what are the critical issues to the different stakeholders? what do the different stakeholders have at stake?

CASE ANALYSIS These thro pac hu f economy. From 3 to 300 DHL: CLOSING OPERATIONS IN THE UNITED STATES Manfred Harnischfeger, executive vice president for shipping in the United States would cease to corporate communications at DHL, sat at a table in This could mean layoffs of a massive proport the press room of Deutsche Post World Net and yet another heavy blow to the struggling US, (DPWN) as he introduced Frank Appel (CEO DPWN), John Mullen (CEO DHL Express), and John Allen (CFO DPWN). The date was November 10, 2008, and from the mood in the room and the In 1969, Adrian Dalsey, Larry Hillblom, and looks on the faces of the company's top executives, Robert Lynn combined their last names to form there was some big news to be announced. Without the document shipping company called DHL, Serv. hesitation, Mr. Appel stepped up to the podium and ing as the company's sole employees. The com- shared with the world the decisions made at the pany's first big achievement was personally directors' meeting earlier that day. shipping papers by airplane from San Francisco After running though a quick background of the to Honolulu. After gaining quick success in the scope of the decisions about to be announced, Mr. local market, DHL began expanding operations Appel spoke of the fate of DHL: "Our activities in worldwide. the United States will now be limited to our cross- In its first five years of existence, DHL provided border business. We will hence withdraw from all service throughout the United States and the Far domestic activities in the air and on the ground." East (including Japan, Hong Kong, Singapore, and With this statement, the CEO disrupted the lives of Australia). By this time, DHL had also set up an some 13,000 DHL employees in the United States. office in London. By 1974, the company had As of January 30, 2009, all domestic ground and air expanded from one office with 3 employees to a 7 3,052 customers The expansion of DHL why he end of the decade, DHL was pasion of the SERVICE srca w all of the word nie the DHL also expanded the scope of its dext, but in 1979, the company ban For the first ten years, DHL Woly whipping the world to service sro Scope of Services Tema wwwhich have a Yorwarding Supply Chain In Son Global Man DHL Express DHL Express the leading provider one national road and bad cred express services for becomes The division works with the world's most part network, covering more than 220contender Expanded Business through Global Partnerships pany needs to stay ahead of the game and main In order to become a successful business.com Pain its competitive advantage. The first ten years of the company's life were so successful that in world leader in international shipping in the hub alone. emerging market the America, Asia Pacific DHL Global Forwarding. Freight the years to follow DHL was able to become the This division comprises international in and on freight as well as European overland transporto carly 1980s, distribution hubs were established services. DHL Global Forwarding them tional market leader in the stand ocean fight These hubs allowed for a faster flow of packages business. DML Freight is one of the largest recht forwarders in the European overlandsport packages were handled per night in the Brussels business. This business unit stands for Recible, ind vidualized solution national and international full In keeping ahead of the competition, DHL container-load and less than-contained services formed a joint venture with the People's Republic via road, rail, or intermodal transportation. In add tion, the comprehensive castoms brokerage services of China in 1986, becoming the first express ship- ensure smooth cross-border shipments. ping company active in China. Along with this joint venture, DHL also began partnering with global air- DHL Supply Chain, Corporate Information lines in order to speed the shipping process for its Solutions customers. Along with its own airline system, part- nerships with Lufthansa and Japan Airlines This division comprises contract logistics Services expanded reach and speed throughout the DHL and Corporate Information Solutions (Williams Lea). Both business units focus on tailor-made cus- tomer solutions. The business unit Supply Chain provides warehousing and warehouse transporta tion services as well as solutions along the entire DHL's success attracted the attention of many supply chain for customers from various sectors of investors. In 1998, the German company Deutsche industry, including the key automotive, life sciences, technology, fast-moving consumer goods, retail, Post (Bonn, Germany) became a shareholder in and fashion sectors. The subsidiary Williams Lea DHL. Deutsche Post had its origins with Deutsche is the heart of the business unit Corporate Informa tion Solutions, which gathers, digitalizes, prints, back to 1924. Through the German postal reforms stores, sorts, addresses, packages, dispatches, and of 1989 and 1995, Deutsche Post became its own archives documents of all types. Williams Lea in System. German Takeover Reichspost, an independent mail service that dates also handles electronic invoicing and marketin entity" and in 2002, became the major shareholder in DHL. By the end of the year, a 100 percent share. holding was complete. services. 