Supply Chain Cartel In Action

Sometimes we get lucky and today is one of those times.  A story will be hitting the News today regarding John McCain and his campaign manager, Rick Davis and the role they played in the merger of DHL and Airborne Express.   The Cleveland Plain Dealer has an article explaining the back story on the merger.

McCain had role in original Wilmington DHL deal

DHL is a company that has been around for a long time and in this writer's experience, they were used by business and government primarily to pick up and deliver small items documents - letters, contracts - anything that needed to be delivered in a hurry.  Airborne Express was primarily involved in the shipment of freight.    No doubt the pitch for the merger was that the combined lines of business of each company would allow the company to compete with FEDEX and UPS.  

Initially, the merger between DHL and Airborne, added jobs to the Wilmington, Ohio area because it was the hub for DHL.  The reason for the increase obviously was because of the extra work involved in merging the administrative functions and operations of the two companies.  But now Wilmington faces losing the majority of those jobs.  The reason for the loss is also the reason I'm writing this commentary:


"In a private meeting Thursday, Wilmington residents will ask McCain for help in stopping DHL's proposal to quit using the airport as a hub, which could cost more than 8,000 jobs. DHL says that it wants to stay in the freight business but that it can stem financial losses if it can put its packages aboard the planes of a rival - United Parcel Service - before delivering them in DHL trucks. UPS flies out of Louisville, Ky., so the proposed change would render the Wilmington airport unnecessary."

What you see is the making of a shell corporation and the growth of a cartel.  DHL is effectively transferring their share of the Wilmington market to what should be a rival.  DHL will receive a commission on each package that UPS ships out of Wilmington basically for the use of their brand name in the local market.  If unchecked, the same thing would happen again and again in each market that DHL has business until they are no longer a business - but simply a brand name - a label with no actual business behind it. 

McCain is now calling for a probe of DHL:

"The Republican presidential candidate called on the Justice Department to begin an antitrust investigation into DHL's plans to puts its packages aboard the planes of a rival, United Parcel Service, before delivering them in DHL trucks. Because UPS flies out of Louisville, the plans call for shutting the DHL shipping hub here that uses the Wilmington airport and eliminating up to 10,000 jobs."

Last year, the same thing was revealed when it was discovered that Mattel Toys produced in China had lead paint that exceeded allowable limits by as much as 180 times in some cases.  The media naturally focused on the lead in the paint and the effects on children.  They gave scant coverage to the fact that Mattel is no longer a manufacturer of toys.  They are simply a brand name - a shell corporation. 

Eventually, All Things Are Explained

Back around 2003, when I was just beginning to investigate the issue of outsourcing, Treasury Secretary John Snow, Labor Secretary Chairman Chao, and Commerce Secretary Don Evans went on a bus tour to call attention to our "booming economy".  I watched it live and then when it was played again on rerun, I wrote a commentary called, "Three Stooges Rerun on TV Last Night".  The bus tour was an obvious and disgusting propaganda campaign.  They chose to go the Harley-Davidson plant in Wisconsin.  Harley is a uniquely American company that can't be replaced with Chinese imports.  Anyway, at one point in the tour, they were doing a Q & A with Harley suppliers and employees.  The suppliers made comments and asked questions that I didn't fully understand at the time - but now are completely understandable with the added information about cross-corporation supply chains and cartel formations:

To Snow - This question was asked by another Harley supplier.  Large OEM (original equipment manufacturers) are pressuring the small ones to move offshore (to China).  He told Snow, "we need fair trade - not free trade".  Snow's response was rather confusing - but he said that China is using the currency that they have from the trade surplus (about $130 billion dollars a year) to buy US securities rather than on domestic spending for the people of China.  This sounds to me like China has basically bought our large manufacturers and they are trying to either get the small manufacturers to move voluntarily or they will put them out of business.  I could be wrong on that, that is just my understanding - but it does seem to fit what is occurring.


Next question - This question was asked by another Harley supplier.  I think that Don Evans responded to it, but I I'm not sure.  The supplier states that we have a $500 billion trade deficit, $130 billion of that to China.  Our exports to China are only raw materials.  China does not buy any 'value added' goods - meaning manufactured goods.  How is this helping jobs and growth?  Good question I'd say. The answer that I have in my notes is that the tax cut will stimulate the economy - when people spend, it ripples through the economy.  Hmmm… in my simplistic little way of thinking, I don't see any new jobs there. I see an exacerbation of the problem, but no new jobs.  Don Evans wrapped up this discussion by saying, “the President is 'very concerned about jobs'.  He wants to make sure that everybody that wants a job can have a job”.  I had to leave the room at this point due to overwhelming nausea.

It was apparent then, and it is apparent now that the U.S. economy is being gutted like a fish.  Corporations are still in this country as brand names, but all they are doing is selling into this market and the result is obviously both personal and national debt because we have no way to balance the trade. This is giving the large foreign manufacturers with the supply chain cartels the power to not only buy up U.S. businesses, but also the money to buy Congress. 

Shell corporations operating in America are really foreign corporations yet they can lobby Congress and donate to the campaigns of the members of Congress.  The shell corporation gives the members of Congress the cover for the betrayal of the American people.  So just know that whenever you hear a member of Congress talking about the need to import foreign labor because of "shortages", what you are hearing is a propaganda campaign to accede to the desires of the foreign corporations to complete the job of gutting America and the American people.  


Vicky Davis,
August 8, 2008

Related Commentaries: Taking Back Our Country
                                   InPut/OutPut Analysis and B2B Supply Chain Management
                                   Global Supply Chain Management
                                   Outsourcing Overhead


[Note: And btw, it's not just corporations making requests for imported foreign labor.  The most recent proposal for the import of foreign workers was by the committee that did the Quadrennial Defense Review for the military.  Their suggestion was that because of "shortages", we should import foreign nurses.  At the same time, they suggested lowering the standards for nurses to allow the VA to hire nurses with 2-years of vocational training as a replacement for RN's with bachelor's degrees.  This is in fact, a race to the bottom as Alan Tonelson described in his book,  "Race to the Bottom". ]