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UA Moving 1,300 More Jobs To Chicago  
User currently offlineKngkyle From United States of America, joined Dec 2006, 404 posts, RR: 1
Posted (3 years 3 months 1 week 6 days 13 hours ago) and read 6726 times:
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“As Chicago’s hometown airline, United is pleased to announce that we are bringing an additional 1,300 jobs downtown from locations throughout our system by the end of 2012,” United Continental Holdings CEO Jeff Smisek said. “Mayor (Rahm) Emanuel recognizes the importance of keeping Chicago competitive with other cities and expanding job growth here, and we look forward to working together with him and his team.”

http://www.chicagobusiness.com/artic...osting-downtown-workforce-by-1-300



[Edited 2011-06-10 20:32:52]

37 replies: All unread, showing first 25:
 
User currently offlinethegreatRDU From United States of America, joined Mar 2006, 2310 posts, RR: 4
Reply 1, posted (3 years 3 months 1 week 6 days 13 hours ago) and read 6637 times:

How much in tax incentives did Pat Quinn/ Rahm Emmanuel shell out?   


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User currently offlineUnited787 From United States of America, joined May 2005, 2708 posts, RR: 1
Reply 2, posted (3 years 3 months 1 week 6 days 12 hours ago) and read 6529 times:

Link to NBC5 with video of Rahmbo...

http://www.nbcchicago.com/blogs/ward...obs-to-Willis-Tower-123635269.html


User currently offlineDLHFLYER From United States of America, joined Apr 2009, 184 posts, RR: 0
Reply 3, posted (3 years 3 months 1 week 6 days 10 hours ago) and read 6269 times:

The article says:

"The announcement brings downtown workers from elsewhere in the two carriers' operations."

Is it safe to assume that most of these are from Houston? Where else would they be coming from?



Duluth is a nice city, we even get 3 months without snow per year
User currently offlineboilerla From United States of America, joined Jul 2010, 365 posts, RR: 0
Reply 4, posted (3 years 3 months 1 week 6 days 10 hours ago) and read 6236 times:

Quoting thegreatRDU (Reply 1):
How much in tax incentives did Pat Quinn/ Rahm Emmanuel shell out?

Daley (not Emmanuel) handed out about 30 million. That includes the initial $6.6 million tax incentives for moving downtown, additional tax breaks worked out later (for jet fuel and other non-move related costs), construction cost offsets and real estate loan guarantees that were rolled out in 2006-2009 by Chicago.

I'd say 30 million isn't a bad price considering the number of jobs (over 13,500 total when it's all said and done). Cities have spent 20x more than that on sports arenas for far fewer (any?) benefits.

United was already building a much more modern and larger operations center in Willis Tower when the merger was announced, and it was made clear the Houston operations center would eventually go away. I imagine the target date for UA moving into its new operations center and closing the Houston operations center is when SOC is achieved, so I wonder what this move means for SOC—end of 2012 is pretty vague.


User currently offlineClipper002 From United States of America, joined Aug 2004, 679 posts, RR: 13
Reply 5, posted (3 years 3 months 1 week 6 days 5 hours ago) and read 5950 times:

The date of May 19, 2012 has been given to CO SOC employees as the transfer date. Whether that holds true remains to be seen.

Ed



Ed
User currently offlinebobnwa From United States of America, joined Dec 2000, 6476 posts, RR: 9
Reply 6, posted (3 years 3 months 1 week 6 days 5 hours ago) and read 5910 times:

Quoting DLHFLYER (Reply 3):
Is it safe to assume that most of these are from Houston? Where else would they be coming from?

I believe UA had employees located in the Chigago suburbs, that are now moving todowntown Chicago.


User currently offlineWABENNER From , joined Dec 1969, posts, RR:
Reply 7, posted (3 years 3 months 1 week 6 days 4 hours ago) and read 5843 times:

Quoting boilerla (Reply 4):
I'd say 30 million isn't a bad price considering the number of jobs (over 13,500 total when it's all said and done). Cities have spent 20x more than that on sports arenas for far fewer (any?) benefits.

