DHL a history of Deception
07-25-2008, 09:05 AM
#1
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Posts: 10
DHL a history of Deception
I used to work for Astar. I am often asked about DHL’s operations and who really flies for them. A little DHL history is needed to tell the story. I will try to be brief.
DHL was founded by three Americans, Dalsey, Hillblum & Lynn, hence DHL. From the start they concentrated on international shipping and all but ignored the US domestic market. DHL operates worldwide as a network of divisions. Each division has separate airlines that fly for them. The pilots who fly for the US division have never been on the same seniority list with any of these other airlines.
DHL Airways, now called Astar, is DHL’s legacy carrier in the US. About 10 years ago the last remaining founder and owner of the company Larry Hillblum died. Following his death the German Post Office bought DHL. With this purchase DHL became a foreign owned company and the US division was in violation of laws prohibiting foreign ownership or control of an airline in the US. DHL Airways was separated from DHL and sold off to a group of Americans and rebranded as Astar Air Cargo. Astar became a contractor to DHL and the pilot group had a scope clause signed by DHL prior to the spin off stating that all DHL flying in the US would remain Astar flying.
About 4 years ago DHL purchased Airborne Express. They had the same problem with that airline and it was separated and became ABX Air. Astar went to court to enforce their scope clause that all DHL flying belonged to them. I believe that had they succeeded Astar and ABX would have had to merge into a single carrier and that carrier would have had scope with DHL.
However ABX lawyers did some clever legal maneuvering to exploit some technicalities and Astar’s scope clause was defeated. That was the day that Astar received the death sentence. Since then the only question has been the timing and manner of their demise. The defeat of Astar’s scope meant that they really were just a contract and DHL was free to do as it pleased.
ABX with the full support of their pilot’s union beat Astar’s scope clause and set in action a series of events that ultimately resulted in the present situation. The ABX guys were just trying to protect their jobs but the results are clear. No scope means zero job security and your company will go under. Even if the UPS/DHL deal fell apart Astar would still go under, just not now and not in this manner.
I left Astar, along with a bunch of other pilots, over a year ago because I got tired wondering when my job would end. It was a good job and it paid well but I felt it had no future, so I left. The timing of this deal is the real tragedy. If it had happened during a airline boom at least the guys could have gotten other well paying jobs.
The pilots at Astar and ABX are a good bunch. They have fought a good fight and had right on their side but it appears DHL has out maneuvered them. DHL ignored Astar’s scope and used ABX as a pawn to defeat it in court and freed themselves to do as they pleased. That is a brief history from my prospective, good luck guys.
DHL was founded by three Americans, Dalsey, Hillblum & Lynn, hence DHL. From the start they concentrated on international shipping and all but ignored the US domestic market. DHL operates worldwide as a network of divisions. Each division has separate airlines that fly for them. The pilots who fly for the US division have never been on the same seniority list with any of these other airlines.
DHL Airways, now called Astar, is DHL’s legacy carrier in the US. About 10 years ago the last remaining founder and owner of the company Larry Hillblum died. Following his death the German Post Office bought DHL. With this purchase DHL became a foreign owned company and the US division was in violation of laws prohibiting foreign ownership or control of an airline in the US. DHL Airways was separated from DHL and sold off to a group of Americans and rebranded as Astar Air Cargo. Astar became a contractor to DHL and the pilot group had a scope clause signed by DHL prior to the spin off stating that all DHL flying in the US would remain Astar flying.
About 4 years ago DHL purchased Airborne Express. They had the same problem with that airline and it was separated and became ABX Air. Astar went to court to enforce their scope clause that all DHL flying belonged to them. I believe that had they succeeded Astar and ABX would have had to merge into a single carrier and that carrier would have had scope with DHL.
However ABX lawyers did some clever legal maneuvering to exploit some technicalities and Astar’s scope clause was defeated. That was the day that Astar received the death sentence. Since then the only question has been the timing and manner of their demise. The defeat of Astar’s scope meant that they really were just a contract and DHL was free to do as it pleased.
