New Efforts To Protect Jobs In Wilmington

[nitefr8dog]

I hope I'm wrong too, abxdx. I've got buds over there. My calculator is pretty insistant, though. I hope it's off.

I would be suprised if Hete did not cut a deal with the state of Ohio to save jobs.

 

[Whistlin' Dan]

Wrong. Stock is at 1.30. Earnings from DHL over 65% of revenues. Not enough cash flow if that biz is lost to continue operations on the ABX Air side. (I'm not lumping the other companies under the ATSG umbrella into this.) Unless of course, Hete pulls a rabbit out of his hat.

Or some business out of his ATSG group...enough to keep ABX alive while he solicits new customers for his 767's. There's enough business out there to keep them busy. In fact, it wouldn't surprise me to see some of them going down to Louisville on contract even before they close Wilmington. UPS will need them to handle the increased loads as a result of this DHL mess.

The key to this whole thing will be their 767's. There's a reason Joe Hete cornered the market on them, and it's because they are to today's on-demand charter market what 727's were to it 20 years ago...reliable, supportable, and fuel-efficient. Unfortunately, 727's have dropped into the market niche that DC-6's held 20 years ago...ubiquitous, cheap to buy, expensive to operate, and increasingly unreliable.

The DC-8's have some future. My guess is that most of Astar's will be in Africa long before they turn the lights out in Wilmington.

Yes, there will be furloughs at ABX, but everbody knew those were coming anyway. And yes, they (ABX/Hete) will ask for concessions in the CBA, and they'll probably get them. But I see ABX surviving the imminent "sinking" of DHL, which is what Hete had in mind all along.

 

[abxaviator]

Wrong. Stock is at 1.30. Earnings from DHL over 65% of revenues. Not enough cash flow if that biz is lost to continue operations on the ABX Air side. (I'm not lumping the other companies under the ATSG umbrella into this.) Unless of course, Hete pulls a rabbit out of his hat. Again, no ill will, but facts are facts. Both sides are hosed.

Your cash flow numbers are historical, meaning with the 767's flying the very low margin DHL contract. As DHL releases those aircraft they can be deployed to the charter side, thus producing significantly improved cash flow.

I'm not saying it will be all rosy, likely only 20-30 ACMI 767's, perhaps less, 35 at best and a significantly restructured contract.

 

[shooter]

Your cash flow numbers are historical, meaning with the 767's flying the very low margin DHL contract. As DHL releases those aircraft they can be deployed to the charter side, thus producing significantly improved cash flow.

I'm not saying it will be all rosy, likely only 20-30 ACMI 767's, perhaps less, 35 at best and a significantly restructured contract.

I agree, but that 30 odd 767's doing ACMI work will come close to the 1.75% DHL contract. All is not bad with the ATSG numbers, it's the jobs that are hurting the most. Get the 767's running charters and you will see the numbers grow into a stronger company than we see today. Good luck to those that are able to stay and don't forget us little guys that will be on the street.

 

[penguin22]

Or some business out of his ATSG group...enough to keep ABX alive while he solicits new customers for his 767's. There's enough business out there to keep them busy. In fact, it wouldn't surprise me to see some of them going down to Louisville on contract even before they close Wilmington. UPS will need them to handle the increased loads as a result of this DHL mess.

The key to this whole thing will be their 767's. There's a reason Joe Hete cornered the market on them, and it's because they are to today's on-demand charter market what 727's were to it 20 years ago...reliable, supportable, and fuel-efficient. Unfortunately, 727's have dropped into the market niche that DC-6's held 20 years ago...ubiquitous, cheap to buy, expensive to operate, and increasingly unreliable.

The DC-8's have some future. My guess is that most of Astar's will be in Africa long before they turn the lights out in Wilmington.

Yes, there will be furloughs at ABX, but everbody knew those were coming anyway. And yes, they (ABX/Hete) will ask for concessions in the CBA, and they'll probably get them. But I see ABX surviving the imminent "sinking" of DHL, which is what Hete had in mind all along.

I gotta hand to you, Dan. You called this DHL/UPS thing correctly a long time ago

 

[FastHap]

Some sort of merger is the only hope for either side, presuming DHL would want that. We'll just have to hang on and see. Not much other option out there.

Hvy, do you think a merger at this point would appease DHL (DPWN) and save us? Or do you think there is a future absent DHL if the 2 airlines merge?

 

[Jetglow]

Hvy, do you think a merger at this point would appease DHL (DPWN) and save us? Or do you think there is a future absent DHL if the 2 airlines merge?

No matter how you cut it....DHL is loser and therfore anyone associated with DHL will lose. It is time to put out resumes and work somewhere else regardless of what happens.....unless you want to waste several more valuable years and be in the same spot you are in today.