It is actually, since UAL is getting a tax break for bringing jobs to Chicago that would most likely move there anyway. If it is more efficient to have those jobs elsewhere, then the tax incentives distort the labor market and long run are bad for United. If it makes sense for the jobs to be in Chicago, the city is giving tax incentives to UAL for doing something they would do anyways. The city is thus out $30m.


User currently offlinejfklganyc From United States of America, joined Jan 2004, 3482 posts, RR: 5
Reply 8, posted (3 years 3 months 1 week 6 days 3 hours ago) and read 5724 times:

"larger operations center in Willis Tower"

Yes, and I always find it ironic that any airline (let alone the worlds largest) would put their ops center at one of the largest terrorist targets in the world.

When Guiliani was Mayor of NYC he insisted that the NYC Office of Emergency Management be in 7 World Trade Center despite expert warnings telling him it should be in a more remote location. Needless to say, NYC OEM was scrambling on 9/11 to put a makeshift office together when the WTC collapsed. Guiliani was almost killed because of that move.

That said, UAs main ops should not be in such a high profile building; it is not good planning in the current environment.


"It is actually, since UAL is getting a tax break for bringing jobs to Chicago that would most likely move there anyway. If it is more efficient to have those jobs elsewhere, then the tax incentives distort the labor market and long run are bad for United. If it makes sense for the jobs to be in Chicago, the city is giving tax incentives to UAL for doing something they would do anyways. The city is thus out $30m."

That is not how City planning and govt works my friend.

Higher cost cities have to compete and "level the playing field" against lower cost cities.

As mentioned above, UA can have its headquarters anywhere . . . most notably HOU. Chicago has to make it worth their while to be there.


User currently offlinessublyme From United States of America, joined Dec 2008, 517 posts, RR: 0
Reply 9, posted (3 years 3 months 1 week 6 days 2 hours ago) and read 5581 times:

Quoting jfklganyc (Reply 8):
That said, UAs main ops should not be in such a high profile building; it is not good planning in the current environment.

Hope they have a good disaster recovery/business continuity plan that they would never need.

[Edited 2011-06-11 07:05:13]

User currently offlinecapitalflyer From United States of America, joined Nov 2010, 343 posts, RR: 0
Reply 10, posted (3 years 3 months 1 week 6 days 2 hours ago) and read 5582 times:

Smisek said the positions are high-paying technology posts and will be relocated from Houston, San Francisco and elsewhere.

Read more: http://www.upi.com/Business_News/201.../UPI-13681307730661/#ixzz1OyaCfltV

In case you thought UAL might be moving to Houston with its title as biggest hub in the network.


User currently offlinekl911 From Czech Republic, joined Jul 2003, 5141 posts, RR: 15
Reply 11, posted (3 years 3 months 1 week 6 days 1 hour ago) and read 5433 times:

Quoting boilerla (Reply 4):
Daley (not Emmanuel) handed out about 30 million. That includes the initial $6.6 million tax incentives for moving downtown, additional tax breaks worked out later (for jet fuel and other non-move related costs), construction cost offsets and real estate loan guarantees that were rolled out in 2006-2009 by Chicago.

I'd say 30 million isn't a bad price considering the number of jobs (over 13,500 total when it's all said and done). Cities have spent 20x more than that on sports arenas for far fewer (any?) benefits.

Wouldnt this be seen as illegal government aid by many? I remember the Ryanair courtcases in Europe regarding aid received from local governments.


User currently offline102IAHexpress From United States of America, joined Feb 2005, 1156 posts, RR: 3
Reply 12, posted (3 years 3 months 1 week 6 days 1 hour ago) and read 5365 times:

Quoting boilerla (Reply 4):
I'd say 30 million isn't a bad price considering the number of jobs (over 13,500 total when it's all said and done). Cities have spent 20x more than that on sports arenas for far fewer (any?) benefits.

