DHL cuts jobs in USA, hires chain-gangs in the UK

Date: Wednesday, November 12, 2008 2:54 AM

<<<<< JOB DESTRUCTION NEWSLETTER No. 1937 -- 11/12/2008 >>>>>

Deutsche Post's DHL, a German company, announced that it is going to cut 9,500
jobs in the United States. That's on top of another 5,400 job cuts it already
announced.

Meanwhile, in Wales and England, DHL is hiring 500 prisoners from Her
Majesty's (HM) Prison Service. To learn more about this award winning employer
go to this website:

http://www.hmprisonservice.gov.uk/

Be sure to take the virtual tour of the prison:

http://www.hmprisonservice.gov.uk/prisoninformation/howaprisonoperates/

To learn more about Her Majesty's Prison Service, go here:

http://en.wikipedia.org/wiki/Her_Majesty's_Prison_Service

Prison labor is big business in the U.K. Seven of the UK's ten prisons are run
by private companies and many of them run labor camps. An example, a company
called the GEO Group uses detained immigrants in the Campsfield House for
cheap labor. GEO Group is a worldwide prison outsourcing operation that
specializes in detaining illegal immigrants. They also run a part of
Guantanamo Bay base in Cuba.

To find out more about GEO go to these webpages:

http://www.corporatewatch.org/?lid=3133
Migrants exploited for cheap labour... even in prison

http://www.thegeogroupinc.com/

HM Prison Service is an award winner! Recently they won an excellence award
for "Best New Shared Services Organisation" on May 19th-22nd 2008 at
Barcelona, Spain (see link below). The term "Shared Services" was new to me so
I went to the Shared Services & Outsourcing Network (SSON) website to figure
out what it meant. Of course the name sort of gives it away, but here is their
description of the term:

http://www.ssonetwork.com/topic_detail.aspx?id=3154&ekfrm=6

The shared services model is a collaborative strategy in which a
subset of existing business functions are concentrated into a new,
semi-autonomous business unit that has a management structure
designed to promote efficiency, value-generation, cost savings,
and improved service for the internal customers of the parent
corporation.

That description may sound somewhat confusing, but fortunately they clarify
things later in the page:

What is Shared Services?

* Shared services creates a dynamic internal marketplace for
services
* Shared services requires an understanding that the role is
to provide a service at cost, quality and timeliness that
is competitive with alternatives, to a clearly defined group
of clients
* Shared services is not the same as "centralized functions"
-- the difference is the principle of the marketplace

Uhhhhhhhh! That makes perfect sense, NOT! I'll give you my best shot at what
"Shared Services" is: it's the new Eurospeak buzzword for "outsourcing". As
usual, Wikipedia is right on top of this trend:

http://en.wikipedia.org/wiki/Shared_services

The Private Sector has been moving towards Shared Services since
the beginning of the 1980 s. Large organizations such as the BBC,
BP, Bristol Myers Squibb, Ford, GE, HP, Pfizer, Rolls-Royce,
and SAP are operating them with great success.

Remember my last newsletter about Pfizer?

http://biz.yahoo.com/ap/081110/eu_germany_deutsche_post.html
DHL to cut 9,500 jobs and close US service centers

http://www.corporatewatch.org/?lid=3156
Packaged by HM Prison Service

http://www.ssonetwork.com/awards_previous.aspx?id=600
The 2008 Shared Services Excellence Awards were presented at Shared Services
Week on May 19th-22nd 2008 at the Melia Sitges, Barcelona, Spain.

+++++++++++++++++++++++++++++++++++++++++++++++++++

http://biz.yahoo.com/ap/081110/eu_germany_deutsche_post.html

DHL to cut 9,500 jobs and close US service centers Monday November 10, 2:27 pm
ET By Harry R. Weber and Samantha Bomkamp, AP Business Writers DHL to cut
9,500 jobs and close US service centers, Deutsche Post announces

ATLANTA (AP) -- In a move that could greatly scale back a possible venture
between UPS and Deutsche Post's DHL, the German company said Monday it will
significantly reduce its air and ground operations in the U.S. and cut 9,500
jobs within the country.
The DHL-UPS deal was expected to last up to 10 years and infuse Atlanta-based
UPS with up to $1 billion in annual revenue, if completed as first proposed in
May.

UPS, the world's largest shipping carrier, has said the contract with DHL,
which it has been working to finalize, would mostly involve the transport of
DHL packages between airports in North America -- not the pickup or delivery
of DHL packages to customers.

