Monday, November 10, 2008

Job Cuts Hit Home

It's interesting to note that the German delivery giant DHL cutting 9,500 jobs in the United States that the full story -- or at least the full story as I've heard it -- isn't coming out.

I have two relatives who work for DHL; both have either lost their jobs or will soon lose their jobs. From what I've heard from them, the reasons DHL is cutting jobs stem more from a non-comete agreement DHL has signed with FedEx and UPS and with arcane US security measures than the soured economy.

From what I understand, the agreement that DHL has signed/will soon sign calls for the company basically to abandon domestic deliveries within the United States, in favor of FedEx and UPS. In "exchange," DHL gets the promise that the two US companies will use its delivery infrastructure in other parts of the world -- an economy of scale savings, or so it seems. And that's fine. If that's how DHL wants to do business, that's their, uh, business. But it just seems odd that a company appears to be squeezed out of the states, just because the local boys don't want to compete.

Another difficulty is even more odd. Because of security measures put into place after 9/11, DHL can't operate its own airplanes in the United States -- apparently, you have to be based in the US to operate planes here. Since DHL is based in Germany, they're unable to meet this rule, so no planes for them. I've been told they were contracting the work out to a US-based company, but as contracting is almost always more expensive than doing it yourself, they were struggling to make the situation work on a business platform.

I'm not sure I believe the part about the homeland security rule; that just seems so farfetched. But I suppose stranger things have happened.

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