Friday, July 25, 2008

Strickland asks DOT to investigate DHL deal

State officials issued a letter Thursday, July 24, to the U.S. Department of Transportation calling for it to investigate a plan by DHL Express' parent to outsource its domestic air cargo business to United Parcel Service, a move that would eliminate thousands of Ohio jobs.

Signed by Gov. Ted Strickland and Lt. Gov. Lee Fisher, the letter to Transportation Secretary Mary Peters said pairing the two carriers would hurt both consumers and the U.S. shipping market.

"It appears likely this proposed deal between DHL and UPS is a step toward the elimination of a competitor from the express delivery market," the letter states. "Consolidation leaves consumers only two options for express delivery service — and that is contrary to the public interest."

In addition to seeking an investigation, the letter urges Transportation Secretary Mary Peters to "issue appropriate orders to stop activity that will erode competition."

Deutsche Post, owner of DHL, wants to move at least DHL's air-freight operations to UPS' hub in Louisville, Ky. If DHL moved these operations, as well as ground transport and overseas packaging operations to Kentucky, it could cost the region 8,200 jobs.

The tentative agreement between the carriers calls for DHL to hire UPS under a 10-year contract. DHL says that such a pact could stem domestic operational losses that it expects will exceed $1 billion this year.

In addition to Strickland's latest request, the state congressional delegation and state leaders have asked the U.S. Department of Justice to investigate whether the DHL proposal violates U.S. antritrust laws by reducing competition in the express package delivery market.

Also on July 24, Sens. George Voinovich and Sherrod Brown met with the man assigned by the Bush administration to be the point person on DHL's proposed consolidation with UPS.

The senators met with Sandy K. Baruah, assistant Secretary of Commerce for Economic Development, after asking White House Chief of Staff Josh Bolten to put someone in charge of the issue.

Brown, D-Ohio, said Baruah said the goal will be to coordinate actions to fight back to preserve the jobs at risk and "if that doesn't work, to make sure (the administration) has a full-time person on the ground to help the region move forward in case jobs are lost in that facility."

Baruah is familiar with the region - Rep. Mike Turner, R-Centerville, brought him to Wilmington during the July 4 recess, not long after the DHL proposal was announced to alert him of its seriousness.

Brown said should the jobs leave, the administration has promised it will send someone to the region to help find new jobs to replace those lost - the first time the Bush administration has done so.

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