If DHL made significant cuts to its ground operations in the U.S., it wouldn't
necessarily affect UPS and DHL reaching a deal since their talks have solely
involved air delivery of packages, not ground delivery. But Deutsche Post's
announcement Monday went well beyond the elimination of ground products within
the U.S. Deutsche Post said it will discontinue U.S.
domestic-only air and ground products on Jan. 30 to focus entirely on its
international offering.

Deutsche Post, which cited heavy losses and fierce competition for its
decision to curtail U.S. operations, noted it is not pulling out of the market
entirely. It said its international shipping services to and from the U.S.
would continue.

DHL competes with rivals UPS and Memphis, Tenn.-based FedEx Corp.

UPS spokesman Norman Black said his company would continue to work on an air-
haul vendor contract with DHL. But, he added, "Today's announcement by DHL
certainly could affect the size and scope of that contract. We'll go back into
talks and see what develops."

Black cited the part of the Deutsche Post announcement in which it said it
plans to stop offering air service between U.S. cities.

"By stopping that service, the only thing that's left is moving international
packages once they get to the U.S. border," Black said.
"That's a dramatically lower amount of volume than what they were originally
talking to us about."

Currently, the company's total air volume for shipments from points between
U.S. and international destinations and between points within the U.S. is
about 1.2 million shipments a day. Deutsche Post said that figure will drop to
about 100,000 shipments a day after the changes go through. The air volume
figures do not include packages that do not start or end in the U.S.

Avondale Partners analyst Donald Broughton noted that while DHL's announcement
does not directly kill the deal with UPS, he thinks termination will be an end
result.

"I think a lot of observers, myself included, knew the largest value of that
contract (between DHL and UPS) was going to be on the first day, and it was
going to dwindle very quickly thereafter," Broughton said. "This just
accelerates that process."

Edward Jones analyst Dan Ortwerth said Deutsche Post's decision changes the
scope of a potential DHL-UPS deal, but doesn't necessarily kill it.

"I don't see any motivation for UPS to outright walk away," Ortwerth said.
"UPS is in the stronger position, and I'm sure at the bargaining table they
will protect their own interests plenty well."

Broughton said that while both UPS and FedEx stand to gain as DHL pulls back
its U.S. service offering, FedEx will likely have the upper hand in gaining a
broader share of the market in both domestic ground and air express shipments.

The analyst notes that FedEx has a ground network roughly one-third the size
of UPS, which will allow it to grow business incrementally compared to its
chief rival if both companies share the new business equally.

And FedEx's extensive air network will allow it to more easily expand and take
more business, he said.

DHL's air and ground operations produced $3.4 billion in revenue last year.

"This a nice piece of the market for UPS and FedEx to play jump ball with,"
he said. "Overall this environment is very challenging, and this has been a
positive in a sea of negative."

But although there are major near-term advantages, Broughton said the biggest
benefits might be seen in the long run.

"The real upside might be two, three or four years down the road, when the
economy is feeling better and FedEx and UPS are able to raise prices, because
they won't have another competitor nipping at their heels," he said.

DHL's current vendors for air shipments within the U.S., ABX Air and ASTAR Air
Cargo, have been opposed to the DHL-UPS deal, saying it would cost thousands
of jobs if it went through. Now, given the extent of Deutsche Post's
announcement, many jobs could be lost at the two companies even if the DHL-UPS
deal isn't completed.

ABX spokeswoman Beth Huber said the decision will affect ABX' work force and
operations. Just how much of an impact has yet to be determined, she said. ABX
has about 7,000 employees.

A woman who answered the phone at ASTAR's offices declined to comment or take
a message for a spokesperson, referring calls to DHL instead.

FedEx said in a statement that it welcomes the opportunity to pick up some of
the U.S. business that DHL is exiting. "Global shippers have told us they are
looking for unparalleled global reach, and FedEx is the global leader in
express transportation," FedEx said. Black said UPS over the last several
months has won the business of a number of former DHL customers. He said UPS
expects to continue to be able to do that in the future.

Deutsche Post, based in Bonn, Germany, said the new round of job cuts are on
top of another 5,400 job cuts it already announced.

The DHL Express unit currently employs some 18,000 workers. Deutsche Post said
its other operations in the U.S., including freight and global mail and other
logistics, won't be affected by its decision to close all of its U.S. ground
hubs and reduce the number of stations from 412 to 103 across the U.S. The
company said all international shipments into the U.S. will still be
delivered, while 99 percent of the outbound shipments will be picked up.

The decision was announced as Deutsche Post said its third-quarter net profit
more than doubled to 805 million euros ($1 billion) compared with 350 million
euros a year earlier. Sales rose 4.1 percent to nearly 14 billion euros ($18
billion).

