United To Relocate World HQ?

[JungleClone]

United looks to consolidate facilities
By Dave Carpenter, AP Business Writer | May 10, 2006

CHICAGO --United Airlines parent UAL Corp. said Wednesday it is looking to consolidate its facilities -- a process that could end with the company deciding to move its headquarters from Chicago's suburbs, according to a Chicago development official.

Article Tools
Printer friendly
E-mail to a friend
Business RSS feed
Available RSS feeds
Most e-mailed
More:
Business section |
Latest business news |
Globe front page |
Boston.com
Sign up for: Globe Headlines e-mail | Breaking News Alerts The company is considering relocating its corporate base from the current location in Elk Grove Village, Ill., to downtown or possibly Denver, said Paul O'Connor, executive director of World Business Chicago, which has been involved in talks aimed at keeping United in Illinois.

UAL spokeswoman Jean Medina declined to comment specifically about a possible headquarters move and said only that the company is examining all its facilities and "reviewing our options."

"We are looking at how best to optimize and consolidate our facilities," she said. "It's premature to speculate what that might mean."

O'Connor said UAL has been scouting for 150,000 to 160,000 square feet of office space in Chicago or Denver to house about 350 headquarters employees. City and state officials have been working for more than two weeks on incentives to persuade the airline company to stay, he said.

"They're a great Chicago company and fundamental to the business health of the city," O'Connor said.

World Business Chicago is an economic development corporation that works to recruit and retain large companies. Five years ago Wednesday, it succeeded in landing Boeing Co. headquarters from Seattle.

John Huggins, Denver's economic development director, said the city has periodic discussions with United, but declined to comment about a possible move. United operates a hub at Denver International Airport and has about 5,000 employees in the Denver metro area.

The possible headquarters move was first reported online Wednesday by Crain's Chicago Business, citing unidentified sources.

United, which bills itself locally as "Chicago's hometown airline," has endured hard times in recent years, including a three-year bankruptcy restructuring that ended in February. But it remains one of the most prominent corporations in the metropolitan area along with such others as Boeing, McDonald's Corp., Motorola Inc., Allstate Corp., Sears Holdings Corp. and Walgreen Co.

Unprofitable since 2000, the company announced a widened first-quarter loss this week amid higher fuel prices and other challenges but reported strong revenue gains and passenger totals.
___________________________________________________________


Interesting. I wonder if this is a serious move by United or if it's nothing but an empty threat to elicit some tax breaks and upgrades for the existing facility in Elk Grove. They've been unhappy with that facility for awhile now. But it's hard to justify moving to a new HQ when you're still losing money, unless it's completely on someone else's dime.

 

[Bulscu]

United looks to consolidate facilities
By Dave Carpenter, AP Business Writer | May 10, 2006

CHICAGO --United Airlines parent UAL Corp. said Wednesday it is looking to consolidate its facilities -- a process that could end with the company deciding to move its headquarters from Chicago's suburbs, according to a Chicago development official.

Article Tools
Printer friendly
E-mail to a friend
Business RSS feed
Available RSS feeds
Most e-mailed
More:
Business section |
Latest business news |
Globe front page |
Boston.com
Sign up for: Globe Headlines e-mail | Breaking News Alerts The company is considering relocating its corporate base from the current location in Elk Grove Village, Ill., to downtown or possibly Denver, said Paul O'Connor, executive director of World Business Chicago, which has been involved in talks aimed at keeping United in Illinois.

UAL spokeswoman Jean Medina declined to comment specifically about a possible headquarters move and said only that the company is examining all its facilities and "reviewing our options."

"We are looking at how best to optimize and consolidate our facilities," she said. "It's premature to speculate what that might mean."

O'Connor said UAL has been scouting for 150,000 to 160,000 square feet of office space in Chicago or Denver to house about 350 headquarters employees. City and state officials have been working for more than two weeks on incentives to persuade the airline company to stay, he said.

"They're a great Chicago company and fundamental to the business health of the city," O'Connor said.

World Business Chicago is an economic development corporation that works to recruit and retain large companies. Five years ago Wednesday, it succeeded in landing Boeing Co. headquarters from Seattle.

