DHL failed. Return of Airborne ILN only option?

[shooter]

The only real, albeit remote, possibility would be for some very large group of private equity investors to buy back the operations and try to reconstitute the old Airborne Express in some fashion, but the financial and market realities of that idea are very forbidding.

August 18, 2008 - [FONT=verdana][SIZE=2][B][SIZE=3][/SIZE][/B][/SIZE][/FONT]
[FONT=verdana][SIZE=2][B][SIZE=3][/SIZE][/B][/SIZE][/FONT]
[FONT=verdana][SIZE=2][B][SIZE=3]Transportation News: As Politicians Turn Up the Heat on Planned DHL Hub Closing, Deutsche Post CEO Says There Were Simply No Other Options[/SIZE][/B][/SIZE][/FONT]


[SIZE=1][FONT=verdana][SIZE=2][B]Losing $5 Million a Day Can’t Go On Forever; State of Ohio Offers Vague Partnership Possibility to Save Wilmington Hub[/B][/SIZE][/FONT]

[B]SCDigest Editorial Staff[/B]

[FONT=verdana][SIZE=2]The drama continues in DHL’s announced change in its North American strategy, which includes outsourcing its airlift operations to UPS and closure of its large sortation hub in Wilmington, OH. That operation employs more than 6000 workers directly and several thousand more that work in other companies that use or support the hub. The outsourcing to UPS would move the air operations of DHL from Ohio to UPS’ massive Louisville, KY hub. [/SIZE][/FONT]

[FONT=verdana][SIZE=2]Supported by politicians on both sides of the aisle and presidential candidate John McCain, the US Congress plans hearings in September on the proposed deal and how it might impact parcel shipping markets here. The stated concern revolves around the potential to reduce competition in the express shipping industry and other anti-trust concerns. However, DHL says it plans to sell and market its services in competition with UPS under the deal, dismissing charges it will reduce market competition. Regardless, it seems clear that the closure of the Wilmington hub and related job losses are the real drivers of political concern.[/SIZE][/FONT]

[FONT=verdana][SIZE=2]“This deal, if allowed to be completed, would have consequences beyond its devastating impact on our local, state and national economy,” said [B]Mike Turner[/B], an Ohio congressman in Dayton whose district includes Wilmington.[/SIZE][/FONT]

[FONT=verdana][SIZE=2]The planned hearings in fact come before DHL and UPS have even worked out a deal on the outsourcing relationship. At one point, DHL had said it hoped to have an agreement with UPS by the end of July, but now entering the third week of August, the deal has still not been completed. Some observers have questioned the strategy of announcing the outsourcing plans before the UPS deal was done, which may give UPS an advantage in the negotiations.[/SIZE][/FONT]

[FONT=verdana][SIZE=2][B]“Can’t Afford to Take $1.3 Billion Losses Forever”[/B][/SIZE][/FONT]

[FONT=verdana][SIZE=2]Meanwhile, [B]Frank Appel[/B], CEO of DHL parent Deutsche Post, finally commented about the DHL controversy, after having been largely silent until now. He defended the move to outsource to UPS (and other announced changes) as necessary to enable DHL to remain in the US market and save tens of thousands of other jobs there.[/SIZE][/FONT]
[FONT=verdana][SIZE=2]He also wonders what the US Congressional actions can really achieve – given that the alternative for DHL is to shut down its North American operations completely. Appel said the company was losing $5 million per day in North America.[/SIZE][/FONT]
[/SIZE]

“I can’t afford to take losses of $1.3 billion [annually] forever,” he stated.

