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The Willi Betz story

26th October 2006
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Page 30, 26th October 2006 — The Willi Betz story
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Which of the following most accurately describes the problem?

As the boss of the German haulage giant Willi Betz appears in court accused of bribery and other offences, we look at where the firm has come from. Dylan Gray reports.

Willi Betz as we know it today is the product of a decommissioned army truck, an eager 17-year-old and innovative thinking.

Amid the ruins of 1945 post-war Germany, a young man from Undingen, near the Black Forest in the south-west of the country transported much-needed food, building materials and coal. As the young Willi Betz gained more business. he did the logical thing and procured more trucks, steadily cementing himself in the road haulage business. In one particularly shrewd move. Betz became the first haulier to transport wine from Italy and France into Germany — understandably popular if you have ever tasted German wine.

Over time, subsidiaries popped up in Austria, Italy, France, Great Britain and the Netherlands. The most significant boost to its long-term growth came with the co-operation between Betz and the Bulgarian state-run haulage firm SOMAT,a deal struck in 1968 at the height of the Cold War. This move paved the way to business in the former USSR and elsewhere in the Eastern Bloc when the Berlin Wall fell in 1989.

Major player Willi Betz is now based in Reutlingen, close to Undingen, and is one of the leading hauliers across Western and Eastern Europe with a presence in 25 countries. Its business operations consist of haulage,contract logistics and vehicle sales, with the main emphasis on haulage.This year the company is on track for a turnover of €720m (i490m) —a five-fold increase on its 1990 figure.

The haulage side of the business employs 5,600 people at 56 different locations. It has built up a fleet of 2.500 trucks, the majority being Mercedes-Benz, and 4,000 trailers.

Its contract logistics business employs 1,600 people at 25 locations, and boasts a total of 400,000m2 of storage space. Unknown to many Western Europeans, a whopping 20% of Betz's business consists of vehicle sales in Bulgaria and Macedonia. Its dealers stock a range of brands including Mercedes-Benz, Chrysler. Jeep, Smart and Mitsubishi.

SOMAT, its Bulgarian sister company, remains one of Betz's largest subsidiaries. It was privatised in 1994 and currently has 1,800 employees. It is this part of Betz's business that has caused it to come in for close attention from the authorities on several occasions, the latest resulting in the current trial.

For many years now, Betz has been under scrutiny for using EU drivers in the EU country where the vehicle is registered and then replacing them with cheaper Eastern European drivers when the vehicle is eisewhere.Although by no means alone in this, rival hauliers have been calling for a change in legislation to stop With Betz and others from taking advantage of the legal loophole that allows the use of cheap non-ELI labour.

Bribery accusations

Things were going well for Betz until 26 March 2003, when police officers raided the firm's Reutlingen offices on suspicion of bribery by the haulage firm's executives. Branches across Europe were also targeted; boxes of documents were confiscated and taken away for examination.The raids were triggered by incriminating information found on various hauliers in a previous raid on German carrier Fixemer.

Following the raid, Betz made a statement saying that it does not employ or use drivers from non-EU countries, but commissions thirdcountry enterprises as carriers. After almost three years of ploughing through the information obtained during the raids, current boss Thomas Betz has finally appeared in court.

Some 560 charges have been issued, including accusations of bribery, fraud and illegal vehicle registrations.The accused include Betz CEOThomas Betz, his father With and three of their colleagues, along with Rolf Kreienhop, vice-president of BAG — the German equivalent of Vosa. Thomas Betz has been on remand for the past year. whilst Kreienhop has been suspended from the BAG. Prosecutors are accusing Betz of paying €4.5tn (3m) in bribes for ECMT licences (cross-border permits issued by the European Conference of Ministers of Transport) in Georgia and Azerbaijan between 1998 and 2003, resulting in gross profits of €183m (Et 24m). At the same time 900 Bulgarian truck drivers supposedly worked for Willi Betz illegally in Western Europe, under false employment by its sister company SOMAT, thereby saving €19.6m (113.3m) in social security payments.

Illegitimate registration of vehicles abroad is also on the list, supposedly avoiding around €7.5m in) in taxes. Kreien hop is accused of waning the haulier of upcoming controls in return fora car and travel expenses.

Betz senior will be tried at a later date due to ill health, as a result of a. gunshot wound he received 10 years ago.

Trial latest

Thomas Betz has denied the corruption allegalions, claiming that be did not employ any drivers illegally. He has also stated that all the correct tax and social security payments have been made.

WILLI BETZ IN THE UK

Mick Rennison from the Transport & General Workers Union has had a lot of experience with Will Betz over the years, in particular with its drivers.

Before the raid on the German haulage giant in 2003, when the foreign driver issue was a hot topic for the UK haulage industry, Rennison and his team handed out leaflets printed in Bulgarian, Russian and Turkish to Betz's international drivers explaining their employment rights. The campaign was started after the revelation that the drivers were being paid a mere £300 per month, although the T&G argued that they were entitled to the minimum wage.

Rennison recalls: The drivers were always very nice people, but felt they weren't welcome in the UK. They read our leaflets, though unfortunately nothing came of it —which we put down to a probable fear of Betz giving them the sack."

As the most visible of the foreign hauliers entering the country. Willi Betz has often been singled out for criticism and dislike. One thing that particularly infuriated UK hauliers and drivers was the sight of Betz's vehicles parked up for weeks on end at motorway services while they were waiting for their load home or another internal UK load, taking work away from domestic operators.

During that time Ben n ison says that some unpleasant incidents happened, including the slashing of Betz curtain-sided trailers.

Rennison says he does not condone these incidents as the drivers are merely doing their job —the blame, if any needs to be applied, lies with the bosses in Reutlingen.

Willi Betz does have a UK subsidiary servicing the Toyota car plant in near Derby with its drivers receiving reasonable rates of pay.


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