Turner wants to help DHL dodge taxes

When is a gift not a gift? When it helps a foreign investor who has already received millions in tax breaks and subsidies over the years- avoid paying more taxes after it shafts its American workforce.

In yet another bit of “political logic” Mike Turner wants DHL to give “the community” back a white elephant that the government originally built, and abandoned- much the same way as DHL is about to do (the DHL facility is the former Rickenbacker Air Force Base):

Turner: DHL would consider public donation of Wilmington property
The cargo delivery company DHL has said it would consider donating its entire Wilmington freight hub operation to the community if the company concludes a business deal with United Parcel Service that could wipe out thousands of Wilmington jobs, U.S. Rep. Mike Turner and a state official said Monday, June 30.

Turner, R-Centerville, spoke after meeting privately with employees of ABX Air, the DHL-employed cargo airline that could be replaced by DHL’s proposed contract to have UPS handle all of DHL’s U.S. air cargo transport. DHL said it expects to negotiate the deal within three months.

“I think DHL is making a terrible mistake,” Turner said of the proposal.

Kevin Carver, an Ohio Department of Development regional official based in Dayton, confirmed that DHL has said in conversations with top state officials that it would consider publicly donating the 2,200-acre Wilmington property if the UPS deal goes through, in order to help Ohio find new use for the operation. The property includes two runways, control tower and dozens of buildings, including more than one million square feet of cargo sorting space. DHL’s two contractor airlines at Wilmington, ABX Air and ASTAR Air Cargo, fly DHL overnight delivery packages to cities across the United States each night.

I know that some of my astute readers will say I suggested the same thing for the GM plant in Moraine not long ago and that I seem like a hypocrite- I’ll explain.

While both companies are getting hammered by fuel prices, the GM plant has alternative uses: building smaller cars, rail cars, refrigerators, airparks, unless you want to try to bring in one of the private companies trying to run a space launch business, aren’t really useful these days as airports.

Dayton lost Emery not long ago to UPS, and for Wilmington to lose DHL is pretty much the price we pay for not investing in high speed rail-and subsidizing businesses to locate in the middle of nowhere, far away from where employees live. DHL used to run a bus to bring employees from Dayton to Wilmington daily- if that’s any indication of failed economic planning.

For right now, it’s time to ask DHL back for all the tax breaks they accepted, and to keep charging them for the property taxes that the facility should be paying. To take it off the tax rolls is just another kick in the gut to an already reeling Wilmington.

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19 Responses

  1. Dad July 1, 2008 / 4:55 pm
    What irks me is that DHL is very secretive about who and what it is. It belongs to the GERMAN post office, but never lets on to that fact.

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  2. Jeff July 1, 2008 / 6:01 pm
    Die Post, no longer Deutsche Bundespost, as it’s been privatized (and unlike the USPS has competing mail delivery companys). Yet they kept the old yellow color of the Bundepost, which is why the DHL trucks were repainted yellow after the Die Post took over the company (which was originally American).

    In any case good news for Louisville as UPS has its main air-frieght hub and maintenance ops there. UPS has become a player in the local Louisville economy as a number of companys have located there to be close to the hub, plus a big boom in warehousing and container depots.

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  3. Greg Hunter July 1, 2008 / 9:06 pm
    Ohio should run a command economy and try to control the remaining assets at the State level. In other words we need a slick lawyer to file an injunction against the equipment, in Moraine (lines) and Wilmington (planes, sorting lines) (not the property, as it has no value without the equipment). Once we have the equipment hostage we, as a community, can decide to keep it or sell it in order to pay back the tax bill.

    Where is the outrage in this country??

    I could think of plenty of businesses to benefit the community with planes, manufacturing lines and motivated employees.

    Maybe there is too much Prozac in the public water supply?

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  4. David Esrati July 1, 2008 / 10:09 pm

    Jeff-
    Many companies had set up shop in Wilmington for distribution. Service depots for laptops, distribution for critical delivery, and warehouses for places like Frys/Outpost, PC Connection etc.
    It’s not just DHL that was making the Wilmington economy fly.

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  5. Jeff July 2, 2008 / 5:30 pm
    “Many companies had set up shop in Wilmington for distribution. Service depots for laptops, distribution for critical delivery, and warehouses for places like Frys/Outpost, PC Connection etc.”

    Yep, and they are going to relocate to Louisville, which is why I said this merger is a good thing for Louisville.

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  6. Anthony July 9, 2008 / 7:08 pm
    To encourage Foreign Direct Investment in Ohio we have to offer businesses something better than they can get elsewhere.

    Tax breaks are one way of doing this.

    Appealing to an ignorant populations emotional feelings on the topic does not change the economics of the situation.

