THE SELL OUT OF THE UK

« Underground train in Victoria Station in London. (Volker Hartmann/AFP/Getty Images)

British Royal Train to Become German-Owned

Tuesday, July 3, 2007

Last Thursday, the German state-owned freight operator Deutsche Bahn AG announced the purchase of English Welsh & Scottish Railway Holding Ltd. (ews). The German group announced that it would pay close to $670 million for ews, according to the Independent. The takeover of the UK-based operation will take place later this summer, upon regulatory approval. ews, the successor of the historic British Rail, whose roots go back to the mid-1800s, has played a crucial role in British history, including making significant contributions during World Wars i and ii. Although some decry the deal as selling off history, others say it is worse than that: It has nationally strategic implications that are not receiving attention. Much of the media attention surrounding the takeover by the German company has focused on the fact that the owner of the line is responsible for providing the two Royal Class 67 locomotives, known as the Queen’s Messenger and the Royal Sovereign, as well as their drivers. However, the loss of British control over ews assets represents an even larger worry. The infrastructure and assets of ews are unrivaled in the UK. The company has been extremely profitable since its creation in 1996. Since that time, the fleet, which is comprised of 5,000 employees, 500 locomotives and 14,000 cars, has had approximately $1 billion invested in it. The company’s 1,000 train movements per day, a 60 percent expansion since British Rail’s freight division was privatized, has enabled ews to capitalize on rising gasoline prices and customers’ subsequent desires to reduce fuel costs, thereby helping generate the company’s current $1 billion annual income. Perhaps its most defining and strategic characteristic, however, is not the company’s profitability or its history, but the fact that it handles an astounding 70 percent of all rail freight hauled in Britain. ews is the largest rail operator in Britain and the only rail freight operator that provides service on a nationwide level, with access to continental Europe through the Channel Tunnel. ews also owns and operates railway freight lines through a subsidiary in France. The sale of ews to the German state-owned corporation is just the latest in a long string of foreign takeovers. Last year set a new record for foreign takeovers of British companies. According to the Office for National Statistics, foreigners spent approximately $155.2 billion purchasing UK firms, more than twice as much as their British counterparts spent on overseas acquisitions. A similar buyout proportion occurred in 2005 as well. The United Kingdom is an oddity in protectionist Europe. While countries like Germany, France and Spain erect barriers protecting their companies from foreign ownership, UK policies virtually welcome foreign takeovers. The sellout trend represents a financial and mental weakness in Britain that will leave it strategically and militarily open to attack. To see how widespread the corporate sellout has become, and to find out what it means for the future, read “Selling Britain’s Corporate Crown Jewels” and “Germany’s Corporate Blitzkrieg.” ************************************************************************************* McDermott to Cheney: ‘Resign or face impeachment’ By Chris Good June 29, 2007 Rep. Jim McDermott (D-Wash.) told Vice President Dick Cheney to “resign or face impeachment” Thursday night as three more House Democrats lent their support to a plan to impeach the vice president. “The vice president holds himself above the law, and it is time for the Congress to enforce the law,” McDermott said in a floor speech. “For the good of the nation, the vice president could leave office immediately.” McDermott was one of three House Democrats to come out in favor of impeachment Thursday, along with Reps. Keith Ellison (Minn.) and Hank Johnson (Ga.). Including the three lawmakers, seven members in June have shown new support for impeaching Cheney. McDermott cited Cheney’s refusal to cooperate with the Information Security Oversight Office (ISOO), which, pursuant to an order signed by President Clinton, oversees the handling of classified documents by executive agencies. McDermott denounced a 2004 claim that Cheney’s office is not part of the executive branch. “When a sitting vice president claims that he is not part of the executive branch of government to which he was elected, it is time to remove him from office,” McDermott said. Johnson also cited the refusal to submit to ISOO oversight in his decision to support impeachment. McDermott, who was lambasted by conservatives for opposing the Iraq war, said he anticipates a barrage of attacks in response to his support for impeachment. “The intent of this administration, and this vice president, has been to silence all dissent,” McDermott said. “Fear is what kept this administration in office in 2004, and fear is the only public discourse this administration understands — and practices.” The articles of impeachment, introduced by Rep. Dennis Kucinich (D-Ohio) in April, have garnered support from 10 House cosponsors. Unlike the other impeachment backers, McDermott voted against an amendment proposed by House Democratic Caucus Chairman Rahm Emanuel (Ill.) to deny funding to the Office of the Vice President Thursday night. Emanuel proposed the amendment earlier this month as Cheney’s document secrecy gained more attention. The amendment failed 217-209, receiving votes from two Republicans: Reps. Ron Paul (Texas) and Walter Jones (N.C.).