Deutsche Post AG is poised to announce thousands of job cuts at its
DHL Express operations in the United States, possibly as early as
Monday, a person familiar with the decision told The Associated Press.
The
person said on condition of anonymity Sunday that the Bonn-based
express mail and logistics company was poised to announce that the
cutbacks at its DHL operations in the United States would affect
between 12,000 and 13,000 jobs. The person was not authorized to speak
to the media.
The cuts are part of a wider plan to curtail
operations in the U.S., including ground deliveries, and would likely
affect drivers, shipping clerks and warehouse workers. The express unit
employs some 18,000 workers.
The expected move will not
signal Deutsche Post's exit from the U.S., where it faces strident
competition from UPS Inc. and FedEx Corp.
The person told
the AP that the company's U.S. logistics unit, which employs some
25,000 people, would not be affected and some staff at DHL would remain.
"We're not exiting the U.S. entirely," the person said.
Deutsche Post itself did not comment Sunday.
Deutsche
Post said earlier this year that competition, rising fuel prices and
other factors have put its U.S. DHL operations on track to lose 1.3
billion euros ($1.6 billion) by the end of the year.
In May,
Deutsche Post's chief executive Frank Appel announced a radical
restructuring of the U.S. operations, which have posted recurrent
losses. At the time, Appel said the company's U.S. freight flights were
to be taken over by rival UPS Inc.
On Friday, the U.S.
unions that represent some DHL employees and pilots that currently
provide air service for some of DHL's shipments said they had not been
informed of any forthcoming changes. But DHL scheduled a conference
call with reporters for Monday afternoon to discuss news that was to be
announced earlier in the day and answer questions about DHL's U.S.
Express business.
DHL spokesman Jonathan Baker declined to
provide details Friday on what will be announced Monday. As to the
talks with UPS, he said, "We are continuing to talk with UPS. The talks
are constructive. We expect to finalize our negotiations by year-end."
A
person familiar with UPS' talks with DHL said Friday that if DHL makes
significant cuts to its ground operations in the U.S., it wouldn't
necessarily affect UPS and DHL reaching a deal since the talks solely
involve air delivery of packages, not ground delivery.
The person spoke on condition of anonymity because of the sensitive nature of the talks.
UPS
and DHL proposed a collaboration in May in which UPS would carry some
air packages for DHL. The deal, if completed, could last up to 10 years
and infuse up to $1 billion in annual revenue for UPS.
UPS
has said the contract will mostly involve the transport of DHL packages
between airports in North America -- not the pickup or delivery of DHL
packages to customers. UPS has said the deal is similar to its existing
agreement with the U.S. Postal Service.
Thousands of jobs
could be lost at an air cargo facility in Wilmington, Ohio, if the
agreement between DHL and UPS is consummated.
Deutsche Post
slashed its earnings forecasts for both 2008 and 2009 late last month,
saying it expects pretax profit to fall 8 percent in the third quarter
"as the global economic environment deteriorated markedly."
Deutsche
Post is scheduled to release its third-quarter results on Monday,
followed by its nine-month figures on Tuesday, according to its Web
site.
The source told AP that discussions with UPS on the
business were ongoing, but because of the expected job cuts, the talks
would find themselves conducted on a new basis. Deutsche Post, in the
interim, is expected to move its remaining freight in the U.S. via road
and highway transit, while it could close some of its operations in
many cities altogether, the source said.
It was unknown how many jobs of contracting companies working with DHL in the U.S. could be affected.
The
source said that some U.S. DHL employees would remain working with
American companies' shipments to and from Europe and Asia.
Shares of Deutsche Post were up 5.7 percent to close at 9.36 euros ($11.90) on Friday in Frankfurt.
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AP
Business Writers George Frey in Frankfurt, Germany, Harry R. Weber in
Atlanta and Samantha Bomkamp in New York contributed to this report.