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  7. David Esrati July 9, 2008 / 7:26 pm

    Anthony- tax breaks=corporate welfare.
    As to encouraging foreign direct investment- we’d need to re-write NAFTA.

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  8. Anthony July 9, 2008 / 11:57 pm
    I’m not sure why you think tax breaks are “corporate welfare” Corporations shouldn’t be taxed in the first place. “Tax breaks” are not payments made to companies, they are a way to alleviate the burden of taxes so that the company has an incentive to do business in your municipality.

    Ohio has one of the most difficult tax systems for businesses to operate in. If you want companies to operate in your municipality, then you need to provide them with a better incentive than competing municipalities. (Including those in other countries)

    We live in a global economy and compete in that global economy in every aspect of life and business.

    I assume your NAFTA comment was directed at the FDI that Canada and Mexico have experienced. Mostly from US companies. The US has experienced FDI from many other countries as well. However states that have draconian tax policies such as CA, NY, and Ohio are not seeing the investment that other states are. Instead we see the population of our cities declining at an astonishing rate.

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  9. David Esrati July 10, 2008 / 10:56 am

    Tax breaks make the playing field uneven- and are typically only given out to large companies. This isn’t very “all men are created equal” is it?
    Taxes aren’t supposed to be a burden- they are supposed to pay for services that we shouldn’t be able to get cheaper as individuals-
    and to “buy us civilization”- yet, why we give breaks to GM- who then pays its executives millions to run the company into the ground is insanity run amok.

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  10. Anthony July 10, 2008 / 3:30 pm
    I agree that tax breaks can unfairly impact smaller companies who don’t get them. The solution to this is to eliminate corporate taxes all together. Then you have a level playing field.

    So you are saying that the Tax breaks should never have been given to GM?

    That they should have built their manufacturing plants somewhere else?

    and that all of the people in our area who have ever worked for GM would have been better off if they never had worked there?

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  11. David Esrati July 10, 2008 / 4:07 pm

    It was a refrigerator plant before it got converted to make trucks.
    Are you saying that the only reason a company should locate here is because we give better tax breaks?
    There should be no tax breaks, except possibly ones to incentivize good behavior like walk to work-
    If we eliminated corporate taxes we would have a very poor government.
    Government entities fighting by giving away our tax dollars is always a losing battle for all involved.

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  12. Anthony July 10, 2008 / 4:28 pm
    Can you give other reasons a company should locate here and pay the tax instead of moving somewhere where they get a tax break?

    If we eliminated corporate taxes government revenues would soar due to the influx of businesses who would hire employees who all pay tax.

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  13. David Esrati July 10, 2008 / 4:41 pm

    Anthony- that’s exactly the point, we shouldn’t be allowing any tax breaks for “location”- See the NCR HQ move on this site. NY paid NCR 1.5 million to steal our highest earning taxpayers.
    Is that right?
    Eliminating corporate taxes is a whole other discussion.

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  14. Anthony July 10, 2008 / 4:57 pm
    While it might not feel “right”. We have to remove the emotion from the mathematical equation.

    Paying companies to move to our area is the world that we live in.

    We all have to weigh the pros and cons of such a business decsion. Obviously New York thought that paying the $1.5M was worth it.

    Do we want companies to move to our area to employe our population? If we do then we have to figure out how to encourage them to come here instead of go somewhere else.

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  15. David Esrati July 10, 2008 / 5:55 pm

    Companies should want to locate here because it’s a great place to live, with great schools, safe neighborhoods, a great arts scene, a relaxed atmosphere, inexpensive housing, a reliable workforce- not because you and I contribute our hard earned dollars to some slush fund for rich CEO’s.

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  16. Michael Dudley July 10, 2008 / 8:00 pm
    According to the web site it is still Deutsche Post. http://www.deutschepost.de

    The actual postal service internally may have been renamed, but the global company is Deutsche Post Worldnet. That’s DHL’s parent.

    Interestingly it looks like the DHL brand is the surviving brand. There is an innovation center just outside Bonn (DPWN HQ) near Colgne that is the Innovation Center. It has DHL branding all over it…….

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  17. Anthony July 10, 2008 / 11:16 pm
    Companies move to a particular location for one reason, profits. As a shareholder I require that the companies I own use that as their primary criteria.

    As a shareholder of a company, I pay the corporate officers including the CEO those exhorbirant salaries and “slush funds” so that they can provide me with the highest rate of return on my investment.

    If corporate officers start using other criteria for making decisions on where to locate the company, and sacrifice my return on my investment, then I would not be happy with them and I would elect someone else to serve on the board, or I would sell my investment to someone else.

    This is the way business decisions are made. They don’t include what is fair, or nice, or what the arts scene is.

    Business decisions include maximizing profits so that shareholders will pay large salaries to corporate officers.

    Thats a good thing. It makes my bank account grow.

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