Deutsche Post investors cheered the decision, sending the company's shares up
7 percent to 10 euros ($12.90) in Frankfurt trading. In afternoon U.S.
trading, UPS shares rose $1.95, or 3.8 percent, to $53.87, while FedEx shares
rose $1.55, or 2.4 percent, to $66.13.

+++++++++++++++++++++++++++++++++++++++++++++++++++

http://www.corporatewatch.org/?lid=3156

Packaged by HM Prison Service

Prisoners across England and Wales will pick, pack and bag retail orders for
outside businesses after DHL and Booker won a contract to supply prison
canteens. Under the new scheme, 500 low-risk prisoners will be selected by HM
Prison Service, based on 'good behaviour record', to work in 17 workshops in
prisons across the country. DHL, who manage the deliveries, will provide
training for prisoners to complete NVQ qualifications in Warehousing and
Logistics.

Monthly prison newspaper Inside Time has revealed that under the new contract,
beginning in October 2008, DHL and Booker will rationalise the products
available to prisoners to a range of 750 product lines, from tuna tins to
stamps and phone credit. The new list, down by approximately 300 items from
the previous list provided by Aramark, will affect 80,000 prisoners.

According to the Prison Service Order 4460, all prisoners who participate in
"purposeful activity" must be paid. Their rate, however, is not subject to the
national minimum wage (#5.52 an hour). The average pay in UK prisons is
estimated at #9.60 per 32-hour week, or 30p an hour. There are no figures for
how many prisoners earn money in total but the prison workforce is estimated
at 10,000 people in 370 workshops.

Many big companies are known to have exploited prisoners' cheap labour to
produce their products, including Sainbury's for packing their plastic spoons
and Virgin Airways for packing their entertainment headphones.
Inside Time has recently revealed that the previous prison canteen supplier,
Aramark, used Category D prisoners at HMP Blantyre House in Kent to pack
canteen supplies for all Kent prisons. This is something that has reportedly
been happening in a number of other prisons, including HMP Shepton Mallet in
Somerset.

Some 4,000 prisoners also work for Contract Services packing and producing
goods for some 370 private customers, generating #6.1m in revenue in 2007/08.
Earlier this year, the Ministry of Justice finally admitted, following a
Freedom of Information Act request lodged by the Campaign Against Prison
Slavery, that part of Contract Services' role is to produce revenue to offset
the costs of imprisonment, something the ministry seems to have been loathe to
admit previously.

Last month, Corporate Watch also reported that detainees at Campsfield House
immigration prison in Oxfordshire, which is run by Global Expertise in
Outsourcing (GEO), are being paid #5 for six-hour shifts of cleaning and
kitchen work (www.corporatewatch.org.uk/?lid=3133).

Joe Black from Campaign Against Prison Slavery (CAPS) said: "The government
and prison authorities maintain that the prison system exists not only to
protect the public and maintain civil order, but also to rehabilitate
offenders through education and training. But how can some mind-numbing
activity such as packing tap-washers into packets of four or putting greeting
cards into cellophane wrappers for up to 10 hours a day, week in week out,
ever be constituted as holding any skill-training value?"

Campaigners argue that the British government, in its efforts to build up a
prison-industrial complex based on the US model, needed to "subdue and coerce
this captive workforce into a compliant state." Part of this was introducing
the Incentives and Earned Privileges (IEP) scheme in 1995, which encouraged
"hard work and other constructive activity" by introducing a system of
privileges that are "earned by prisoners through good behaviour and
performance" and are "removed if they fail to maintain acceptable standards."
Under Rule 8, even the right to possess tobacco and to smoke is an 'earned
privilege', which can be taken away for breaking any of the myriad prison
rules listed in the Prison Discipline Manual.

The scheme, which was partly a response to prison rebellions and riots in the
1970s and 80s that provoked a radical restructuring of the prison control and
discipline system, has also proved an essential tool in the industrialisation
of British prison labour. At the core of the scheme was the concept of paying
prisoners "to encourage and reward their constructive participation in the
regime of the establishment." Pay rates vary depending on resources, the
amount and type of work available at each prison, and the level reached on the
IEP scheme. At present, the minimum wage is #4 per week, as it has been for
the past 18 years. Prisoners willing to work but unemployed because no work is
available get #2.50 per week. Most of the work available, by the authorities'
own admission, "provides little training, qualifications or resettlement
activities for prisoners."

