One cost cutting suggestion and quick rant.

PixieKell

Newbie
Sep 3, 2002
3
0
Washington DC has some of the highest rates for Class A office space in the nation. Washington DC average rate for Class A (per the Society of Industrial and Office Realtors ) is $38.86 per square foot. Compare that to Charlotte which comes out to $25.00 (sorry I could not find the rate for Pittsburgh but it is probably close to Charlotte or the national average which is $23.02).
If they can break a lease in bankruptcy why not move our headquarters to a more reasonable city as far as costs are concerned. The other benefit would be that the cost of living is less in Philadelphia, Charlotte or Pittsburgh. Im pretty sure Dave doesn''t use the Metro and would not miss it. Executive and administrative pay would go that much further in any of those cities. And they could also get anywhere in the system a little easier.

just a side not....I noticed that Dave has said in a few interviews that we will never be a Jetblue or Southwest. Yeah, he is right Jetblue''s CEO doesn''t get anymore stock options. People magazine did an article on him he was quoted as saying he felt owning 8% of the stock is enough. He gets a 200,000.00 salary and that is it. Of course their stock closed at $38.08 today. And BTW their office is in Queens not in Manhattan like ours probably would be if we were HQ''d in New York.
I am not trying to slam Dave. I think in the world of CEOs he is probably one of the most honest we could get (I hope I am not proved wrong). I think his job is a tough one under good circumstances and very tough under these and he seems to have a good work ethic.
But I also feel that before you approach your employees (and especially the lowest paid ones who have given before) you should pursue every avenue possible to cut costs and wasteful spending. Employee pay is not wasteful spending too much on rent is. Employee pay should be the last thing considered to cut costs.
[:(]
 
C

chipmunn

Guest
Pixie:

The company has evaluated the thought of moving its headquarters, but this move would be very expensive. The airline would have to break a lease, pay for the move, and employee relocation expenses, which could include buying employee homes. It's likely during the current financial crisis, the carrier does not have the funds to execute a headquarter change.

Also noteworthy, there is an intangible benefit to having the headquarters near Washington as evidenced by the successful campaign to prevent changes to the emergency-spending bill, which could have killed the loan guarantee program.

Chip
 

geo1004

Senior
Aug 22, 2002
288
0
Repeet:

Aside from the high cost of moving the HQ, I wonder how excited the citizens of CLT would be to hear that their schools and roads will be underfunded this year but "they" are offering a BK company tax breaks and incentives to move in???

No politician (not even in NC!!!) would be that foolish... [:bigsmile:]
 

dfw79

Senior
Aug 20, 2002
308
0
Repeet:

Go back and read what Chip said. Relocating a corporate headquarters would cost WAY too much money. You simply can't just pick up and move the thing -- this isn't SimCity. :) However, other offices should be looked at for relocating -- namely the call centers, if they intend to keep them. Following the roles of companies like Sykes and other call center outfits -- they try to put their centers in smaller college towns. Or in U's case...they can follow the lead of AT&T, Sprint, AOL, Farmer's, and 25 other centers and build in OKC -- which has the 2nd lowest cost of doing business in the country. Add in the benefits of low cost of living, great city infrastructure, and sitting on the crossroads of some major communications fiber backbones -- it is a perfect local for the company to setup a "mega" call center. Of course they would have to add in a couple flights into the city to connect to the network for nothing more than offering the ability for employees to move around. The other side benefit would be reduction in employee costs. Many employees would not be willing to pick up and move 1500 miles west from their east coast homes.

This would be the prefered road to go instead of outsourcing. It would also weaken the CWA since employees at an Oklahoma call center would not be forced to join the union thanks to Right to Work laws. [:)]
 

geo1004

Senior
Aug 22, 2002
288
0
FYI: The Crystal City area of Arlington, Virginia has a much LOWER occupancy rate when compared to the rest of the DC Metro area. We are not talking about a K Street address here. And, we are talking about an airline in BK that can not afford to move and is located in an area where many larger tenants are moving out. There is a LOT of open office space in CCY right now...
 
PixieKell

I agree with you one hundred percent.

Living in Charlotte, I happen to know that the Airport Director here, Jerry Orr, has repeatedly made US Airways incentive like offers to move their headquarters here.
He has said repeatedly, "tell me what you want, where you want it, and I'll build it for you.

Companies take money from their employees first because it has always been the easiest way to "get" money. That day has just ended. Hopefully from now on, taking money from their employees will be one of the hardest ways to raise money.
 
I read the part about it costing "way to much". I'm not advocating a move right now.

I have never heard about tax breaks being included in the offers.

"It would also weaken the CWA since employees at an Oklahoma call center would not be forced to join the union thanks to Right to Work laws."

Funny, the North Carolina Right to Work laws didn't keep me from being forced to join the union. Though it has been an interesting ride.[:0]

(It's a Railway Labor Act thing.)
 

AOG-N-IT

Veteran
Aug 19, 2002
1,132
1
www.usaviation.com
At the current rate of jobs being lost in N.C....I would venture to say that they would be doing backflips to accomodate us. Relocating may not be an immediate choice for cost cutting...but it should be something to carefully consider in the long term. Half of our current problems are directly related to the "For the Moment" thinking. Projective thinking says that CLT or PIT will always have a lower cost per square foot...and the cost of living will always be cheaper as opposed to the DCA area. Leases like everything else can be re-negotiated. The proximity to the "Nations Capitol" is nice...but with Acft bridging that distance from CLT,PIT and PHL with regularity...it's hardly an end all awnser for not re-thinking corporate Hq's location...If a better deal can be struck???[:)]
 

diogenes

Veteran
Aug 22, 2002
2,515
0
Here's a modest cost cutting measure.

Several of our stations are a close commute, either via highway or airway. Why have a manager in each one? Let one manager manage two , three or even four stations. It's ok to have him/her manage mainline and/or express. I understand the ORD manager also has MDW and MKE. Maybe the RDU guy can handle GSO and FAY. This has been done regularly on a temporary basis - let's institutionalize it! Hey, times are tough [;)]
 

W:EXCH:INVOL

Advanced
Aug 20, 2002
171
0
DFW79....What is it with your fetish of call centers and OKC?? Is that where you came from before TOL???

INVOL
 

oldiesfan

Member
Aug 20, 2002
51
0
Rocky River, OH
----------------
Here's a modest cost cutting measure.

Several of our stations are a close commute, either via highway or airway. Why have a manager in each one? Let one manager manage two , three or even four stations.
----------------

Ah, the Cheap Channel radio cluster management theory adapted for airline use. [:bigsmile:]
 

simfixer

Member
Aug 19, 2002
30
0
"Also noteworthy, there is an intangible benefit to having the headquarters near Washington as evidenced by the successful campaign to prevent changes to the emergency-spending bill, which could have killed the loan guarantee program."

Chip

Yeah Chip, just like it helped them get the merger with UAL pushed through, the merger that you kept saying was going to be approved, over and over again. Funny thing is, when all the dust finally settles, you may end up being right after all. Particularly since UAL has a Bush, er I mean oil man running the show.[;)]
 

dfw79

Senior
Aug 20, 2002
308
0
Originally from TOL...but lived in OKC for 5 years working in the call center industry. Nothing more than pointing out a competitive advantage of that area that over 30 companies have seem to exercised.
 

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