Deutsche Post World Net Chief Executive Officer Frank Appel today sent a formal response to U.S. Sen. John McCain and Rep. Mike Turner, who had asked the head of the cargo company to come to Wilmington, Ohio, and explain the company’s planned action. His answer was similar to what he told the Wall Street Journal in an interview last week: there is “no alternative to taking this drastic measure.”

The “drastic measure” involves Deutsche Post’s package delivery division, DHL Express. It wants to contract with United Parcel Service for what it calls “airlift” in the United States. That means it would no longer use its Wilmington airport and hub, creating a job loss in Ohio of at least 8,000 people.

The scope of the potential job loss, symbolizing the economic challenges in parts of the United States, has put Wilmington’s woes into the narrative of this year’s presidential race. McCain visited Wilmington recently and said he would try to help, and he and Turner, who represents the area in Congress, wrote to Appel and asked him to come from Germany so he could talk first-hand to the affected community.

Democratic presidential candidate Barack Obama has discussed the issue with community leaders and, like McCain, supports congressional and Justice Department inquiries into antitrust implications of the planned DHL-UPS air operation. Obama has not visited Wilmington, but he has criticized McCain because of legislative work the Arizona senator did in 2003, during DHL’s acquisition of the former Wilmington air park operator, Airborne Express.

McCain’s campaign manager, Rick Davis, worked as a lobbyist in 2003 to help the Airborne Express-DHL merger go through. The deal brought new jobs to Wilmington for several years and may have saved the then-struggling Airborne Express. But the Obama campaign says it put control in a foreign corporation’s hands and now threatens to destroy Wilmington economically. Obama has turned that theme into anti-McCain campaign commercials.

Appel, the CEO of Deutsche Post, said in his letter today that there is no choice. He also said that the deal with UPS is for “an outsourcing contract for services between two separate companies….and would not diminish the competitive situation between DHL and UPS in the U.S. in any way.”

“I am very aware that the plan will have significant impact on the people working at the air hub in Wilmington,” Appel wrote. “However, there is no alternative to taking this drastic measure. DHL Express U.S. currently incurs annual losses of $1.3 billion. This leaves me with no other choice than to proceed as planned, also considering my overall responsibility as Chief Executive Officer of a global company and to safeguard as many jobs as possible in the U.S.”

DHL’s top management has been in touch with officials in this country for months, Appel said, noting his phone conversations with Ohio Lt. Gov. Lee Fisher and U.S. Ambassador William Timken. DHL Express CEO John Mullen and his team have met with Sens. Sherrod Brown and George Voinovich, Turner, Fisher, Gov. Ted Strickland and several state legislators, Appel said.

He said the company “has already committed to fund a triple-digit million-dollar amount on planned severance, retention and health benefits for the workforce” in Wilmington and elsewhere. All details of these “mitigation efforts” being carried out by a senior team will be brought to his personal attention, Appel said, hinting — but not specifying — at possible other measures. Although community and state leaders have discussed gaining control of the airport, in hopes of attracting another carrier or some other use, Appel did not address that directly.

“I want to give the team time to determine the effectiveness of the ongoing mitigation efforts and other initiatives, if any, that may be appropriate for DHL to help Wilmington,” he said. “Once that plan is established, I plan at the appropriate time to travel to the U.S. to discuss how we can implement it in close cooperation and open dialogue with local authorities and other stakeholders. I will be happy to keep you informed on progress.”

In closing, Appel told the GOP presidential candidate and the local congressman: “Again, the DHL family and I personally deeply regret that this unavoidable and irreversible decision will cause severe hardship to many families in Wilmington and Ohio. My colleagues and I will do our best to be of help.”

Tags: DHL

A congressional committee will hold a hearing on a proposed deal between DHL and United Parcel Service that threatens more than 8,000 jobs in southwest Ohio.

The chairman of the House Transportation and Infrastructure Committee said Friday that the hearing requested by Ohio’s congressional delegation will be held when Congress reconvenes in September.

Chairman James Oberstar, D-Minn., said he is concerned about the proposed deal and its effects on service, costs, consumer choice and jobs.

DHL wants UPS (nyse: UPS - news - people ) to replace ABX Air and Astar Air Cargo in transporting DHL packages. Much of the work handled at Wilmington Air Park in southwest Ohio would be transferred to UPS facilities.

