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American ShipperIntermodal

Ohio in race to save DHL jobs

Ohio in race to save DHL jobs

Ohio politicians, businesses and unions are gearing up to fight DHL Express over its decision to close its Wilmington air freight hub and hire UPS to fly its packages instead of incumbent carriers ABX Air and Astar Air Cargo.

   German postal and logistics group Deutsche Post last week announced that DHL would pare underutilized assets in its ground network and switch to UPS for domestic airlift in North America to stem heavy losses. DHL and UPS hope to finalize an agreement within the next three months.

   Gov. Ted Strickland and legislative leaders met with DHL Express Chief Executive Officer John Mullen and Wolfgang Pordzik, head of government relations, on June 4 at the statehouse to express their dismay and warn that they will explore all legal options, including investigating any potential antitrust issues, if the two companies agree on an air transport contract, Ohio Department of Development spokeswoman Kelly Schlissberg confirmed.

   Members of the Ohio congressional delegation have also sent a letter to U.S. Attorney General Michael Mukasey asking the Justice Department to closely scrutinize any deal with UPS for reducing competition in the air express market, according to the Dayton Daily News.

   DHL’s position is that antitrust issues don’t apply to a contract between a customer and vendor.

   Meanwhile, state and local leaders have formed a task force to find ways to help DHL reduce costs in Wilmington and reverse its decision. Officials admitted they faced an uphill battle to get DHL to change its mind about the hub. Local business leaders, including executives from Wilmington-based ABX Air, are represented on the task force, which is scheduled to hold its first meeting on Tuesday. The group will also look at alternatives to retain jobs by turning the air park into a regional, intermodal freight and passenger transportation center.

   State and local officials say that more than 8,200 direct jobs are at stake, 6,000 at ABX alone, if DHL transfers overnight air operations to UPS in Louisville, Ky. Another 2,000 indirect job losses are also expected at distribution firms and manufacturers that rely on or serve DHL.

   Deutsche Post’s announcement on May 28 that its DHL subsidiary would switch domestic air operations to UPS was a real stomach punch for Wilmington city officials, who felt any restructuring would be limited to grounding some older planes. According to the Wilmington News Journal, Mayor David Raizk was at Deutsche Post headquarters in Bonn after helping inaugurate DHL’s newest hub in Leipzig, Germany, when he heard the news. Invitations to the event listed Wilmington as one of the spokes in DHL’s air network.

   Sen. George Voinovich, R-Ohio, plans to contact U.S. Ambassador to Germany W.R. “Tim” Timken to see if any pressure can be applied there, the Dayton Daily News reported.

   State officials also are upset that they provided $7.2 million in tax abatements to DHL, ABX and Astar to promote expansion of the hub only to see it shut.

   According to the paper, the Dayton-Montgomery County Port Authority in March 2007 sold $270 million in bonds to support DHL’s expansion and upgrading of the Wilmington hub in recent years. That requires DHL to repay the bonds over 40 years, which would put pressure on the company to find a new use for the 1 million-square-foot Wilmington sorting facility and airport if jobs are lost there and it generates less revenue, Ron Parker, the port authority’s executive director, was quoted as saying. ' Eric Kulisch