17 14 DHL Global Mail DHL Global Mail provides mail and commun cation services with direct connections to more than 200 countries around the world as well as offering integrated solutions for corporate mem laid park communications." be w ne Employees As of 2007 DHL Express Worldwide had more than 124.000 employees in more than 220 countries and territories. DHL Logistics Worldwide, which ply Chain, and DHL Freight, had more than 162,500 employees DHL Global Forwarding operated in the most countries in the DHL Logistics Worldwide group (150 countries)." includes DHL Global Forwarding. DHL Exel Sup border shipment drop off. serve their international expres business charges will reduce DHL . operating costs by over NO percent to network pre-closure capacity was 1.2 Hon to under $1 billion.. DIS USE ments per day. By shifting Team less than 100.000 shipments per day focus, DHL'S U.S. Express at network will be able to ship their packages that closure, DHL Express's cross-border shipped through dropboxes and drop-ok different logistical systems. Packages can or they can be shipped through DHL Shipping Centers, which are partneri made with other shipping companies och Hoxes, Etc. Lastly, a limited number of facilities will remain open to be used to The operations at the DHL U.S. Exprew bution hub in Wilmington, Ohio, ma have been greatly reduced. In May 2008, which operates the Wilmington hub for DL. 10,000 employees globally, including 7380 Wilmington. ABX now employs 4,200 including 3,500 in Wilmington, John Gaber, you that he anticipated more layoffs in the next days as DHL changed the scope of its in operation, Additionally, hubs in Riverside, fornia, and Allentown, Pennsylvania, and it sorting centers across the United States are expect to close. All other DHL business units ww tinue operations in the United States. These but units include DHL Global Forwarding, DELE Supply Chain, and DHL Global Mail. These bo Operating Assets As of 2007 DHL Express Worldwide operated 36 habs, 4,700 bases, 72,000 vehicles, and 350 aircraft worldwide. It is also utilized 900 Packstations, all of which were located in Germany 20 of ABX Air Inc., said on 26, Express and Logistics Financials In 2007, the Express segment of Deutsche Post World Net posted 13,874 million of revenue with a loss of 174 million of earnings before interest and taxes (EBIT) for the year. Revenue was up from 2006 (13,463 of revenue), but EBIT was down from the 2006 total of 288 million. The Logistics segment reported 25,739 million of reve nue in 2007, which was up 5.5 percent from 24,405 million in 2006. Additionally, EBIT increased from 751 million in 2006 to 957 in 2007, which was a 27.5 percent increase. .22 ness units employ more than 25,000 people in the United States. Impact on United States Since the November 10, 2008, announcement of DHL Express domestic-only services closing opera- tions on January 30, 2009, DHL U.S. Express has closed all eighteen of its U.S.ground hubs. Its num- ber of U.S. stations has been reduced from 412 to 103. In conjunction, 9,500 DHL Express jobs have een cut, in addition to the 5,400 jobs that had been iminated since January 2008. DHL U.S. Express Hans to retain between 3,000 and 4,000 employees Local Impact "This is a catastrophic event for the entire region said David L. Raizk, the mayor of Wilmington Ohio, a city of about 12,000 citizens located Clinton County. Since 1980 Airborne Express been a major employer for citizens of Wilmin and the surrounding area. Airborne Express lished Wilmington as a hub in 1980 by movinu the abandoned Air Force base and providing sands of jobs to the area. Locals refer to the the "air park." And, the mayor of Wilming fond memories wa stated that one in three households have a family Taid off workers have been working for the member who was comployed there. Many of the park for years and look back at the time the in the United States with UPS and Featx, DHL In order to grow it U.S. prevence and compete Nica's director of CT Comunicat bought Airborne Express in 2003. This mer never able to get the U.S. Presence they anticipated less than smooth tradition and DHL W and hoped for. In conjunction with the economic downturn and resulting general decline in the ship ping business, DHL, was losing $6 million a day the United States, or over $1 billion for the year in Corporate Communication at DHL As see segment of large, wanna, est company, while levels of cor Porte conto di una mane Jonathan Baker and vice president of corporate comunication and public in Michele Nadeem are the most local to the we w hand. Ons within the corporation who manage corporate manication are Chrutina Koh, went vice presiden of communication and sustainably for Global Express, and Profesor Manfred Manincie Bet, Executive vice president for corporate Comm nication for Deutsche Post AG 2008.10 Clinton County officials expect an approximate loss of $423 million in tax revenue from the park closure. Additionally, US Senator Sherrod Brown of Ohio believes that Wilmington and the surrounding area could lose three or for indirect jobs per every direct job lost at the sit park Mayor Raizk has said that 20 percent of the region's business is dependent upon the hub 12 Federal assistance has come to Wilmington and eral grant in the amount of $3.87 billion. This grant the surrounding communities in the form of a fed is to help with job training for those who have lost their jobs at the DHL facility in Wilmington, DHL Discussion Questions Retrospective Questions 1. What are the critical sues in this case? What issues are most critica! 