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Home > Blogs > Ohio politics > Archives > 2008 > August > 13 > Entry
Voinovich writes German Chancellor Merkel about DHL
Sen. George Voinovich is applying a little diplomatic pressure on the DHL situation.
Voinovich, along with fellow members of the Ohio congressional delegation, Wednesday, Aug. 13, sent a letter to German Chancellor Angela Merkel complaining about a proposal by DHL to abandon its Wilmington air hub and allow UPS to handle its domestic shipping.
The letter after the jump:
August 13, 2008
Her Excellency Dr. Angela Merkel Chancellor of the Federal Republic of Germany Willy-Brandt-Straße 1 10557 Berlin Germany
Chancellor Merkel:
We are writing to bring a very serious situation involving Deutsche Post World Net and its U.S. subsidiary DHL Express U.S. (collectively “DHL”) to your attention. On May 28, DHL announced it intended to cease its business relationship with ABX Air and ASTAR Air Cargo. Instead, DHL announced it intends to enter into a 10-year agreement with United Parcel Service, Inc. (“UPS”) for air transportation services, which if consummated, will result in DHL abandoning a hub in Wilmington, Ohio, resulting in the loss of over 8000 direct jobs and tens of thousands of indirect jobs.
DHL’s announcement to partner with UPS is problematic for a number of reasons. First, we believe the contemplated business relationship between DHL and UPS raises significant and troubling competition issues. Indeed, we find it very troubling as to why a company in a concentrated market would turn to one of its chief competitors to find cost savings. As a consequence, we are deeply concerned about the potential for anticompetitive conduct to occur, and we have raised these issues with both U.S. and EU competition authorities.
Second, we are concerned that DHL’s decision to abandon the Wilmington facility and the surrounding communities will have consequences in the United States beyond the immediate devastating impact to the Wilmington area. Americans are starting to rethink their views on the benefits of global investment and the interconnected global economic system. If DHL’s actions towards Wilmington are indicative, continued erosion in public support for international investment and the global economy is the likely result.
You should note that during meetings with government officials, DHL’s senior management indicated that the state of Ohio, the Wilmington-area workers, ABX Air, and ASTAR Air Cargo were all high-quality partners in the operation of the Wilmington facility. The stakeholder commitment to DHL also entailed a significant financial component. The state of Ohio, city of Wilmington, and Clinton County have invested over $400 million into the Wilmington area in support of this hub. In spite of all of the substantial stakeholder commitments to DHL, the company plans to abandon Ohio without giving the stakeholders the opportunity to work as trusted partners to help DHL to succeed.
Moreover, DHL’s treatment of the stakeholders in recent months can be described as nothing less than appalling considering the long and friendly relationship between our two nations and the businesses that operate in both countries. For example, in what can charitably be described as a major error in protocol, DHL made its announcement about the Wilmington facility while it was hosting the Mayor of Wilmington in Germany. When it made this announcement, DHL gave no advanced notice to Wilmington’s Mayor or other Ohio political and business leaders.
We raise this issue with you not only out of concern for the Ohio workers that will be impacted by this decision, but also because we are concerned that such dismissive treatment by such a significant German company will not be easily forgotten in the United States. The situation and DHL’s indifference could easily undermine U.S. views on matters such as completing the next stage of the Open Skies, how foreign investment into the United States is viewed, and general U.S.-German trade relations. The attention the DHL proposal has drawn from both Presidential campaigns serves to confirm the urgency of this situation.
We understand that there is some surprise about the opposition to this transaction. Our reaction should not come as a surprise. In fact, we understand a similar situation arose in Germany related to the closing of a mobile phone manufacturing facility and the loss of German jobs, and the reaction was equally as strong. At a minimum, in the worst-case scenario, we believe DHL has a social obligation to provide substantial assistance with regard to severance packages, health care coverage, and the redevelopment of the Wilmington facility. DHL owns the Wilmington air facility, and we believe it entirely appropriate for DHL to return the airport to the community, provide the requisite assistance for the city to redevelop this important asset, and allow the community to mitigate this devastating loss should DHL decide not to reconsider its decision.
As a result of the concerns we describe above, we believe it is important that you are aware of this situation. We hope that DHL will reconsider this decision and work with its American partners. We would appreciate your bringing to DHL’s attention the international aspect of the decision and would be more than happy to work with your designee if you believe it would be helpful.
Sincerely,
George V. Voinovich
Sherrod Brown
John Boehner
David Hobson
Jean Schmidt
Tim Ryan
Betty Sutton
Zack Space
Patrick J. Tiberi
Charlie Wilson
Jim Jordan
Steve Chabot
Michael Turner
Robert E. Latta
cc: Ambassador Klaus Scharioth Ambassador William R. Timken, Jr.
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