On May 28, 2008, Deutsche Post, the parent corporation of overnight air delivery company DHL of America, announced a deal by which its chief competitor, United Parcel Service, would perform all of DHL’s North American flying. This arrangement would have UPS displace ASTAR and ABX, two air carriers that have operated out of southern Ohio for many years.
ASTAR (formerly DHL Airways) and ABX were restructured five years ago by DHL for the purpose of meeting its airlift requirements to allow it to compete against UPS and Federal Express in North America. If this deal goes through and Deutsche Post is allowed to abandon companies it reorganized to serve it, 10,000 employees in southern Ohio will be thrown out of work, leaving many communities devastated. In addition, Deutsche Post will have succeeded in destroying two viable companies that, prior to its entry into North America, supplied jobs and competition in the expedited delivery market.
ASTAR pilots, represented by the Air Line Pilots Association international (ALPA), every night carry roughly 50 percent of the weight out of Wilmington, Ohio, for DHL, the world’s largest international air express network. DHL is a 49 percent owner of ASTAR and is represented on ASTAR’s board of directors. ASTAR has been providing air cargo services to DHL for almost 30 years
The DHL/UPS deal raises major antitrust and competitive concerns that deserve careful scrutiny. There are also significant legal issues as to whether the proposed transaction violates scope and job security commitments made to ALPA, which DHL approved.
Therefore, the proposed DHL/UPS transaction should not be consummated or effectuated until a full investigation of its antitrust, competitive and employment implications is completed by the Department of Justice, Congress and the state of Ohio, and all such questions are answered. In addition, the transaction should not be allowed unless all scope and job security commitments made to ALPA, other employees and the community are honored. Finally, if the transaction is permitted to proceed following appropriate government review, UPS should be compelled to make job offers to all impacted employees for any positions that come open in their classification after the deal is implemented.