By James Pilcher
Enquirer staff writer

Air cargo carrier DHL will consolidate its domestic hub in Wilmington, leaving uncertain the long-term fate of its Erlanger operation and more than 1,800 local jobs, Kentucky and airport officials said Thursday.

"What it came down to is the fact that they could not financially afford to operate a hub in Northern Kentucky," said Doug Hogan, a spokesman for Kentucky Gov. Ernie Fletcher. "They own the airport up there in Wilmington, and that was one key factor they cited."

Wilmington is about 50 miles northeast of Cincinnati.

Hogan said Fletcher was told that local jobs would remain "in the short term ... but we are not sure about potential transfers or anything else over the long term."

DHL officials would neither confirm nor deny the reports.

"We are getting quite close to making an announcement, but prior to us making an announcement, we first want to notify our employees," DHL spokesman Jonathan Baker said Thursday. "We would be concerned that any comments by third parties would be speculative and likely miss many important facts related to a pending decision."

Cincinnati/Northern Kentucky International Airport spokesman Ted Bushelman said DHL officials told him and other airport executives of the decision at a 5 p.m. meeting Thursday.

"They said that the rest of the details would come out (today)," Bushelman said.

DHL employs more than 1,800 workers at the local airport, mostly part-time overnight shift workers.

Bushelman said DHL offered no details at Thursday's meeting on the future of those workers or when a move from the airport would take place.

Bushelman also said DHL did not say what it plans to do with its new $220 million hub and sorting building on the airport grounds. That building opened in August.

Overall, the building and surrounding tarmac give the company 3.75 million square feet of usable space - more than the total area of Delta Air Lines' Terminal 3 at the airport. DHL's space includes 75 acres of airplane parking and 320,000 feet of interior cargo-handling space on three levels.

The company has been considering consolidation of the Cincinnati and Wilmington hubs since the Brussels-based shipping giant bought most of the assets of Airborne Express, including the Wilmington hub, last spring for $1.05 billion.

Officials in Ohio Gov. Bob Taft's office said they expect an announcement on a decision as soon as today.

"We can't say anything more than that out of respect for the company," Taft spokesman Orest Holubec said.

With thousands of jobs at stake, officials from both Kentucky and Ohio have been pitching a fierce battle for the past year over landing the consolidated hub.

ABX Air, the independent company that operates the Wilmington hub on behalf of DHL, employs 6,000 workers in the Clinton County city, making it the largest employer in that region. The Wilmington operation is larger and can handle more than twice the freight than Cincinnati. ABX Air was spun off as a separate airline and operating company when DHL bought Airborne Express.

DHL, which dominates the international air-express business, bought Airborne to crack open a niche in the domestic market. Earlier this month, DHL, a privately held subsidiary of Deutsche Post, launched a $150 million ad campaign in an attempt to position itself as a new player in the U.S. market.

In an interview with the Enquirer Tuesday - a day after he visited DHL's new Erlanger building to greet President Bush - Gov. Taft said Ohio put its best development proposal on the table, realizing that the state was competing with Kentucky.

"My impression, too, is that DHL, if they decide to go to Wilmington, they're going to abandon or sell the facility in Kentucky," Taft said. "Or they will at least scale it back."

Taft said that while DHL in Northern Kentucky might have some indirect benefits to Cincinnati's regional economy, his job as governor was to fight for Ohio - where DHL is a major employer of residents in six counties.

"I would certainly include Wilmington in the Cincinnati region," said Taft, a former Hamilton County commissioner who met with DHL officials as recently as May 17.

Fletcher also got personally involved in courting the DHL hub, meeting with company officials several times.

Neither Hogan nor Holubec would say what any incentive packages might include.

However, Hogan said DHL told Fletcher that any delay in making a decision was costing the company $160 million a year.

In 1995, Airborne Express received a 60 percent, seven-year state tax credit for the creation of 107 jobs and also received a $500,000 grant from the Ohio Investment in Training Program.

In 1993, the company got a $100,000 grant from the state's Business Development Account.

In Kentucky, DHL received $17 million from the state to help build ramp space and de-icing pads when it put up the new building.

Another part of the deal included the state legislature agreeing to cap the amount of jet-fuel tax states collect from airlines at $1 million annually per carrier, down from $4 million a year.

Enquirer staff writer Greg Korte contributed. E-mail jpilcher@enquirer.com