hvydriver
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- Jan 17, 2004
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Rep. Mike Turner interview
>Just food for thought on my little globalization theory, UPS bros. Don't let your guard down, like we did.<
DHL, other firms should work out something better
Guest column: Rep. Mike Turner
Recently, DHL announced a proposed strategic alliance with UPS and the closure of its Wilmington, Ohio hub, causing the elimination of almost 8,000 Ohio jobs. Families from a nine-county area will be impacted with lost wages and needed health insurance. The Wilmington community will be the hardest hit, losing tax revenue necessary for schools and other important social services. All of this, despite DHL's promise that its acquisition of Wilmington's private airport facility would result in a state-of-the-art international package distribution center anchoring DHL's North American operations.
Unexpectedly, DHL appears to be abandoning its North American air operations and is ready to become merely a customer of UPS. After investing billions of dollars in acquiring, building, and operating a U.S. distribution system, DHL's surprising retreat raises serious questions about whether the real story is being told.
Rewind to just five years ago and you will find DHL operating at the Cincinnati-Northern Kentucky airport, Emery Worldwide operating at the Dayton airport, and Airborne Express operating in Wilmington. These three facilities were located in Southwest Ohio to take advantage of our central location and great workforce. Reportedly, Emery and Airborne operated profitably with DHL operating with minimal losses.
With DHL's acquisition of Airborne and UPS's acquisition of Emery, the facilities at the Cincinnati and Dayton airports sit idle. If the UPS-DHL transaction moves forward, all of these consolidations will result in a combined job loss of more than 10,000 for Southwest Ohio.
Five years ago, if UPS and DHL had announced the formation of a strategic alliance that would include the acquisition of Emery and Airborne and the consolidation of all four companies' U.S. operations, antitrust alarms would be blaring. Certainly, this new transaction needs to be viewed in light of the possibility that the acquisitions of Emery and Airborne were steps one and two of a stepped transaction. Perhaps, the UPS-DHL combination is step three.
But the review of this transaction should not stop there. Senior DHL officials acknowledged that the UPS-DHL strategic alliance in the U.S. market may include UPS-DHL's Asian and European operations in the future.
Currently, Wilmington's air hub is operated by DHL and its partner airlines ASTAR and ABX. DHL has reported increasing losses from its North American operations, which are projected to exceed $1 billion this year. ASTAR and ABX have indicated that savings can be found to lower DHL's costs. But it appears DHL is not interested in listening to either company's cost-cutting plans. If these jobs in Wilmington are to be saved, clearly ASTAR and ABX need to step forward with a viable plan that can counter UPS's offer, and DHL needs to listen.
Because of the thousands of jobs at risk for Ohio, and the serious questions of the market impact of a UPS/DHL combination, the entire Ohio congressional delegation, including both senators, sent a letter to the Justice Department requesting an antitrust investigation into this deal. Ohio Gov. Ted Strickland is similarly pursuing an antitrust review of the UPS/DHL combination.
But all of this should be unnecessary. If DHL lived up to its promises to Ohio and to the town of Wilmington, we could all be focusing on how to make DHL more successful. Wilmington's past support for DHL should count for something. The surrounding community accepted DHL's vision of a global company operating in their backyards and understands that DHL must curtail its losses. However, usually when a company is losing money they fire someone, not a whole town.
Rep. Mike Turner, R-Dayton, represents Ohio's 3rd District in the U.S. House.
>Just food for thought on my little globalization theory, UPS bros. Don't let your guard down, like we did.<
DHL, other firms should work out something better
Guest column: Rep. Mike Turner
Recently, DHL announced a proposed strategic alliance with UPS and the closure of its Wilmington, Ohio hub, causing the elimination of almost 8,000 Ohio jobs. Families from a nine-county area will be impacted with lost wages and needed health insurance. The Wilmington community will be the hardest hit, losing tax revenue necessary for schools and other important social services. All of this, despite DHL's promise that its acquisition of Wilmington's private airport facility would result in a state-of-the-art international package distribution center anchoring DHL's North American operations.
Unexpectedly, DHL appears to be abandoning its North American air operations and is ready to become merely a customer of UPS. After investing billions of dollars in acquiring, building, and operating a U.S. distribution system, DHL's surprising retreat raises serious questions about whether the real story is being told.
Rewind to just five years ago and you will find DHL operating at the Cincinnati-Northern Kentucky airport, Emery Worldwide operating at the Dayton airport, and Airborne Express operating in Wilmington. These three facilities were located in Southwest Ohio to take advantage of our central location and great workforce. Reportedly, Emery and Airborne operated profitably with DHL operating with minimal losses.
With DHL's acquisition of Airborne and UPS's acquisition of Emery, the facilities at the Cincinnati and Dayton airports sit idle. If the UPS-DHL transaction moves forward, all of these consolidations will result in a combined job loss of more than 10,000 for Southwest Ohio.
Five years ago, if UPS and DHL had announced the formation of a strategic alliance that would include the acquisition of Emery and Airborne and the consolidation of all four companies' U.S. operations, antitrust alarms would be blaring. Certainly, this new transaction needs to be viewed in light of the possibility that the acquisitions of Emery and Airborne were steps one and two of a stepped transaction. Perhaps, the UPS-DHL combination is step three.
But the review of this transaction should not stop there. Senior DHL officials acknowledged that the UPS-DHL strategic alliance in the U.S. market may include UPS-DHL's Asian and European operations in the future.
Currently, Wilmington's air hub is operated by DHL and its partner airlines ASTAR and ABX. DHL has reported increasing losses from its North American operations, which are projected to exceed $1 billion this year. ASTAR and ABX have indicated that savings can be found to lower DHL's costs. But it appears DHL is not interested in listening to either company's cost-cutting plans. If these jobs in Wilmington are to be saved, clearly ASTAR and ABX need to step forward with a viable plan that can counter UPS's offer, and DHL needs to listen.
Because of the thousands of jobs at risk for Ohio, and the serious questions of the market impact of a UPS/DHL combination, the entire Ohio congressional delegation, including both senators, sent a letter to the Justice Department requesting an antitrust investigation into this deal. Ohio Gov. Ted Strickland is similarly pursuing an antitrust review of the UPS/DHL combination.
But all of this should be unnecessary. If DHL lived up to its promises to Ohio and to the town of Wilmington, we could all be focusing on how to make DHL more successful. Wilmington's past support for DHL should count for something. The surrounding community accepted DHL's vision of a global company operating in their backyards and understands that DHL must curtail its losses. However, usually when a company is losing money they fire someone, not a whole town.
Rep. Mike Turner, R-Dayton, represents Ohio's 3rd District in the U.S. House.