[FONT=verdana][SIZE=2]According to a Wall Street Journal story, Appel said he has resisted calls for him to visit the Wilmington area, as he had nothing new he could tell the workers and community there.[/SIZE][/FONT]

[FONT=verdana][SIZE=2]“Nevertheless, I think it’s important to tell the people that I understand that it’s a hardship for them,” Appel said.[/SIZE][/FONT]

[FONT=verdana][SIZE=2]To further add to the drama, Ohio Lieutenant Governor [B]Lee Fisher[/B] said last week that the state was interested in potentially jumping in to save the Wilmington hub and jobs.[/SIZE][/FONT]

[FONT=verdana][SIZE=2]Fisher said the state of Ohio might be willing to craft “a risk-sharing, collaborative financial partnership” with DHL to eliminate the need for it to outsource to UPS. Details of this idea, however, were very limited.[/SIZE][/FONT]
[FONT=verdana][SIZE=2]Finally, Ohio Senator [B]Sherrod Brown[/B] wrote a letter this week to the Bush administration asking it to consider what has happened with DHL as it negotiates with the Europe Union on the so-called Open Skies agreement that would ease restrictions on a variety of international air transportation operations. Stage II of the Open Skies agreement is currently under discussion.[/SIZE][/FONT]

[FONT=verdana][SIZE=2]In the letter, Brown noted what DHL said when it received approval to acquire US-based Airborne Express in 2003: “DHL said the transaction would: 1) increase profitability and market share for both companies; and 2) enhance free market competition by creating a new entrant into an express delivery market dominated by two major carriers: UPS and FedEx.” Brown wrote, “Unfortunately, that has not been the experience of DHL in the US market.”[/SIZE][/FONT]

[FONT=verdana][SIZE=2]Said SCDigest editor Dan Gilmore: “Unfortunately, no matter what management mistakes got the company into this position, nothing anyone does can change the fact that DHL is losing huge amounts of money in the US market. No law or ruling can force them to continue to do that indefinitely.”[/SIZE][/FONT]

[FONT=verdana][SIZE=2]He added, “The only real, albeit remote, possibility would be for some very large group of private equity investors to buy back the operations and try to reconstitute the old Airborne Express in some fashion, but the financial and market realities of that idea are very forbidding.”[/SIZE][/FONT]

[FONT=verdana][SIZE=2][B]Do you see any plan or action that would change DHL’s announced strategy changes in the [/B][B]US[/B][B]? Do you think something should be done – or should the market just play itself out? How important is it for the [/B][B]US[/B][B] market to have a third strong parcel competitor beyond UPS and FedEx? Let us know your thoughts at the Feedback button below.[/B][/SIZE][/FONT]

[URL]http://www.scdigest.com/assets/On_Target/08-08-18-1.php?cid=1860[/URL]

 

[EMBPILOT1]

Just proves this has absolutely nothing to do with anti-trust issues. This is about a community that is about to lose a lot of jobs. Unfortunately, there is nothing the congress or a team of lawyers can do to stop it.

 

[DC8CRIVER]

Just proves this has absolutely nothing to do with anti-trust issues. This is about a community that is about to lose a lot of jobs. Unfortunately, there is nothing the congress or a team of lawyers can do to stop it.

Actually it just proves that the SCDigest editorial board chose not to write about the anti-trust issues involved with the merger of DHL and UPS.

While politicians are obviously motivated to protect their turf, quite a number of them have put their considerable legal expertise to work identifying some glaring anti-trust aspects of the deal. The politicians motivation notwithstanding, I'd put their legal opinions at a much higher level of accuracy, veracity, and attainability than those of an editorial staff or web board "legal experts".

8

 

[brownie]

Actually it just proves that the SCDigest editorial board chose not to write about the anti-trust issues involved with the merger of DHL and UPS.

While politicians are obviously motivated to protect their turf, quite a number of them have put their considerable legal expertise to work identifying some glaring anti-trust aspects of the deal. The politicians motivation notwithstanding, I'd put their legal opinions at a much higher level of accuracy, veracity, and attainability than those of an editorial staff or web board "legal experts".

8

I can't believe you put our politician and legal experties in one sentence.:laugh: :laugh: :laugh: :laugh: :laugh: :laugh: :laugh: :laugh:

 

[EMBPILOT1]

Actually it just proves that the SCDigest editorial board chose not to write about the anti-trust issues involved with the merger of DHL and UPS.

