHER STRIKE

UNCLAS SECTION 01 OF 02 BUDAPEST 000017 SIPDIS DEPT FOR EUR/CE JAMIE MOORE; USDOC FOR SILVIA SAVICH E.O. 12958: N/A TAGS: ECON ELAB EFIN HU SUBJECT: HUNGARY: BUS DRIVERS' STRIKE IS ANOTHER STRIKE AGAINST AILING BUDAPEST TRANSPORT BUDAPEST 00000017 001.2 OF 002 ¶1. SUMMARY: After a week of sporadic "wildcat" strikes that made bus service unreliable, Budapest Transport Company (BKV) bus drivers officially went on strike January 12, after the company and union leadership failed to come to terms on a new collective bargaining agreement. BKV garners little public sympathy and is in a weak negotiating position amidst a slew of corruption scandals exposing misuse of public funds. As the parliamentary election season heats up before voting this spring, opposition party FIDESZ may try to make BKV's corruption scandals an election issue, yet bringing true reform to BKV will be challenging. END SUMMARY. PORTRAIT OF A COMPANY IN DISARRAY -------------- ¶2. BKV is managed by the local city government and is responsible for providing almost all of Budapest's bus, tram, trolley, and metro services. The company is under heavy debt and cannot operate without central government support. A series of corruption scandals has exposed serious management problems at BKV and angered a public already frustrated over rising ticket prices: --BKV's former HR director, Eleonora Szilagyi Szalai, is currently under arrest and charged with fraud for illegally authorizing herself a highly disproportionate $500,000 severance package last year. Adding to the scandal, Szalai continued to work for the company even after receiving her severance. --Police investigations also revealed that several BKV employees who worked for less than one year received higher severance payments than 51 people who had worked for over 30 years. Some employees were "fired" a few days before becoming eligible for pension, thus making them eligible to receive severance payments. In other cases, indefinite term contracts were treated as fixed term contracts so employees could be fired to receive severance, after which they were rehired. --On December 4, 2009, BKV's former legal director Gyorgy Sziebert was arrested in parking garage after accepting what police allege was a large bribe in connection with a contract. On January 5, BKV fired IT Director Bela Fuzik, also suspected in a bribery case. On January 8 police arrested Eva Horvath, a former mayoral spokesperson, and charged her with misuse of public funds for having received wages from BKV without performing any actual work. STRIKE -------------- ¶3. The former collective bargaining agreement between the company and its unions expired on December 31. The many corruption scandals at BKV have greatly undermined the company's credibility and ability to win concessions from its unionized labor force. In late December, the unions announced a strike to begin on January 12, mostly affecting bus drivers. Leading up to this date, in perhaps an effort to flex union muscle, drivers initiated a series of service disruptions that BKV leadership labeled an illegal "wildcat" strike. On January 5, bus drivers left 270 vehicles parked in depots -- an abnormally high rate -- claiming they were in such disrepair they could not be safely operated. The strike officially began January 12 and bus service was dramatically impacted, with many routes closed entirely. Many tram lines were also closed as tram drivers opted to join the strike as well. The strike's impact was partially mitigated by trolley-buses and metro services that continued operation. It is not yet clear how long the strike will last. GETTING TO WORK: INTIMATE ENCOUNTERS -------------- ¶4. During last week's "wildcat" strikes, as the buses arrived less frequently and full to the point of passengers being pressed up against the windshield, doors, and each other, it became increasingly common to hear the otherwise reserved Hungarians loudly complain: --On one tram line, a group of passengers, previously strangers to each other, commiserated over having to suffer through BKV's labor problems. Referring to the severance pay scandal: "BKV spends money on everything except their drivers and keeping their buses running. How many buses could they have repaired and how many salaries could they have raised with all that money they wasted? And of course, if there is a strike, it will hurt us more than anyone. We just want to get our kids to school and go towork. The drivers should be BUDAPEST 00000017 002.2 OF 002 demonstrating in front of Parliament, that's where the real problem is." --On one packed bus, even the bus driver got involved in the debate. Pushing her way onto an especially crowded bus, one passenger complained, "I pay $55 for my monthly pass and I have a right to be on this bus. BKV is a bunch of thieves. It's a scandal." Referring to the upcoming parliamentary elections, she added, "After the April elections we're going to throw every last one of these corrupt socialists (the current MSZP government) out of power and vote FIDESZ in." Although the passenger was complaining to no one in particular, the bus driver responded to her over his glass partition: "If you think that the elections are going to change anything, you are completely mistaken." The passenger responded, "BKV is a corrupt, criminal company, and I am being robbed to ride this bus. This will all change after the elections." Reaching the end of the route, the driver got in the last word: "I can promise you this, after the elections, absolutely nothing will change." ¶5. COMMENT: Although the drivers' strike has not yet paralyzed the city, those who depend on bus lines have experienced the brunt of the impact and are frustrated. After a series of corruption scandals, BKV finds itself in a position of having little money to offer its unionized employees and little sympathy from the public for having wasted its money. There is some sympathy for the bus drivers, but this may wear thin if the strike continues indefinitely and passengers are left out in the cold. Over the election cycle the opposition FIDESZ party may try to make BKV a poster child for corruption in the current government. Given the extent of BKV's troubles, however, the task of truly reforming the company may prove daunting. KOUNALAKIS