Rep. Mike Turner, R-Ohio, said Friday that the deal would have a devastating impact on the local, state and national economy.

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Tags: DHL

The Air Line Pilots Association International (ALPA) announced Tuesday it has filed a lawsuit against DHL Holdings USA on behalf of ASTAR Air Cargo Inc. pilots.

In a suit filed in the Court of Common Pleas in Clinton County, ALPA alleged that DHL breached its contract with ASTAR pilots. It also accused DHL of fraudulent inducement. DHL is owned by Deutsche Post World Net, and it operates a major sorting center in Wilmington.

DHL is in negotiations with Atlanta-based United Parcel Service Inc. (NYSE: UPS) to take over its North American air service from ASTAR Air Cargo, which was formerly DHL Airways.

The deal would also negatively affect another DHL spin-off, Air Transport Services Group (NASDAQ: ATSG) in Wilmington, which operates ABX Air and gets much of its business from DHL.

ALPA alleges DHL is in violation of certain job security assurances under ASTAR pilots’ labor agreement.

The pilots also claim that DHL “fraudulently induced” the pilots union to drop lawsuits against the parcel company by promising job security assurances while the pilots argue the company was in discussions about switching service to UPS, according to a news release.

The pilots union has asked the court to enjoin DHL from switching service to UPS. ALPA also asks for compensatory damages and attorney’s fees.

ALPA says 10,000 pilots and other DHL employees will lose their jobs with the switch to UPS.

An after-hours message left with a DHL spokeswoman was not immediately returned. Representatives with UPS declined to comment.

Tags: DHL

Two U.S. senators have asked the Justice Department and the Federal Trade Commission to review a proposal by UPS Inc. to carry some air packages for DHL. But UPS says the agencies don’t have authority over the vendor relationship.

Sen. Herb Kohl, D-Wisc., and Sen. Orrin Hatch, R-Utah, said in a letter dated Friday to Thomas Barnett, assistant attorney general in charge of the Justice Department’s antitrust division, and William Kovacic, chairman of the Federal Trade Commission, that the deal being worked out raises competition concerns.

“If consummated, DHL will become reliant for air transportation on one of its two major competitors,” the letter states. “This raises the question if DHL will still be able to effectively compete against UPS, since UPS will now have a large role in determining the cost and quality of DHL’s services.”

UPS spokesman Norman Black said Monday that the arrangement the Atlanta-based company is working out with DHL is similar to one it has been operating under for several years with the United States Postal Service.

“It is very clear to us this is not an antitrust matter,” Black said. “There is no partnership, no joint venture, no merger, no acquisition.”

Black said UPS has not received any communications from the Justice Department or the FTC about the proposed deal. He said lawyers for UPS and DHL continue to work on finalizing a contract, which they expect to complete by the end of the year.

Justice Department spokeswoman Gina Talamona said Monday the agency has seen media reports about the proposal, but she declined to comment further.

“Generally speaking, the antitrust division can look at matters that affect competition,” Talamona said.

An FTC spokeswoman did not immediately return a call Monday seeking comment.

UPS said when it announced the proposed collaboration with DHL on May 28 that the deal, when completed, will add up to $1 billion in annual revenue for UPS, also known as United Parcel Service. DHL is the struggling U.S.-based express shipping unit of German postal service Deutsche Post AG.

The deal could be a significant blow to DHL’s current vendors for the air shipments UPS is seeking to take over. Thousands of jobs could be lost in Ohio, where some officials are trying to scuttle the deal.

UPS shares rose 92 cents, or 1.5 percent, to $63.18 in afternoon trading Monday.

Tags: DHL

Package delivery company United Parcel Service Inc (UPS.N: Quote, Profile, Research, Stock Buzz) is “making good progress” on concluding a 10-year agreement to provide North American air service for DHL, the company’s top official said on Tuesday.

UPS and the express unit of Deutsche Post (DPWGn.DE: Quote, Profile, Research, Stock Buzz) said during the second quarter that they were working on an agreement for UPS to haul DHL’s express, deferred and international packages within the United States and between the United States, Canada and Mexico. (Reporting by Nick Carey, editing by Gerald E. McCormick)

Tags: DHL