Release #08.43
September 9, 2008
Pilots: DHL/UPS Proposal Is “One Bad Deal”
Agreement would cut 10,000 jobs, slash competition, and harm economy
“The proposal is bad for pilots, bad for ASTAR, bad for competition in the U.S. air express industry, bad for southwestern Ohio, bad for American workers, and bad for the U.S. economy,” said Capt. John Prater, president of the Air Line Pilots Association, Int’l (ALPA), after his testimony. “Congress must meticulously scrutinize this proposal and ensure that it is thoroughly reviewed by the antitrust authorities before it goes forward.
“The agreement stems from once-secret discussions between UPS and DHL, which were deliberately hidden from affected companies, employees, and public officials,” continued Prater. “In ALPA’s case, the secrecy was clearly intended to deprive ASTAR pilots of the chance to protect themselves, in both bargaining and litigation.”
“This backdoor deal would spell financial disaster for thousands of families across Ohio who are already reeling from hard economic times,” said Capt. Pat Walsh, chairman of ALPA’s ASTAR pilot group. “We need Congress to act quickly to put the brakes on this proposal.” Prater was joined at the hearing by Walsh and dozens of the 525 pilots ALPA represents at ASTAR Air Cargo, who have flown cargo for DHL for more than two decades.
In May of this year, Deutsche Post, the Germany-based parent Company of DHL, announced that it was negotiating to transfer all North American flying currently performed by ASTAR and ABX to its competitor, UPS. Although it held a 49 percent stake in ASTAR and had two representatives on the airline’s board of directors, Deutsche Post did not inform ASTAR or its employees that it had been negotiating with UPS for six months. At the same time that Deutsche Post was cutting the deal with UPS, ASTAR was negotiating a collective bargaining agreement with ALPA.
The central issue in the most recent contract negotiations between ASTAR and ALPA was job security. While DHL was making demands with respect to the job security provisions of any agreement between ASTAR and ALPA and requiring settlement of the ALPA-DHL litigation, DHL and its parent, Deutsche Post, were negotiating to hand over all ASTAR flying to UPS.
“Hindsight is always 20/20. Now that we know about the secret deal with UPS, it’s obvious that these demands were designed to clear the way for it,” said Walsh. “We appreciate Sen. Sherrod Brown’s leadership and we gratefully thank all of the elected representatives from Ohio who are supporting our pilots, their families, and their communities by going over this deal with a fine-tooth comb.”
“It is hard to see how the proposed DHL/UPS alliance would benefit U.S. consumers,” said Prater. “We urge the Judiciary Committee to ask the parties not to implement this deal until and unless it has been reviewed by the Department of Justice or the Federal Trade Commission.”
Founded in 1931, ALPA is the world’s largest pilot union representing 53,000 members at 37 airlines in the United States and Canada. For more information, visit www.alpa.org.
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ALPA Contacts: Pete Janhunen, Linda Shotwell, Molly Martin, (703) 481-4440,
media@alpa.org
WASHINGTON – The head of the world’s largest pilots union called a DHL/United Parcel Service proposal to transfer all DHL flying from ASTAR and ABX to competitor UPS “One Bad Deal” for workers, air express competition, and the U.S. economy in testimony before the U.S. House Judiciary Committee today.
In 2003, Deutsche Post sought to expand its North American operations to become a competitor to FedEx and UPS by purchasing Airborne Express, merging its ground operations into DHL’s, and spinning off its air operations as ABX Air. However, once Deutsche Post/DHL entered into the same sort of commercial arrangement with ABX as it had with ASTAR, the company renounced any obligation to adhere to the job security agreement it had with ALPA. This led to several years of litigation between ALPA and DHL.