2. Who are the stakeholders! Which stake holdiers have been most affected and have the potential to be the most affected? What are the critical issues to the different stake holders? What do the different stakeholders have at stake? 3. Was the sequence of events and time spa has also been assisting those who have been laid off, that DHL utilized to announce the end spending $260 million on severance pay and health insurance for laid-off employees, domestic-only operations in the Unit States and the subsequent shutdown app Stories abound of families in Wilmington, priate? Should DHL have made announcement earliert Should they Ohio, and the surrounding area who are struggling to cope financially from the layoffs. A telling waited longer after the announcemer example is Angela and John Pica, who both shut down all operations! worked at the air park. Angela started working at 4. Is there any way that DHL could have poned or avoided a shutdown o the air park when she was 19 and as a supervisor had, on multiple occasions over the final few Express operations Should a co leave the market during poor ce months of operations at the air park, to escort her times? laid-off employees off the premises. John, on the other hand, may have the possibility for another Prospective Questions DHL job in another city, but the Picas can't sell 1. What does DHL need to commun their house in the current real estate market. non-U.S. customers in order ass Angela was busy looking for new jobs in anticipa- the viability of its new business tion of being laid off and applied to approximately forty jobs to no avail. When Angela was finally laid off it was especially emotional for her because she, like so many others, had worked at the air park for so long. At age 37, she had spent nearly half of her life working there. 2. How does the closure affect DH the United States? What does do in order to convince Americ to continue using DHL for shipping needs? 35 CASE ANALYSIS These thro pac hu f economy. From 3 to 300 DHL: CLOSING OPERATIONS IN THE UNITED STATES Manfred Harnischfeger, executive vice president for shipping in the United States would cease to corporate communications at DHL, sat at a table in This could mean layoffs of a massive proport the press room of Deutsche Post World Net and yet another heavy blow to the struggling US, (DPWN) as he introduced Frank Appel (CEO DPWN), John Mullen (CEO DHL Express), and John Allen (CFO DPWN). The date was November 10, 2008, and from the mood in the room and the In 1969, Adrian Dalsey, Larry Hillblom, and looks on the faces of the company's top executives, Robert Lynn combined their last names to form there was some big news to be announced. Without the document shipping company called DHL, Serv. hesitation, Mr. Appel stepped up to the podium and ing as the company's sole employees. The com- shared with the world the decisions made at the pany's first big achievement was personally directors' meeting earlier that day. shipping papers by airplane from San Francisco After running though a quick background of the to Honolulu. After gaining quick success in the scope of the decisions about to be announced, Mr. local market, DHL began expanding operations Appel spoke of the fate of DHL: "Our activities in worldwide. the United States will now be limited to our cross- In its first five years of existence, DHL provided border business. We will hence withdraw from all service throughout the United States and the Far domestic activities in the air and on the ground." East (including Japan, Hong Kong, Singapore, and With this statement, the CEO disrupted the lives of Australia). By this time, DHL had also set up an some 13,000 DHL employees in the United States. office in London. By 1974, the company had As of January 30, 2009, all domestic ground and air expanded from one office with 3 employees to a 7 3,052 customers The expansion of DHL why he end of the decade, DHL was pasion of the SERVICE srca w all of the word nie the DHL also expanded the scope of its dext, but in 1979, the company ban For the first ten years, DHL Woly whipping the world to service sro Scope of Services Tema wwwhich have a Yorwarding Supply Chain In Son Global Man DHL Express DHL Express the leading provider one national road and bad cred express services for becomes The division works with the world's most part network, covering more than 220contender Expanded Business through Global Partnerships pany needs to stay ahead of the