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COMMENTARY

Kevin Riley: Wilmington mayor takes on DHL to save his town

By Kevin Riley

Sunday, June 22, 2008

It would be hard to find anyone who was more surprised than Wilmington Mayor David Raizk by DHL's recent decision that could eliminate 6,000 jobs in his town.

He was surprised because he'd received repeated assurances from company officials that, despite the fact that DHL was losing $900 million per year on its U.S. operations, DHL was sticking with the cargo hub. And, maybe in naive hopefulness, he couldn't, in his wildest dreams, imagine DHL walking away and devastating the community where he was born and raised.

Finally, there was this: DHL dropped the news on Raizk while he was on a feel-good visit with company officials in Germany. Having just finished lunch and a tour of DHL's new building in Bonn, he was then invited to watch a webcast of DHL's announcement.

"I was floored," he said.

Raizk (pronounced "resk") said he immediately asked a top DHL official, "Do you understand how many people this will affect?"

Now the mayor finds himself doing a desperate dance where he is both appealing to and confronting a huge multinational corporation.

Clinton County's seat might seem like an unlikely place for an international business drama to play out. But this is not the first time Wilmington's huge commercial airport has been in an unlikely situation.

As Raizk tells the history, the federal government built the airport as a training site for pilots who towed gliders for the D-Day invasion. After WWII, it became a reserve air base in support of Wright-Patterson. In the days of the Cold War, there was concern that an enemy attack could knock out Wright-Patt. So the Air Force built a runway that could handle B-52 bombers in Wilmington.

When the government later closed the base, Wilmington bought it.

In time, the airport ended up in the hands of Airborne Express, which built it into a world-class cargo hub. Through the twists and turns of the competitive overnight cargo business, DHL (now owned by German conglomerate Deutsche Post World Net) bought Airborne — and spun off the part of the company that flew the planes.

Today ABX Air Inc. is the largest employer for six area counties, according to the mayor. It operates under a contract to deliver and sort packages at the airport; virtually all of its work is for DHL.

Instead of using ABX to fly its packages, DHL now wants to use UPS.

It's tempting to turn DHL into a villain. But when a large company is hemorrhaging cash, that's not sustainable. DHL says it can save money by cutting a deal to use rival UPS' airport in Louisville.

In his rescue efforts, Raizk has the help of a task force that includes Lt. Gov. Lee Fisher. Last week Fisher spoke by phone with the CEO of Deutsche Post, but the company offered little hope of changing its plans.

Still, Raizk's task force wants the company to look at a cost-saving proposal from ABX. Fisher said the state also is considering raising antitrust arguments to try to stop the DHL-UPS deal.

In the end, though, the company has to make money.

"If all we do is stop the deal and don't stop the bleeding at DHL, we haven't won much," Fisher said.

Wilmington gets $2.6 million in income taxes from ABX employees, while the city schools receive nearly $600,000, the mayor said. Losing that money would be huge hits to the city's and schools' budgets.

John Graber, president of ABX, tells a story of a recent visit he made to a Wilmington school. He was in a second-grade classroom as part of a program in which community and business leaders read to students. Upon introducing himself and telling the kids where he worked, Graber said virtually every student had a parent or another family member who works at ABX.

Within a couple of years, the skies over Clinton County could be empty of the 85 planes a day that land at the cargo hub. A lot of people are hoping Raizk finds a way to keep them flying in and out of Wilmington.

Kevin Riley is the editor of the Dayton Daily News. Contact him at (937) 225-2161 or kriley@coxohio.com.

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