ABX with the full support of their pilot’s union beat Astar’s scope clause and set in action a series of events that ultimately resulted in the present situation. The ABX guys were just trying to protect their jobs but the results are clear. No scope means zero job security and your company will go under. Even if the UPS/DHL deal fell apart Astar would still go under, just not now and not in this manner.
I left Astar, along with a bunch of other pilots, over a year ago because I got tired wondering when my job would end. It was a good job and it paid well but I felt it had no future, so I left. The timing of this deal is the real tragedy. If it had happened during a airline boom at least the guys could have gotten other well paying jobs.
The pilots at Astar and ABX are a good bunch. They have fought a good fight and had right on their side but it appears DHL has out maneuvered them. DHL ignored Astar’s scope and used ABX as a pawn to defeat it in court and freed themselves to do as they pleased. That is a brief history from my prospective, good luck guys.
07-25-2008, 01:33 PM
#3
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Joined APC: Dec 2007
Position: DC-9 FO
Posts: 15
A little more perspective
I'd just like to add a couple of notes. About a year ago Astar (shortly after DHL took a 49% stake in it) expressed interest in buying ABX Air for $7.75/share. ABX management rejected the offer and shortly thereafter Astar withdrew the notice of intent. As it turns out ABX was in the process of buying Cargo Holding International (including ATI and Capitol Cargo Intl) There has been lots of speculation about how this decision affected the relationship between ABX and DHL. I guess the only people who really know about that would be DHL management.
Maybe some of the Astar guys can elaborate, but I was under the impression that they had appealed the decision on their scope grievance. If so, it seems that could have been a motivating factor in their last contract negotiations. I believe a key part of that contract was that the grievance was dropped.
This has been a story with lots of twists and turns. There are lots of opinions out there, but I think there may be more twists to come.
Maybe some of the Astar guys can elaborate, but I was under the impression that they had appealed the decision on their scope grievance. If so, it seems that could have been a motivating factor in their last contract negotiations. I believe a key part of that contract was that the grievance was dropped.
This has been a story with lots of twists and turns. There are lots of opinions out there, but I think there may be more twists to come.
07-25-2008, 04:30 PM
#4
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Joined APC: Jan 2006
Posts: 50
ABX's failure to accept the 7.75 offer has played a huge hand in this. That offer, was in fact, at the request of DHL. They wanted one airline and would now allow John Dasburg the opportuntiy to gain what he wanted, all DHL flying. Had ABXA not dismissed this offer, the landscape would be much different today. The CHI deal was a huge roadblock that neither Dasburg or DHL were privy to until after the fact. This was a crushing blow to the survival of both ABXA and Astar. DHL management was extremely irritated by the ABXA/CHI deal, so much so that they called 93 million dollars in debt due to them by ABXA. This resulted in a dispute, arbitration, and eventually(in the future) a pay back of said debt by ABXA. They were quite frankly so disgusted with ABXA, they were willing to literally put them into Bankruptcy( which is likely now anyway). Now the wheels were set in motion to seek alternative options, FedEX and UPS. And so, you get what you see before you today. Astar caught in the crossfire and both airlines headed for non-existence.
As for the scope, Astar actually prevailed in the 9th circuit court of appeals and has successfully moved this case back to the 2nd circuit in NY. It still awaits resurrection there to this day and will be brought again at some point. We ended up in the 9th circuit because ABXA said we were not a RLA carrier or was ALPA a RLA union. Their argument involved a bunch of secondary boycott non-sense etc. and was brought before the NLRB. The NLRB accepted jurisdiction of the case in direct conflict with rulings of the Supreme Court of the United States. ALPA took issue and appealed the NLRB decision to the 9th where we prevailed.
Our scope is not done yet. ABXA in their attempt to stop us actually contributed, yet again, to their own demise. Had we prevailed in our scope claim, we would have forced a merger of ABXA and Astar and again, we would not be where we are today. We know DHL, we were DHL, they still own half of us to this day. We tried, we knew we had to get everything in one basket quickly. Unfortunately, we were blocked at every turn. The above grievance has not been dropped.
This is not directed towards the ABXA pilots. This portion of the mess rests squarely on the shoulders on of your manglement and once the cuts begin, heads will roll, Hete's included. ATSG "family" now sits on a cliff.
