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Do IT this week: Layering
Lawmakers who oppose air deal with DHL find most colleagues reluctant
By Marilyn Geewax
Cox News Service
Published on Sunday, Oct 05, 2008
WASHINGTON: Powerful political leaders are trying to block United Parcel Service from providing air cargo services for its rival DHL.
These opponents, who fear the loss of jobs and competition, have spurred two congressional hearings and secured the support of both presidential candidates.
Still, the UPS-DHL agreement, announced in May, remains on track to close this year. Atlanta-based UPS' giant's deftness at deflecting criticism highlights its clout on Capitol Hill, where it has long-standing relationships.
When lawmakers ask questions about the DHL deal, UPS lobbyists ''immediately respond,'' UPS spokesman Norman Black said. ''That's their job.''
And they do that job with the help of heavy spending. According to records compiled by the Center for Responsive Politics, a nonpartisan, nonprofit Washington research group that tracks money in politics, UPS contributed $22.5 million to federal candidates in the 1989-2008 period. That gave the company a ranking of No. 21 on the center's ''top all-time donors'' list.
About two-thirds of its spending went to Republican candidates. On the list of contributors to Republicans' political action committees, UPS ranked No. 7 for the 2007-2008 election cycle, with $948,208 donated, according to data released by the Federal Elections Commission on Sept. 17.
UPS does not reveal how many lobbyists it employs, but the Center for Responsive Politics says UPS has spent at least $17.3 million on lobbying since 2002, with more than $2.5 million being spent just in the first half of this year.
The key issues for the company's lobbyists are free trade, transportation infrastructure and aviation policy.
Lawmakers who have opposed UPS on legislation have found themselves facing a tough foe. Among them is Sen. Herb Kohl, D-Wis., who introduced the Prevent All Cigarette Trafficking Act to impose new shipping and record-keeping requirements on those who sell cigarettes by mail, phone or Internet.
The bill passed the House 379-12 last month, ''but stalled in the Senate — again,'' said Rohit Mahajan, Kohl's press secretary. UPS mounted ''one of several lobbying efforts that have successfully blocked Sen. Kohl's PACT Act,'' he said.
Black, the UPS spokesman, said that although the company does lobby on many matters, ''We are not lobbying on the DHL issue because we don't need to. Congress has no role — this is a straight vendor contract.''
Under the proposal, UPS would get an infusion of $1 billion in annual revenue from DHL, the U.S.-based express shipping unit of German postal service Deutsche Post AG. In exchange, UPS would transport DHL packages among airports in North America.
UPS would not pick up or deliver DHL packages to customers, leaving the companies to continue to operate as rivals, UPS says. The arrangement would be similar to an existing contract with the U.S. Postal Service, it argues.
But the deal would mean the loss of thousands of jobs at DHL's air cargo facility in Wilmington, Ohio. That has drawn criticism from both presidential candidates, Sens. John McCain, R-Ariz, and Barack Obama, D-Ill., and from other Congress members who have called for a Justice Department antitrust review.
Ohio lawmakers say the deal would limit competition.
Because the transaction has not yet been finalized, antitrust regulators have not commented. Black said UPS would provide Justice with a copy of the agreement, but does not expect an antitrust review because ''this is not a merger, not a partnership and not a joint venture.''
Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, a nonprofit group, said that while only the Justice Department can block deals on antitrust grounds, Congress can have influence.
For example, if Congress is unhappy with Justice, it can retaliate by holding ''unpleasant hearings, reducing appropriations or threatening legislative changes,'' she said. ''The fewer lawmakers you have writing nasty letters about you to Justice, the happier a company is,'' she said,
To discourage lawmakers from pressuring Justice, UPS has been explaining its position to them. Sen. Johnny Isakson, R-Ga., describes the UPS lobbyists as ''very well respected and professional.''
With the DHL controversy raging, the UPS lobbyists ''met with us and told us their story,'' he said. ''I realize this (transaction) will cost some jobs in Ohio. But UPS has made a compelling case'' that in a slowing economy with sky-high jet fuel prices, this is a sensible deal, Isakson said.
