[I thought UPS has a very good business?]--"UPS to Close Hub in 2006, Laying Off 1,400"
By JAMES HANNAH, Associated Press Writer
DAYTON, Ohio — UPS Inc. will close its recently-acquired freight sorting hub in Dayton in 2006, eliminating 1,400 jobs, the world's largest shipping carrier announced Thursday.
The facility is its only sorting hub for heavy airline freight. A new hub for handling cargo weighing more than 150 pounds will be built at another UPS facility in an effort to improve efficiency, said Norman Black, spokesman for the Atlanta-based UPS.
The new sorting hub will be built at one of the company's other hubs in Louisville, Ky.; Philadelphia; Dallas; Ontario, Calif.; Rockford, Ill.; Columbia, S.C.; and Hartford, Conn., Black said.
UPS has operated the hub at Dayton International Airport since Dec. 20, when the company bought it from Menlo Worldwide Forwarding for $150 million. It had also assumed $110 million in debt in that deal.
UPS leases space for heavy freight on other airplanes that fly into and out of Dayton in southwest Ohio, Black said. The company does not want to shift its shipping routes to fly its planes to Dayton, and building a new sorting operation at an existing hub will allow UPS to use its own planes for heavy packages, Black said.
"That's where the efficiency comes in," he said.
Workers at the site unload freight from arriving planes, sort it according to destination, and then reload it on departing planes.
A small number of workers may be offered jobs at other UPS locations, with the remaining employees given severance pay and job counseling, Black said. "This was a very difficult decision," he said.
UPS shares fell 14 cents to $76.51 in midafternoon trading on the New York Stock Exchange. Its shares have ranged from $67.51 to $89.11 over the past 52 weeks.
Last month, UPS reported its fourth-quarter profit rose a disappointing 1.2 percent to $866 million on a 10.2 percent increase in revenue to $9.84 billion. At the time, the company said it was implementing a management hiring freeze and would work harder on reducing costs.
Some analysts have suggested that UPS has been hurt by increasing competition from rivals including FedEx Corp. and the United States Postal Service.
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