Local politicians yesterday held a crisis meeting with DHL executives to try to save its US air hubat Wilmington, Ohio, where over 8,000 jobs are threatened by the decision to switch DHL’s North
American uplift from ABX Air and Astar Air Cargo to UPS.Under the US restructuring plan announced last week, DHL Express will phase out use of ABXAir and Astar at Wilmington over the coming year. Instead, its North America air volumes areexpected to be carried by UPS through the latter’s main US air hub at Louisville, Kentucky. The10-year, $10 billion contract is due to be finalised within the next three months.
As a result, more than 6,000 jobs at sub-contractor ABX Air, which provides cargo flights andground handling at Wilmington, and about 1,000 jobs at Astar Air Cargo, which carries about 50% ofDHL’s air volumes to and from Wilmington, are in danger, according to Ohio officials. Inadditional, up to 1,200 local DHL jobs are at risk, they said.
DHL Express aims to cut its US losses from an expected $1.3 billion this year to about $300million in 2011 by switching airlift to UPS, shedding up to 1,800 of its 18,000 US workforce,cutting one third of its stations and using the US Postal Service for rural deliveries.
In response to the cuts, the state of Ohio this week set up a task force of local officials,business leaders, ABX Air and Astar Air Cargo executives to try to save jobs and find “economicallyfeasible solutions for the future”, including retaining some DHL activities at Wilmington.
“DHL’s May 28th announcement of its intention to pursue negotiation with UPS to handle its USairlift operation has sent a shockwave through the region and across the state,” said WilmingtonMayor Ed Raizk. “We are committed to developing a solution that is workable to DHL so that itsdecision can be revisited and reshaped to include the DHL hub in Wilmington.”
On Wednesday, Ohio governor Ted Strickland, Lieutenant Governor Lee Fisher and otherofficials held an “honest, candid and very direct” meeting with DHL Express CEO John Mullen,outgoing US chief Hans Hickler and other DHL managers to press for DHL to scale back the Wilmingtoncuts.
Afterwards, Fisher told local media that DHL was committed to the UPS deal but executives hadleft open the possibility of keeping about 1,000 jobs at Wilmington for ground operations. However,Ohio officials had warned DHL they would explore all possible legal options, including anti-trustoptions to see if the planned deal with UPS was anti-competitive, he added.
Nevertheless, DHL Express CEO John Mullen already said at the May 28 Bonn press conference onthe future US strategy that DHL did not expect any problems gaining anti-trust approval, while UPSnoted in a statement that the DHL contract would be similar to its existing deal with the US PostalService.
Meanwhile, the UPS pilots union IPA, with over 3,000 members at UPS, has expressed itssupport for pilots at ABX and Astar, and called on UPS to consider taking on pilots from the othertwo airlines.