Pat Walsh, a pilot who transports DHL cargo for ASTAR Air Cargo, agrees that in the package delivery business ''there is a lot of excess capacity.'' But if UPS and DHL were to complete this deal, 500 pilots in his chapter alone of the Air Line Pilots Association will lose their jobs, he said.
''We're fighting this on a lot of different fronts,'' including sending pilots door to door on Capitol Hill to make personal appeals.
''The Ohio delegation has been fighting this deal,'' Walsh said.
But the pilots are in a tough position. ''UPS is a big company to go up against,'' he said. Not to mention, with 358,000 employees, UPS has a presence in virtually every congressional district.
Trying to outlobby UPS ''has been a real lesson in how government works,'' he said.
WASHINGTON: Powerful political leaders are trying to block United Parcel Service from providing air cargo services for its rival DHL.
Get the full article here.
Comments
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Posted 11:29 AM, 10/06/2008
This article is not fair to a very honorable company. As Mr. Black has stated we are not lobbying on this issue because we don't have to. We do lobby on issues that affect our business. DHL is losing massive amounts of money in the U.S. and is trying to stop the hemoraging. I've worked for UPS for 14 years now and know this company to be one of the most ethical and philanthropic of all. We are for eight years in a row now the largest donor to the United Way. Believe me, I feel for the people of Ohio. I used to live in Akron but I don't see how my company is the bad guy here. Maybe we should look at how we let foriegn companies come charging in here and setting up shop and then realizing that it's not that easy. I've read that Senator McCain is partially responsible for that.
Posted 01:46 PM, 10/06/2008
I'm sorry to see so many people in Ohio loose their jobs because of DHL. But what is a company like DHL do when they are losing $1.2 Billon a year? You just can't keep going on and on. Their either going to make the agreement with UPS or they will shut down. If they shut down both UPS and FDX win, if they make the UPS deal then UPS (if they do a good job) wins. Ohio loses either way -- sorry.
Posted 04:01 PM, 10/06/2008
It is time politicians & government stop interfering with business, look what is happening to our economy today. Both presidential candidates & others are attempting to look good as politicians always attempt with their rhetoric. Maybe (tax payers) should bail DHL out as well, after all government circumvented the law by allowing a foreign (German post office) to operate an airline in the US which is unlawful. As the economy now is in shambles maybe we should allow DHL to fail and have a greater unemployment situation. At the least maybe with this agreement, UPS can retain its 300 thousand employees (mostly teamster union) employees working, & still keep the majority of DHL employees working. Did you not read that DHL is giving those effected employees a severance pay and other assistance? I feel for those affected but it is fruitless to use a bucket to bail water when the boat has a gaping hole in it. Maybe, just maybe, UPS will hire additional people should any additional volume necessitate.
BOB
Posted 04:22 PM, 10/06/2008
Well why don't we just bailout DHL too? It seems like we are bailing out everyone else. Lets add the German Post Office (DHL) to the list. And while we are at it, reduce my mortgage payments and my principal. And maybe the government should buy us new cars. In fact, lets all just ship a bunch of empty boxes at taxpayers expense so people can have something to do. IS ANYONE OUT THERE REALLY PAYING ATTENTION TO WHAT IS GOING ON? This is free enterprise folks. It may have some pain sometimes but it beats the alternative. Let business be business and lets get this government out of our business...
Posted 06:59 PM, 10/06/2008
The issue goes back to the granting DHL the ability to have a ground presense in the UPS. My understanding that UPS fought tooth an nail to keep DHL ( a german owned company) from buying Airborne to gain entry into this market. Now it looks like they are bedfellows. The issue along is what DHL promised to gain entry and have they lived up to that promise. UPS is no angel. They are more then willing to hide behind the FAAAA act of 1994 as they back charge their customers for fictitous dim wts from their laser scanners and then refuse to admit that they have just created a revenue stream that allows them to steal money. Remember the butcher putting his thumb on the scale. Then they have enough gall roll out an Atlanta ruling (their corporate headquarters) saying that they are allowed to do it under the FAAA Act of 1994. Wonder how much that cost them to get that ruling. Mr Black is well aware of these issues. UPS has a spin you would not believe. Try a little google of Walmart, UPS and China and then ask where your job is going and who is marshalling the support free trade.