 

[hvydriver]

Hvy, do you think a merger at this point would appease DHL (DPWN) and save us? Or do you think there is a future absent DHL if the 2 airlines merge?

I'm not saying it's a sure thing by any means. But it would seem to be the only chance for survival here.

 

[Whistlin' Dan]

Web produced by: Ian Preuth

There's new information on several new efforts to protect thousands of jobs at stake in Wilmington.

DHL wants UPS to take over transporting packages, a move that would eliminate 6,000 jobs at ABX Air.

The American Postal Workers Union held a forum Sunday and is fighting the proposed plan.

[Ohio] Lieutenant Governor Lee Fisher also met with labor leaders on Sunday to discuss several options.

Fisher said the state will do everything it can to try and protect the jobs.

http://www.wcpo.com/news/local/story.aspx?content_id=1f9dfec1-353d-4e79-bc36-743ff7e49eb9&rss=703

Didn't the state of Ohio SUE DHL a couple years ago over some non-performance issues relating to a state contract?

In other words, "WE don't use DHL, but we think everybody else should"

Who knows? If they can get "DHL" to stay in Wilmington, maybe they can get "Pope Motor Car Company" to come back to Toledo, too.

 

[mxer]

Dan,
I don't recall the lawsuit that you referring to. Maybe they did. I don't know. The thing with the state vs. DHL now is more about tax breaks that have been given to help DHL in exchange for a job base in Wilmington. Also, they just opened the highway (is that 68?) on the north side of the field to help as far as trucking into and out of the hub. The state would get this tax money back over time from the income tax produced through employment. They deal is that employment was supposed to be provided for a bit more than four years. Rather the state is a customer or not really doesn't matter. DHL has shown their loyalty and, in my opinion, intelligence level in the way they are doing business. Twice now, they have done massive layoffs through video while asking for the support of those being released. There was any number of ways to fix the issues in the states and they dug down to pick the worst possible. Good Luck to everyone that will be hit by this.

 

[TWA]

I don't think that they sued them, but they did try to get out of the contract. The service was absolutely dismal, but still within the limits of the contract, so they really had no way to get out. I'm not sure if they ever managed to get out or not. One thing is for sure, DHLs service didn't improve.

 

[HeavyjetDC8]

I'm not saying it's a sure thing by any means. But it would seem to be the only chance for survival here.

The chance for our mutual survival (as in ABX/Astar merger) would seem to have exceeded its sell by date with the rejection of the DHL (via Astar) buyout proposal of ABX last summer. We can of course thank the irrefutable Mr. Hete for the proposal's rejection. He so very much wants to remain a little player in the Airline game.

Should the DHL/UPS team-up actually occur then the only viable airframe left operating out of ILN will be the 767. Merger with a bunch of obsolete 727s is not required: cold logic shows that in actuality a merger from the ABX perspective is to be as actively avoided as a dose of knob-rot. ABX has 650 pilots and 41 767s. Do the math.

ABX/Astar without UPS:Yes. ABX/Astar with UPS: No.

There is however always a wild card in play. With ABX stock rightfully sinking to the bottom of the tank the shark repellent attributes of the poison pill may perhaps be put to the test.

Interesting times although I personally liked it when everything was very boring and gray without so much as a dash of yellow in sight.

 

[mxer]

Refresh my memory. Maybe I'm wrong, but that was not exactly a buyout proposal last year. It was only an expression of interest which is basically an invitation to discuss a proposal. The denial actually said that the board thought the stock was worth more especially since it was by then trading in the $8+ range. That should have also been an invite for more talks. Instead the Daz said nevermind to the whole deal. Usually negotiations involve going back and forth at least a few times. There was probably a lot more but thats what I recall.

 

[AV80R]

I gotta hand to you, Dan. You called this DHL/UPS thing correctly a long time ago

Really? When did he/she predict that? Most of us at brown thought that IF the deal actually happened it would go to Fedex...

 

[hvydriver]

Refresh my memory. Maybe I'm wrong, but that was not exactly a buyout proposal last year. It was only an expression of interest which is basically an invitation to discuss a proposal. The denial actually said that the board thought the stock was worth more especially since it was by then trading in the $8+ range. That should have also been an invite for more talks. Instead the Daz said nevermind to the whole deal. Usually negotiations involve going back and forth at least a few times. There was probably a lot more but thats what I recall.

Actually mxer, the stock was a little below 7.75 a share at the time of the "indication of interest". Astar offered a 15% premium on the stock which then climbed over 8 on speculation. Hete and the board turned down that psuedo offer flat. So what else could Dasburg say? If the board won't talk, not much point. One of the disadvantages of some poison pills is that it takes the power away from the shareholders. Just my .02.