According to Inside Time, the Prison Service team responsible for the new re-
contracting arrangements apparently had "no choice but to continue working
independently with contractors," as supermarket chains like Tesco and
Sainsburys were "not interested" in supplying prisons - the spending of the
whole prison population is said to be equivalent to 50% of one typical Tesco
convenience store. So the new service was designed on a hub-and-spoke model,
similar to the way parcel courier services work. In the plan, ten or twelve
prisons were to be designated as distribution hubs, each responsible for
supplying a specific number of prisons (the spokes) in their particular
geographical area. Deliveries would come directly to the hub store and
prisoners would be 'employed' to pick and pack consignments for the
neighbouring prisons. A "positive element" of this was seen as the additional
"work opportunities" for prisoners in these picking and packing units.

DHL is a Deutsche Post World Net brand and employs some 300,000 people across
the world. In 2007, the multinational generated revenues of more than 63bn
Euros (#49.8bn). Booker is the UK's largest cash-and-carry operator, with 172
branches across the country. In June 2007, Booker reversed into Blueheath
Holding Plc to form Booker Group Plc. Their total sales in 2007/8 were #3.1bn,
with operating profits increasing to #46.1m.

+++++++++++++++++++++++++++++++++++++++++++++++++++

http://www.ssonetwork.com/awards_previous.aspx?id=600

Europe
The 2008 Shared Services Excellence Awards were presented at Shared Services
Week on May 19th-22nd 2008 at the Melia Sitges, Barcelona, Spain.

Once again the great and the good of shared services gathered for the annual
gala dinner and awards ceremony - and were soon in stitches as guest speaker
Jim Lawless told how a #1 bet made with an audience member during a
motivational presentation gave him a year to retrain as a jockey - losing
three stone in the process. Jim's message - to "tame the tigers" of apathy,
fear and self-consciousness that hold back each and every one of us in our
daily lives - was conveyed through a quick-fire assault of jokes, anecdotes
and slapstick - and a fair degree of audience participation. The message
certainly got through - as more than one of the awards presenters could
testify...

At the end of Jim's hilarious performance, and with the help of a fine backing
band, the awards ceremony itself got underway, and a succession of winners and
honorary mentions came up to receive the acclaim of their shared services
peers - and, of course, the very fetching Shared Services Excellence Awards
themselves. The judges had decided upon a few surprises as well as honouring
some old favourites; by the end of the evening the audience had greeted an
array of truly worthy winners, and as the band struck up once more it was the
Kellogg's Shared Services team who took the stage for the ultimate accolade:
the award for Shared Services Organisation of the year.

The Shared Services & Outsourcing Network would like to offer sincere
congratulations to all the winners for 2008 and, indeed, extend this to
everyone who entered, as the standards of entry this year were once again of a
very high level. Roll on 2009!

And the winners were...
Best Mature Shared Services Organisation: EDS Honorary Mention: Procter &
Gamble

Best New Shared Services Organisation: HM Prison Service Honorary Mention:
HBOS

Thought Leader of the Year: Reginald van Peteghem, Borealis Honorary Mention:
Davide Laghi, Iron Mountain

Best Process Improvement & Innovation: Borealis Honorary Mention: EDS

Shared Services Employer of the Year: Kellogg's Honorary Mention: British
American Tobacco

Best Customer Service Delivery Framework: StatoilHydro ASA Honorary Mention:
EDS

Business Process Outsourcer of the Year: Genpact Shared Services Organisation
of the Year: Kellogg's

The Advisory Judging Panel
An objective panel of judges evaluated and scored each application. The panel
contained leading experts and practitioners in the shared services field and
judging organisations were excluded from submitting applications for the
category they were judging. Supporting sponsors helped make the Shared
Services Excellence Awards 2008 possible. In no way were they involved in
determining award criteria or decisions about award winners.
Supporting sponsors may not be on the Shared Services Excellence Award
Advisory Judging Panel. The Shared Services Excellence Awards Judging Panel
2008:

Patrick Arlequeeuw, Vice President Global Business Services, Procter & Gamble
Lynda Atherton-Miles, Director, Cummins Business Services Europe Carl Barnes,
Head of Country Accounting Centres (CAC) UK & Ireland, DHL Dan Foley, Head of
Shared Service Centre, Marks Spencer John Gregory, Director of European Shared
Services, Kellogg's Robert Horvath, Global Head of Shared Services, Vodafone
Sameer Jalundhwala, formerly Head of Global SSC Development, Orange Business
Services Fraser Kirk, Programme Director, Coca Cola Phil Searle, formerly
International CFO, Cendant Travel Distribution Services

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