Yesterday, Ohio Lieutenant Gov. Lee Fisher said in an interview that the state wants to enter into "a risk-sharing, collaborative financial partnership" with the company, in place of the UPS deal.
Now that's insane! The state of Ohio now wants to enter into the express integrator business. That's what people in the rest of the world call socialism.
DHL Parent's Chief Defends UPS Deal - WSJ.com
DHL Parent's Chief Defends UPS Deal
By
COREY DADE and
ALEX ROTH
August 14, 2008; Page B4
Hoping to quell the furor building for congressional hearings into DHL's outsourcing deal with
United Parcel Service Inc., the chief executive officer of DHL parent
Deutsche Post AG of Germany defended the move as critical to saving the U.S. business and its 43,000 jobs.
Frank Appel, CEO of the Bonn-based delivery giant, in his first interview since the agreement became a political target of presidential candidates John McCain and Barack Obama, said the only alternative is "more serious cuts to the whole operation" to stanch losses of $5 million a day. "I can't afford to take losses of $1.3 billion forever," he said.
Mr. Appel expressed sympathy for the more than 8,000 workers expected to lose their jobs in the closure of DHL's Wilmington, Ohio air hub and said he plans to dispatch local advisers to help them find other jobs.
Concerns raised by Republican Sen. McCain and Democratic Sen. Obama are understandable given the hub's importance to the local economy, Mr. Appel said. However, he said there are no grounds for the candidates' demands for an antitrust investigation. "
I can't imagine what would be the legal position" to block it, he said. UPS has sought to clarify the deal as a vendor contract rather than a merger, which would trigger a federal anticompetition review. If consummated, the contract would make DHL the largest customer of UPS and generate $1 billion in annual revenue for the Atlanta shipping titan.
A spokeswoman for the House Transportation and Infrastructure Committee said Wednesday that a hearing likely will be scheduled for September.
The Ohio congressional delegation first requested a hearing, and the committee chairman, Democratic Rep. James Oberstar of Minnesota, has expressed unease about the job losses and potential effects on customer service and industry competition.
Sen. McCain, along with Rep. Mike Turner, also a Republican, who represents the Wilmington area, on Tuesday sent a letter to Mr. Appel urging him to visit the city and "hear first hand the many important issues of concern to the affected community."
Mr. Appel in the interview said that wasn't necessary.
"I should go there if I can tell people something, but we have said what we can say at the moment," Mr. Appel said.
Yesterday, Ohio Lieutenant Gov. Lee Fisher said in an interview that the state wants to enter into "a risk-sharing, collaborative financial partnership" with the company, in place of the UPS deal. Mr. Fisher declined to disclose details of the proposal.
Deutsche Post AG spokesman Silje Skogstad said, "We are not aware of such a proposal."
Last week Sen. McCain met with DHL workers in Wilmington and pledged to try to stop DHL from slashing jobs. Sen. Obama voiced similar concerns in asking the White House to step in.
DHL announced the UPS deal in May as part of a downsizing of its expansion in the U.S., which has failed over the past five years to gain market share against UPS and
FedEx Corp. DHL bought express-delivery company
Airborne Inc. in 2003 for $1.05 billion. At the time, members of Congress questioned a foreign company buying the cargo airline, in light of the Sept. 11 terror attacks and a U.S. law preventing foreign investors from holding a majority stake in a U.S. carrier.
DHL's Wolfgang Pordzik, executive vice president of corporate public policy, in an interview disputed recent news reports about the work of former Washington lobbyist Rick Davis on the acquisition. Mr. Pordzik said Mr. Davis, who is currently Sen. McCain's campaign manager, represented Airborne before the acquisition and wasn't hired by DHL until after the purchase was completed. Mr. Pordzik said Mr. Davis's role for DHL was to "basically create good will" for DHL on Capitol Hill "without a specific legislative target...or regulatory target."
Lobbyist disclosures filed with the Senate and a McCain campaign spokesman say Mr. Davis's firm, Davis Manafort Inc., worked on behalf of Airborne to push through its sale to DHL. The campaign and the documents also say DHL hired Manafort after the acquisition. Mr. Davis declined to comment.
An Obama campaign ad airing in the Wilmington area says Mr. Davis and Sen. McCain helped "foreign-owned DHL buy a U.S. company and gain control over the jobs that are now on the chopping block in Ohio." The McCain spokesman, Brian Rogers, said the Obama ad is "absolutely wrong" as far as Sen. McCain's role in the 2003 acquisition. Mr. Rogers says the senator never took a position on the deal, but opposed an amendment to a military spending bill aimed at prohibiting foreign airlines from carrying U.S. military troops and equipment. DHL at the time had such a contract.
Obama campaign spokesman Nick Shapiro said the ad's claims are "factually accurate."
Write to Corey Dade at
[email protected]1 and Alex Roth at
[email protected]2
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