Distorting the DHL Deal

Summary
Ads from the AFL-CIO and the Obama campaign claim that McCain is partly to blame for the loss of more than 8,000 jobs in Ohio. They paint a false picture.

There's at least some truth in both ads: German-based DHL announced a deal that could result in 8,200 lost jobs in Wilmington, Ohio. And McCain did in fact oppose an amendment that would have kept DHL from buying Wilmington-based Airborne Express. McCain's campaign manager, Rick Davis, was also a DHL lobbyist charged with easing the merger through the Senate.

But the ads go too far. Some statements about McCain are misleading and some of the inferences the ads invite are unsubstantiated:

The ads charge that McCain opposition to a 2003 amendment helped DHL and amounted to turning his back on workers. That's misleading. McCain said he opposed a version of the amendment because it was a special project inserted into an unrelated bill, not to help DHL. And the Teamsters union praised the merger at the time, saying that it would lead to more jobs. And at first, more jobs indeed followed.

The ads also imply that the DHL merger is a direct cause of the job losses in Ohio, which we find to be both unlikely and unsubstantiated. Airborne Express had laid off 2,000 employees before the merger, and analysts at the time said that the struggling carrier would need to make expensive investments in its international infrastructure to remain competitive.

Analysis
The AFL-CIO and presumptive Democratic presidential nominee Barack Obama are blaming John McCain for the loss of more than 8,000 jobs in southwestern Ohio. The AFL-CIO mailer is the most explicit, saying that "McCain helped cut a deal that sent over 8,000 jobs to a foreign-owned company." Obama's television ad, which began airing on Aug. 14, charges that "John McCain helped pave the way for foreign-owned DHL to take over an American shipping company." An Obama radio ad, which began airing in Ohio over the weekend, repeats the message that McCain "used his influence in the Senate to help foreign-owned DHL buy a U.S. company and gain control over the jobs that are now on the chopping block in Ohio."

The Backstory
In 2003, DHL, a company owned by Deutsche Post (the German equivalent of the U.S. Postal Service) announced that it would purchase the ground fleet of Seattle-based Airborne Express. The merger gave DHL a fleet of more than 15,000 trucks, as well as ownership of Airborne's Wilmington, Ohio, hub, which consisted of a sorting facility and the world's largest privately owned airport.

Legal challenges from United Parcel Services and FedEx prevented DHL from purchasing Airborne's air freight service. That's because federal law prohibits foreign ownership of any U.S. airline. As a result of those legal challenges, DHL had to sell the airline it had already owned to American investors. That airline became ASTAR Air Cargo. Moreover, when DHL purchased Airborne Express, it had to spin off the air cargo portion into a separate business, ABX Air, which remained under the ownership of the original Airborne Express stockholders.