The city probably overpaid by 30 million. The city of Chicago did not actually create/or help create any new jobs for the residents of Chicago. The thread title is very correct, 1300 jobs are moving to Chicago.

Sports arenas are generally bad investments for local governments BUT at least they create local jobs.


User currently offlinehomsar From United States of America, joined Jan 2010, 1183 posts, RR: 0
Reply 13, posted (3 years 3 months 1 week 6 days 1 hour ago) and read 5283 times:

Quoting 102IAHexpress (Reply 12):
The city probably overpaid by 30 million. The city of Chicago did not actually create/or help create any new jobs for the residents of Chicago. The thread title is very correct, 1300 jobs are moving to Chicago.

Sports arenas are generally bad investments for local governments BUT at least they create local jobs.

Those 1300 jobs (and 13,000 total, as noted above) don't even have to be new jobs for current Chicago residents to pay off. Those employees will be working in downtown Chicago, will be buying lunch downtown, maybe do some other shopping downtown while they're there before they go home from work, etc. That fuels the economy of other employers downtown, who do hire people who live in Chicago.

Those people may then, in turn, spend money in their neighborhoods, furthering the cycle.

So, it's not just about having 1300 or 13,000 UA employees in Chicago, its about all of the other follow-on effects and economic benefits.



I was raised by a cup of coffee.
User currently offlineMKENut From United States of America, joined Jul 2007, 699 posts, RR: 1
Reply 14, posted (3 years 3 months 1 week 6 days ago) and read 5231 times:

Already this new airline is making a huge mistake IMHO. Moving jobs from a very business friendly state to the second worst business friendly state in the union. Just sayin.

User currently offlineKngkyle From United States of America, joined Dec 2006, 404 posts, RR: 1
Reply 15, posted (3 years 3 months 1 week 5 days 23 hours ago) and read 5084 times:
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Quoting MKENut (Reply 14):

Actually, according to this one study, Illinois is #1 in the country for adjusted average income. People tend to exaggerate the taxes in Illinois.
http://www.money-rates.com/news/10-best-states-for-making-a-living.htm

Here is a neat graphic comparing the tax burdens in each state:
http://www.jsonline.com/news/wisconsin/89702927.html


User currently offlineRoseFlyer From United States of America, joined Feb 2004, 9643 posts, RR: 52
Reply 16, posted (3 years 3 months 1 week 5 days 23 hours ago) and read 5073 times:

Quoting DLHFLYER (Reply 3):
Is it safe to assume that most of these are from Houston? Where else would they be coming from?

About 400 are from SFO which is where UA had historically always had their engineering and technical offices. Elk Grove in Chicago was for administration. In my opinion this was one of the dumbest decision made prior to the merger (fortunately the VP that made that decision is not one of the VPs of the merged airline). They are moving almost their entire engineering work force from the main maintenance base at the airline in office buildings adjacent to the facilities to a skyscraper over an hour from the airport.

An engineer needs to be around the product they work on. They are keeping the day to day line (liaison engineers) at SFO and ORD, but for those that work on overall engineering for the airline, they are being put in Willis Tower. I think it is a stupid idea and many voiced that opinion since if for example you are the engineer responsible for IFE systems at UA, (which we all know break all the time), it is a lot easier to go take a 5 minute walk to an airplane to look at a physical component than look at photos and system diagrams.

However in the end, the money incentives are forcing the shutdown of San Francisco engineering. About 400 jobs are going to be downtown. Many will be people transferring from SFO, commuting from SFO or new hires.

As of now I think these moves were planned before the CO merger so that few of them are CO people.



If you have never designed an airplane part before, let the real designers do the work!
User currently offline102IAHexpress From United States of America, joined Feb 2005, 1156 posts, RR: 3
Reply 17, posted (3 years 3 months 1 week 5 days 23 hours ago) and read 5018 times:

Quoting homsar (Reply 13):
So, it's not just about having 1300 or 13,000 UA employees in Chicago, its about all of the other follow-on effects and economic benefits.