While politicians are obviously motivated to protect their turf, quite a number of them have put their considerable legal expertise to work identifying some glaring anti-trust aspects of the deal. The politicians motivation notwithstanding, I'd put their legal opinions at a much higher level of accuracy, veracity, and attainability than those of an editorial staff or web board "legal experts".

8

Sorry man, but u r dreaming. I don't blame them for for the anti-trust argument, but go speak to a lawyer who doesn't work for the government and you will find the real answer. Wish you all the best of luck, but this ain't the road that will solve the problem.

 

[shooter]

Sorry man, but u r dreaming. I don't blame them for for the anti-trust argument, but go speak to a lawyer who doesn't work for the government and you will find the real answer. Wish you all the best of luck, but this ain't the road that will solve the problem.

Actually, I don't know any anti-trust lawyer that would not want to take this on. But if you listen to Appel an anti-trust case to stop the deal will drive DHL out of the States. I think that most people think that is just fine. So the editorial question remains, is the re-birth of Airborne Express the best hope for ILN?

Sure DHL staying in ILN would be the best. But DP says that they will leave the market if they cant get with UPS. So, we will push them to see if thats true. And if it is, then what?

Now keep in mind that the outcome is the same for these people if DHL uses UPS or DHL is out of the USA.

 

[Publishers]

The people that want to believe there is some anti trust case here are grasping at straws. If there had been a merger, maybe, but that is not the case here. You could not make it any clearer, the option is to shut down and leave the US.
It is equally clear that the concern is the Wilmigton jobs, not the air force jobs. Is there supposed to be some gratification if they force them out and you manage to kill the other jobs in the US?

 

[shooter]

The people that want to believe there is some anti trust case here are grasping at straws. If there had been a merger, maybe, but that is not the case here. You could not make it any clearer, the option is to shut down and leave the US.
It is equally clear that the concern is the Wilmigton jobs, not the air force jobs. Is there supposed to be some gratification if they force them out and you manage to kill the other jobs in the US?

Sure there is. If DHL is gone...bye bye...hasta la vista...then the air park goes to the State or Wilmington. Then long term lease is signed with ABX for MRO work and some jobs get to stay in ILN. They may be all Mx work, but it's work and ABX does not need to keep looking at Grissom for the space they need.

As far as no anti-trust case, I did not know you were an expert or even a lawyer. So please fill us laymen in Mr.Expert. I am all ears.

 

[100-1/2]

Let them go! The DHL/ABX deal should have never been approved to begin with. It straddled so many federal boundary limits for foreign purchase/acquisition/operation of a US corporate entity> It wasn't funny then, nor is it now. Everyone thought it would be a good idea at the time and all looked well, but you spit on the thousands of workers and families affected at CVG when DHL was permitted to pull-out of there leaving that airport and area holding the check for all the new construction, facilities and leases. No one cried foul then. DHL figured the US would just roll right over again if ILN sunk as well selling off the markets to the number 2 US Express Cargo Shipper. Frank laughed at as he packed his bags for ILN and he will rollinng all over the deck as the ship sets sail for Europe if you think anti-trusts scare him.

100-1/2

 

[Big Beer Belly]

DHL offered to donate air park weeks ago!

...then the air park goes to the State or Wilmington. Then long term lease is signed with ABX for MRO work and some jobs get to stay in ILN. They may be all Mx work, but it's work and ABX does not need to keep looking at Grissom for the space they need.

DHL to Donate Hub to Community (Aircargo Asia Pacific, July 2)
DHL reportedly has offered its Wilmington, Ohio freight hub operation – both land and facilities - to the local community if the company signs its deal with UPS to have UPS handle all of DHL's US air cargo transport. DHL has said it expects to negotiate the UPS deal within three months.
DHL has said it would consider publicly donating the 2,200-acre Wilmington property if the UPS deal goes through, in order to help Ohio.
The property includes two runways, control tower and dozens of buildings, including more than one million square feet of cargo sorting space.
A DHL deal with UPS could cost 6,000 jobs at ABX Air, 1,200 at DHL and 1,000 at ASTAR at Wilmington, where DHL is the largest employer.
http://tinyurl.com/6pu67o