game and main In order to become a successful business.com Pain its competitive advantage. The first ten years of the company's life were so successful that in world leader in international shipping in the hub alone. emerging market the America, Asia Pacific DHL Global Forwarding. Freight the years to follow DHL was able to become the This division comprises international in and on freight as well as European overland transporto carly 1980s, distribution hubs were established services. DHL Global Forwarding them tional market leader in the stand ocean fight These hubs allowed for a faster flow of packages business. DML Freight is one of the largest recht forwarders in the European overlandsport packages were handled per night in the Brussels business. This business unit stands for Recible, ind vidualized solution national and international full In keeping ahead of the competition, DHL container-load and less than-contained services formed a joint venture with the People's Republic via road, rail, or intermodal transportation. In add tion, the comprehensive castoms brokerage services of China in 1986, becoming the first express ship- ensure smooth cross-border shipments. ping company active in China. Along with this joint venture, DHL also began partnering with global air- DHL Supply Chain, Corporate Information lines in order to speed the shipping process for its Solutions customers. Along with its own airline system, part- nerships with Lufthansa and Japan Airlines This division comprises contract logistics Services expanded reach and speed throughout the DHL and Corporate Information Solutions (Williams Lea). Both business units focus on tailor-made cus- tomer solutions. The business unit Supply Chain provides warehousing and warehouse transporta tion services as well as solutions along the entire DHL's success attracted the attention of many supply chain for customers from various sectors of investors. In 1998, the German company Deutsche industry, including the key automotive, life sciences, technology, fast-moving consumer goods, retail, Post (Bonn, Germany) became a shareholder in and fashion sectors. The subsidiary Williams Lea DHL. Deutsche Post had its origins with Deutsche is the heart of the business unit Corporate Informa tion Solutions, which gathers, digitalizes, prints, back to 1924. Through the German postal reforms stores, sorts, addresses, packages, dispatches, and of 1989 and 1995, Deutsche Post became its own archives documents of all types. Williams Lea in System. German Takeover Reichspost, an independent mail service that dates also handles electronic invoicing and marketin entity" and in 2002, became the major shareholder in DHL. By the end of the year, a 100 percent share. holding was complete. services. 17 14 DHL Global Mail DHL Global Mail provides mail and commun cation services with direct connections to more than 200 countries around the world as well as offering integrated solutions for corporate mem laid park communications." be w ne Employees As of 2007 DHL Express Worldwide had more than 124.000 employees in more than 220 countries and territories. DHL Logistics Worldwide, which ply Chain, and DHL Freight, had more than 162,500 employees DHL Global Forwarding operated in the most countries in the DHL Logistics Worldwide group (150 countries)." includes DHL Global Forwarding. DHL Exel Sup border shipment drop off. serve their international expres business charges will reduce DHL . operating costs by over NO percent to network pre-closure capacity was 1.2 Hon to under $1 billion.. DIS USE ments per day. By shifting Team less than 100.000 shipments per day focus, DHL'S U.S. Express at network will be able to ship their packages that closure, DHL Express's cross-border shipped through dropboxes and drop-ok different logistical systems. Packages can or they can be shipped through DHL Shipping Centers, which are partneri made with other shipping companies och Hoxes, Etc. Lastly, a limited number of facilities will remain open to be used to The operations at the DHL U.S. Exprew bution hub in Wilmington, Ohio, ma have been greatly reduced. In May 2008, which operates the Wilmington hub for DL. 10,000 employees globally, including 7380 Wilmington. ABX now employs 4,200 including 3,500 in Wilmington, John Gaber, you that he anticipated more layoffs in the next days as DHL changed the scope of its in operation, Additionally, hubs in Riverside, fornia, and Allentown, Pennsylvania, and it sorting centers across the United States are expect to close. All other DHL business units ww tinue operations in the United States. These but units include DHL Global Forwarding, DELE Supply Chain, and DHL Global Mail. These bo Operating Assets As of 2007 DHL Express Worldwide operated 36 habs, 4,700 bases, 72,000 vehicles, and 350 aircraft worldwide. It is also utilized 900 Packstations, all of which were located in Germany 20 of ABX Air Inc., said on 26, Express and Logistics Financials In 2007, the Express segment of Deutsche Post World Net posted 13,874 million of revenue with a loss of 174 million of earnings before interest and taxes (EBIT) for the year. Revenue was up from 