Sure, but why pay or overpay for something that was going to happen anyways? There was no need for the City of Chicago to offer the incentive.

Quoting Kngkyle (Reply 15):
Actually, according to this one study, Illinois is #1 in the country for adjusted average income. People tend to exaggerate the taxes in Illinois.

In this survey Illinois is ranked as the third worst state in the country to do bussiness.
http://chiefexecutive.net/best-worst-states-for-business

the Chicago Mercantile Exchange, Sears and Caterpillar have all recently threatened to move from Illinois.

How many years before United threatens to moves to Houston?


User currently offlineKngkyle From United States of America, joined Dec 2006, 404 posts, RR: 1
Reply 18, posted (3 years 3 months 1 week 5 days 23 hours ago) and read 4956 times:
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Quoting 102IAHexpress (Reply 17):
the Chicago Mercantile Exchange, Sears and Caterpillar have all recently threatened to move from Illinois.

And none of them actually did move. It's just a dance between business and government. The tax raises gave businesses a reason to ask for more subsidies, so that's what they did. I doubt any of them were really intending to leave, they just wanted some tax breaks.

Even so, I'm not arguing that Illinois is better for business than Texas (that would be foolish) I'm just saying that people exaggerate the tax burden in Illinois. It was funny when the New Jersey and Wisconsin governors were trying to lobby companies to leave Illinois because of the tax increase and come to their state, even though their states taxes are higher.


User currently offlineMKENut From United States of America, joined Jul 2007, 699 posts, RR: 1
Reply 19, posted (3 years 3 months 1 week 5 days 23 hours ago) and read 4948 times:

Quoting Kngkyle (Reply 15):

Neither of these stories talk about the path of fiscal destruction the State of Illinois is on. UA only has to threaten to leave the state to get an incentive to stay. This is my opinion only, but I think moving HQ to Houston probably would have saved a mountain of cash in the long term. But hey, I am only an armchair CEO that just so happens to be a cheeshead too. LOL


User currently offline102IAHexpress From United States of America, joined Feb 2005, 1156 posts, RR: 3
Reply 20, posted (3 years 3 months 1 week 5 days 22 hours ago) and read 4856 times:

Quoting Kngkyle (Reply 18):
And none of them actually did move. It's just a dance between business and government. The tax raises gave businesses a reason to ask for more subsidies, so that's what they did. I doubt any of them were really intending to leave, they just wanted some tax breaks.

None of them have moved yet. Illinois only has to look at California to predict its future. For 2011 California is losing a business to another state at a rate of 4.7 lost business per week. None of those bussines suceeded in their "dance" as you call it. All the incentives in the world will not help your bussiness, if you have to do bussiness in an envirnment of red-tape.

A good WSJ opinion article about California employers moving.
User currently offlineAirNZ From , joined Dec 1969, posts, RR:
Reply 21, posted (3 years 3 months 1 week 5 days 18 hours ago) and read 4097 times:

Quoting kl911 (Reply 11):
Wouldnt this be seen as illegal government aid by many?

Of course it would....and is. But, let's be honest, it'll be glossed over and twisted into something else.


User currently offlineWABENNER From , joined Dec 1969, posts, RR:
Reply 22, posted (3 years 3 months 1 week 5 days 17 hours ago) and read 3944 times:

Quoting 102IAHexpress (Reply 20):
Illinois only has to look at California to predict its future.

Actually IL is worse off than NY or CA. Why? CA has Hollywood and Silicon Valley that produce a tremendous amount of wealth for the state. NY has Wall Street. IL has well....nothing that compares.

Quoting jfklganyc (Reply 8):
That is not how City planning and govt works my friend.

Higher cost cities have to compete and "level the playing field" against lower cost cities.

As mentioned above, UA can have its headquarters anywhere . . . most notably HOU. Chicago has to make it worth their while to be there.

