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UPS says deal would save jobs

September 10, 2008|From Bloomberg News

United Parcel Service Inc. told U.S. lawmakers that its plan to take over air shipments for Deutsche Post's DHL unit would preserve competition and 40,000 jobs.

"Any suggestion that UPS could somehow manipulate the way in which DHL packages move through our system to gain competitive advantage is simply untrue," Burt Wallace, president of corporate transportation at Atlanta-based UPS, said in congressional testimony Tuesday.

UPS, the world's largest package delivery firm, is trying to blunt criticism from Ohio lawmakers and unions that its plan with DHL would harm competition and cost jobs. In May, UPS said it was working on a deal to take over U.S. air shipments from two DHL contractors that have hubs -- including one in Riverside.

There's no timetable for reaching an agreement, said Malcolm Berkley, a UPS spokesman.

"We are worried about it," said House Judiciary Chairman John Conyers Jr. (D- Mich.). "Any transaction in which one package delivery company's entire air service is provided by a competitor must be viewed with a heavy dose of skepticism."

The collaboration would preserve 40,000 DHL-related jobs, because DHL has said it might not be able to remain in the U.S. without restructuring, UPS' Wallace said. DHL has U.S. operating losses of $5 million a day, said John Mullen, chief executive of DHL Express. Removing business from existing DHL vendors would cost 10,000 jobs, said John Prater, president of the Air Line Pilots Assn.

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