2006 (13,463 of revenue), but EBIT was down from the 2006 total of 288 million. The Logistics segment reported 25,739 million of reve nue in 2007, which was up 5.5 percent from 24,405 million in 2006. Additionally, EBIT increased from 751 million in 2006 to 957 in 2007, which was a 27.5 percent increase. .22 ness units employ more than 25,000 people in the United States. Impact on United States Since the November 10, 2008, announcement of DHL Express domestic-only services closing opera- tions on January 30, 2009, DHL U.S. Express has closed all eighteen of its U.S.ground hubs. Its num- ber of U.S. stations has been reduced from 412 to 103. In conjunction, 9,500 DHL Express jobs have een cut, in addition to the 5,400 jobs that had been iminated since January 2008. DHL U.S. Express Hans to retain between 3,000 and 4,000 employees Local Impact "This is a catastrophic event for the entire region said David L. Raizk, the mayor of Wilmington Ohio, a city of about 12,000 citizens located Clinton County. Since 1980 Airborne Express been a major employer for citizens of Wilmin and the surrounding area. Airborne Express lished Wilmington as a hub in 1980 by movinu the abandoned Air Force base and providing sands of jobs to the area. Locals refer to the the "air park." And, the mayor of Wilming fond memories wa stated that one in three households have a family Taid off workers have been working for the member who was comployed there. Many of the park for years and look back at the time the in the United States with UPS and Featx, DHL In order to grow it U.S. prevence and compete Nica's director of CT Comunicat bought Airborne Express in 2003. This mer never able to get the U.S. Presence they anticipated less than smooth tradition and DHL W and hoped for. In conjunction with the economic downturn and resulting general decline in the ship ping business, DHL, was losing $6 million a day the United States, or over $1 billion for the year in Corporate Communication at DHL As see segment of large, wanna, est company, while levels of cor Porte conto di una mane Jonathan Baker and vice president of corporate comunication and public in Michele Nadeem are the most local to the we w hand. Ons within the corporation who manage corporate manication are Chrutina Koh, went vice presiden of communication and sustainably for Global Express, and Profesor Manfred Manincie Bet, Executive vice president for corporate Comm nication for Deutsche Post AG 2008.10 Clinton County officials expect an approximate loss of $423 million in tax revenue from the park closure. Additionally, US Senator Sherrod Brown of Ohio believes that Wilmington and the surrounding area could lose three or for indirect jobs per every direct job lost at the sit park Mayor Raizk has said that 20 percent of the region's business is dependent upon the hub 12 Federal assistance has come to Wilmington and eral grant in the amount of $3.87 billion. This grant the surrounding communities in the form of a fed is to help with job training for those who have lost their jobs at the DHL facility in Wilmington, DHL Discussion Questions Retrospective Questions 1. What are the critical sues in this case? What issues are most critica! 2. Who are the stakeholders! Which stake holdiers have been most affected and have the potential to be the most affected? What are the critical issues to the different stake holders? What do the different stakeholders have at stake? 3. Was the sequence of events and time spa has also been assisting those who have been laid off, that DHL utilized to announce the end spending $260 million on severance pay and health insurance for laid-off employees, domestic-only operations in the Unit States and the subsequent shutdown app Stories abound of families in Wilmington, priate? Should DHL have made announcement earliert Should they Ohio, and the surrounding area who are struggling to cope financially from the layoffs. A telling waited longer after the announcemer example is Angela and John Pica, who both shut down all operations! worked at the air park. Angela started working at 4. Is there any way that DHL could have poned or avoided a shutdown o the air park when she was 19 and as a supervisor had, on multiple occasions over the final few Express operations Should a co leave the market during poor ce months of operations at the air park, to escort her times? laid-off employees off the premises. John, on the other hand, may have the possibility for another Prospective Questions DHL job in another city, but the Picas can't sell 1. What does DHL need to commun their house in the current real estate market. non-U.S. customers in order ass Angela was busy looking for new jobs in anticipa- the viability of its new business tion of being laid off and applied to approximately forty jobs to no avail. When Angela was finally laid off it was especially emotional for her because she, like so many others, had worked at the air park for so long. At age 37, she had spent nearly half of her life working there. 2. How does the closure affect DH the United States? What does do in order to convince Americ to continue using DHL for shipping needs? 35