That is EXACTLY how it works. Studies have shown that special targeted tax breaks for business or industry are a huge net loss. UAL was never planning to move to HOU, so that point of your argument is moot. IL and Chicago are paying UAL to do something they would likely be doing anyway. If UA wasnt going to move those jobs to Chicago, there is a good reason why: It wasnt in the airline's best interest.

Quoting Kngkyle (Reply 15):
Actually, according to this one study, Illinois is #1 in the country for adjusted average income. People tend to exaggerate the taxes in Illinois.

Gee, that would certainly explain why Illinois population has been nearly flat since 1980. I suspect this ranking is highly skewed. Cost of Living in IL is not high outside Chicago, but wages arent particularly high unless youre a state employee. IL does have one of the highest corporate tax rates, which is why businesses leave the state. Also I dont know what "Adjusted average income" is. It may be a stat that is rather Subjective.

Quoting 102IAHexpress (Reply 17):
the Chicago Mercantile Exchange, Sears and Caterpillar have all recently threatened to move from Illinois.

Throw in Jimmy Johns also

Quoting Kngkyle (Reply 18):
And none of them actually did move. It's just a dance between business and government

And ultimately the taxpayers lose because the state has to give all sorts of special tax breaks to keep business in the state. The result is rising sales and personal income taxes to make up for the revenue loss.


User currently offlineRevelation From United States of America, joined Feb 2005, 12563 posts, RR: 25
Reply 23, posted (3 years 3 months 1 week 5 days 17 hours ago) and read 3767 times:

Quoting bobnwa (Reply 6):
I believe UA had employees located in the Chigago suburbs, that are now moving todowntown Chicago.

That must suck. A lot of people living in suburbia now have to commute into the city. UAL gets a tax break, the employees get a costly and frustrating commute.



Inspiration, move me brightly!
User currently offlineKngkyle From United States of America, joined Dec 2006, 404 posts, RR: 1
Reply 24, posted (3 years 3 months 1 week 5 days 16 hours ago) and read 3668 times:
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Quoting Revelation (Reply 23):
That must suck. A lot of people living in suburbia now have to commute into the city. UAL gets a tax break, the employees get a costly and frustrating commute.

Or they could take the train and have a cheap and relaxing commute.


25 MarcoPoloWorld : Although I too dislike the tax incentive component of this, the relocation of jobs from the suburbs to the city center seems like a smart move, and on
26 Max Q : I could not agree more, I hope they are keeping the back up emergency facility in Tx active and available.
27 Post contains links and images Rising : And Glenn Tilton is moving to JP Morgan. http://www.wbez.org/story/jp-morgan-...ed-ceo-head-midwest-business-87462
28 Post contains links nycdave : As Connecticut recently learned with UBS, offering tax incentives for businesses to move in tend to be foolish long-term moves. Capital is highly mobi
29 RoseFlyer : For many positions such as finance, revenue, accounting, IT, etc it is a great move. However they are also moving operation control and engineering t
30 Post contains links 102IAHexpress : Krugman and yourself know very little about Texas government. First, there's no such thing as a shortfall in Texas, since Texas uses zero-based budge
31 Revelation : If the train station is in walking distance, or if there is enough parking at the train station and it isn't too far from your house. Keep in mind so
32 brons2 : While meeting the requirement for a balanced budget for the FY2012-FY2013 biennium has been difficult, neither the folks at the Texas Observer nor Pa
33 Post contains images commavia : It's an economic incentive and it's not illegal. Interesting. That does seem a bit odd to move airport-based engineering work to a downtown skyscrape
34 jfklganyc : "As for "cultural/legal issues regarding minorities," I have no idea what that's referring to - Texas has been more successful at integrating more min
35 commavia : What's laughable is people continue to spew the same staid, outdated stereotypes about Texas and the south when they obviously have no idea what they
36 COflyerBOS : Yeah, Texas is such a horrible place for gays and lesbians to live that we actually elected one MAYOR OF HOUSTON. Sorry, but I live my life as an open
37 ORDBOSEWR : I think UA can get this without your pov that it has to be near the planes. A good example of why I disagree are retailers who have complex systems t
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