As for the scope, Astar actually prevailed in the 9th circuit court of appeals and has successfully moved this case back to the 2nd circuit in NY. It still awaits resurrection there to this day and will be brought again at some point. We ended up in the 9th circuit because ABXA said we were not a RLA carrier or was ALPA a RLA union. Their argument involved a bunch of secondary boycott non-sense etc. and was brought before the NLRB. The NLRB accepted jurisdiction of the case in direct conflict with rulings of the Supreme Court of the United States. ALPA took issue and appealed the NLRB decision to the 9th where we prevailed.
Our scope is not done yet. ABXA in their attempt to stop us actually contributed, yet again, to their own demise. Had we prevailed in our scope claim, we would have forced a merger of ABXA and Astar and again, we would not be where we are today. We know DHL, we were DHL, they still own half of us to this day. We tried, we knew we had to get everything in one basket quickly. Unfortunately, we were blocked at every turn. The above grievance has not been dropped.
This is not directed towards the ABXA pilots. This portion of the mess rests squarely on the shoulders on of your manglement and once the cuts begin, heads will roll, Hete's included. ATSG "family" now sits on a cliff.
Last edited by flyinboxes; 07-25-2008 at 04:43 PM. Reason: because
07-25-2008, 07:25 PM
#6
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Joined APC: Oct 2006
Posts: 276
Originally Posted by flyinboxes
ABX's failure to accept the 7.75 offer has played a huge hand in this. That offer, was in fact, at the request of DHL. They wanted one airline and would now allow John Dasburg the opportuntiy to gain what he wanted, all DHL flying.
It seems to me that DPWN was asking Joe Hete to put all his eggs in one basket, and that ol' Joe just didn't trust the hand that was holding the basket.
Turns out he was right.
07-25-2008, 10:36 PM
#7
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Joined APC: Feb 2006
Position: 777 Capt
Posts: 131
Originally Posted by Whistlin' Dan
Maybe I'm being too simplistic, but why didn't they just invest that money back into Astar, and let ABX go their own way? That would have given them the "one airline" you say they wanted, and it could have been a modern, state-of-the-art airline at that. Surely, DHL didn't want their fleet of DC-9s and stovepipe DC-8's. If it was his 767's they were after, they're available from other sources, they're just not cheap. After all, Joe Hete had to get his from somewhere.
right.
right.
Flyinboxes, I'm no fan of Hete.. I can't understand why the board hasn't fired him. But nobody in Wilmington is responsible for Astar's demise. Those folks are in Germany.
07-26-2008, 09:48 AM
#8
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Joined APC: Dec 2007
Position: DC-9 FO
Posts: 15
Originally Posted by flyinboxes
ABX's failure to accept the 7.75 offer has played a huge hand in this. That offer, was in fact, at the request of DHL. They wanted one airline and would now allow John Dasburg the opportuntiy to gain what he wanted, all DHL flying. Had ABXA not dismissed this offer, the landscape would be much different today. The CHI deal was a huge roadblock that neither Dasburg or DHL were privy to until after the fact. This was a crushing blow to the survival of both ABXA and Astar. DHL management was extremely irritated by the ABXA/CHI deal, so much so that they called 93 million dollars in debt due to them by ABXA. This resulted in a dispute, arbitration, and eventually(in the future) a pay back of said debt by ABXA. They were quite frankly so disgusted with ABXA, they were willing to literally put them into Bankruptcy( which is likely now anyway). Now the wheels were set in motion to seek alternative options, FedEX and UPS. And so, you get what you see before you today. Astar caught in the crossfire and both airlines headed for non-existence.
Like I said, there are lots of opinions about the effects of the buyout/rejection episode. I'm not defending ABX management's actions, but it does seem likely that the CHI deal was in the works before the Astar buyout attempt. In some ways, this may have been a matter of bad timing. Many of us at ABX were surprised when Astar (and by extension, DHL) never came back with a counter offer, but simply walked away.
07-26-2008, 10:58 AM
#10
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Joined APC: Dec 2007
Position: DC-9 FO
Posts: 15
Originally Posted by hvydriver
I suppose so DD, but Joe didn't leave the door open for that. Doesn't matter anymore anyway.
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