Wilmington’s Painful Lesson

Imagine if Procter & Gamble employed one out of every three Cincinnatians, then announced it was closing up shop here. Kaput. Goodbye and good luck.
That’s the kind of shockwave that ripped through Wilmington when air cargo carrier DHL revealed it intends to halt operations there. Closing DHL’s largest U.S. hub means the potential loss of more than 8,000 jobs and a devastating ripple effect for a nine-county area of Southwest Ohio, according to U.S. Rep. Mike Turner (R-Dayton).

Just four years ago, DHL decided leave Cincinnati-Northern Kentucky International Airport and contract with two air carriers at Wilmington Air Park — ABX Air Cargo and ASTAR. Now DHL wants to switch that business to UPS.

The DHL hub is a cornerstone of the logistics industry in Ohio. Elected officials at every level, from Wilmington Mayor David Raizk to Lt. Gov. Lee Fisher and Ohio’s congressional delegation, mobilized to confront this economic crisis. Their chances of getting DHL to reconsider are close to nil, but they may have a legitimate anti-trust case to make. Is it good for the U.S. economy to have only two companies — FedEx and UPS — nearly dominate all air cargo?

As Mayor Raizk emphasizes, real people face extreme hardship. These kinds of gut-wrenching corporate moves can wound American confidence in big businesses and promises made to communities, often in return for lucrative tax breaks and other public investment.

This should be a wake-up call to business and political leaders who would find themselves in the same crisis mode if Delta Air Lines were to close or further downsize its CVG hub. Escalating fuel prices, among other factors, are driving DHL to dump Wilmington and shift operations to a competitor. Those same pressures could force Delta to renege on its commitments here.
The Editors

Research Impact

Our focus on health in this issue of Cincy provides snapshots of the exceptional care delivered by area hospitals, physicians and allied professionals. A new report about Cincinnati Children’s Hospital Medical Center illustrates another aspect: The huge economic bounty of the Tristate’s healthcare industry.

Children’s, just rated the third-best hospital nationally for general pediatrics byU.S. News and World Report, is well known for quality of care. Not so obvious is how the center is now a top-notch research facility, attracting impressive public and private investment. Children’s is now the No. 2 pediatric center in the country in terms of grants received from the National Institutes of Health, averaging about $80 million a year. Our profile in this issue of Jeffery D. Molkentin, Ph.D., is just one illustration of the scientific excellence at work there.

Over the past 10 years, Children’s has hired an average of 700 employees annually, earning starting salaries now averaging $55,000. The center now employs more than 10,000 people. According to the University of Cincinnati study, Children’s total economic impact in 2007 was $2.7 billion, up 78 percent in just five years. Along with growing research at other area hospitals and clinics, such numbers are encouraging in a dismal economic climate.

Suffering Banks

The condition of our regional banks should remind us how employees can suffer even when a business stays in business. As theNew York Timesreported recently, Fifth Third Bancorp was created out of a financial panic in 1907, and that bank and many similar institutions “are being shaken to the core by a 21st century financial crisis.” Looking at the change in stock prices over the past 12 months, theTimes reported that National City is down 86 percent, Fifth Third by 78 percent and PNC Financial by 23 percent.

The pain is felt here in many ways, from retirees whose investment nest eggs are shrinking to the companies struggling to get financing for legit business operations or expansions.

Also hurt are thousands of bank employees who count on stock options as a big chunk of their total compensation. Not every bank employee with stock options is the proverbial “fat cat.” Most of these bank employees work hard and are not responsible for decisions that sent their bank’s worth plummeting. They counted on their modest stock options to cover the basics of life, such as replacing the old car, paying for kids’ college tuitions or helping ailing parents. Now that money has evaporated.