Distorting the DHL Deal

The upshot is that DHL cannot fly its own packages. It collects packages on the ground and transports them to airports, but it has to contract the air transport of those packages to U.S.-owned airlines. DHL had used ABX Air (which also operated the sorting facility in Wilmington) and ASTAR Air Cargo to move packages by air. But, in May 2008, DHL announced that it would no longer use ABX or ASTAR and would instead pursue an agreement to contract its sorting and air freight to UPS. ABX Air President John Graber says that the move could cost his company 6,000 jobs. Wilmington's mayor, David Raizk, told the Dayton Daily News that another 1,000 ASTAR employees as well as 1,200 DHL workers could face unemployment as well.

Part of the Rest of the Story
The Obama campaign and the AFL-CIO both use the Wilmington debacle to paint McCain as bad for Ohio workers. The AFL-CIO mailer informs us that McCain "turned his back on 8,000 Ohio workers" when he "helped cut a deal" to send those jobs "to a foreign-owned company." The mailer goes on to tell us that McCain "could have stopped the deal" but didn't.

Obama's television ad leads off with two local Ohio residents. Chris Fisher explains that without DHL, Wilmington will be "a ghost town." She is followed by Ed Rutherford who relates his personal hardship of losing his job. The announcer then informs us that McCain "helped pave the way" for "foreign-owned DHL to take over an American shipping company," putting thousands of jobs at risk. The ad closes with Rutherford saying that he feels a "foreign entity" is "sucker punching us."

Obama for America Ad:"Ohio Jobs"
Chris Fisher: If DHL [inaudible] if something happens, it's gonna be like a ghost town.

Ed Rutherford: I thought I was doing a good job providing for my family, and to have that taken away…

Narrator: In Washington, John McCain helped pave the way for foreign-owned DHL to take over an American shipping company. McCain's campaign manager was lead lobbyist for the deal.

Narrator: Now, thousands of Ohio jobs at risk.

Rutherford: It's tough times, when it's a foreign entity coming in and sucker punching us. That's how this felt.

Obama: I'm Barack Obama and I approve this message.

Obama's radio ad hits on many of the same themes. It begins with McCain's admission that there is likely nothing McCain can do to prevent DHL from eliminating 8,200 jobs. The ad then intones that "there's something John McCain's not telling you" and goes on to explain that McCain "used his influence in the Senate" to help smooth DHL's 2003 purchase of "a U.S. company" and that, more alarmingly, McCain's campaign manager was a lobbyist who was paid $185,000 to lobby on behalf of DHL. Finally, we're told that "foreign-owned DHL doesn't care" that 8,200 Ohioans are losing their jobs.

There is some truth to the ads. As we said, as many as 8,200 workers in Wilmington are likely to lose their jobs as a result of DHL's decision to outsource to UPS. It's also true that in 2003, some senators supported legislation that was designed to make German-owned DHL's purchase of U.S.-owned Airborne Express less attractive. McCain did in fact oppose the legislation. And it's true that DHL paid $185,000 to the firm of Rick Davis, McCain's campaign manager, to lobby for the merger (the $590,000 cited in the AFL-CIO mailer represents the entire amount that Davis' firm collected from DHL during Davis' tenure, most of which went for lobbying on other measures). But it's misleading to say, as Obama does, that McCain "used his influence" to help DHL "buy a U.S. company and gain control over" the 8,200 jobs in question. The AFL-CIO's claim that McCain "could have stopped the deal" is one we find dubious, to say the least.

The Rest of the Rest of the Story
Both ads refer to a fairly obscure legislative battle. In April 2003, Congress was debating a supplemental spending bill to provide additional money for the then-fledgling war in Iraq. Alaska Sen. Ted Stevens wanted to insert an amendment that would have made it difficult – if not impossible – for DHL to acquire Airborne Express. A number of senators and representatives opposed the measure, as did President Bush. According to reports by Congressional Quarterly, McCain convinced Stevens to offer a watered-down version, which Stevens introduced as part of a 13-page "manager's amendment" just before the vote on the final bill. The proposal:

S. Amend. 522: None of the funds in this Act may be obligated or expended to pay for transportation described in section 41106 of title 49, United States Code, to be performed by any air carrier that is not effectively controlled by citizens of the United States.