John Huggins, Denver's economic development director, said the city has periodic discussions with United, but declined to comment about a possible move. United operates a hub at Denver International Airport and has about 5,000 employees in the Denver metro area.

The possible headquarters move was first reported online Wednesday by Crain's Chicago Business, citing unidentified sources.

United, which bills itself locally as "Chicago's hometown airline," has endured hard times in recent years, including a three-year bankruptcy restructuring that ended in February. But it remains one of the most prominent corporations in the metropolitan area along with such others as Boeing, McDonald's Corp., Motorola Inc., Allstate Corp., Sears Holdings Corp. and Walgreen Co.

Unprofitable since 2000, the company announced a widened first-quarter loss this week amid higher fuel prices and other challenges but reported strong revenue gains and passenger totals.
___________________________________________________________
Interesting. I wonder if this is a serious move by United or if it's nothing but an empty threat to elicit some tax breaks and upgrades for the existing facility in Elk Grove. They've been unhappy with that facility for awhile now. But it's hard to justify moving to a new HQ when you're still losing money, unless it's completely on someone else's dime.

..i'd say united is moving towards it's future, you'd better get on board, cause there's a new sheriff in town, can you say...."Giddie-Up".....!















*As always the views expressed above and nothing more than some wild-ass speculation...whooa!

 

[JungleClone]

Perhaps in lieu of downtown Chicago or Denver, they'll look to move to Houston!

 

[whatkindoffreshhell]

UA will not re-locate.

Moving that spaghetti factory and expecting all those experienced staff to move (and paying for it all too!) is simply not good business.

Where is the value-added from such a move?

Brinksmanship is a waste of time when UA should be focusing on the product.

(unless of course you are Glenn Brace who is simply angling to pump up the short-term numbers to sweeten that bonus pot....)

 

[IORFA]

Maybe they should move to Dallas, leave DFW and start flying from DAL. Then they could complain about the Wright Ammendment all day while flying out of PHL, DEN and IAD. All at the same time cursing DFW as unrealistic compared to the previous 3 airports.

 

[Bulscu]

UA will not re-locate.











I sure don't know...

 

[jimntx]

Good grief. The guys at the top deserve SOMETHING for pulling the company through bankruptcy court and keeping the executive pay, pensions, and bennies intact against all assaults.

They and their wives now have to get in their cars and be driven to Michigan Avenue. So much better to be able to just step out of the office and walk to Nordstroms and Coach. And, they'll get the cardio benefit, too.

 

[ual06]

IMHO, UAL is not the least bit interested in moving their headquarters. They simply want to see how much they may be able to get from the state of Illinois and the city of Chicago, etc.

 

[The Gopher]

IMHO, UAL is not the least bit interested in moving their headquarters. They simply want to see how much they may be able to get from the state of Illinois and the city of Chicago, etc.

Exactly right. SWA was trying to get Dallas to help lift Wright, in return they wouldn't move. USAir/AmWest did the same. Getting big-name corporate HQs to locate in your city is a big-time business, although I think auto manufacturing is the biggest draw (New Toyota, Mercedes, and BMW plants in the south).

350 people, and they want about 140K sq feet? That's 400 sq ft per person, and we're talking office space! I think my cube at WHQ is about 40-50 sq feet, and a director's office is about 200 sq ft (guess). 400 per person is a big place, or there are more plan in the works...

 

[Bulscu]

[quote or there are more plan in the works...
[/quote]




...truer words were never spoken

 

[lpbrian]

Does the IAM still have a lien on the WHO building?

 

[coolflyingfool]

I say LAS VEGAS for the new HQ. If UA ever needs money again, they can just run down to the casino and bet whatever they got in the bank on red or black. just my thoughts.......

 

[767jetz]

Regardless of the motivation, I see nothing wrong with this move. If it saves money in the long run, then why not?

Even if they are just trying to see what breaks Illinois will give to keep UAL. Every other company gets praise for keeping costs down. Every other company looks at this from time to time. No one cried foul when Boeing left Seattle, or B6 gets incentives for starting service somewhere, or WN threatens to leave if Wright is not ammended.

If it saves $$ then it's a smart move. Period. End of discussion.

Yes it is hard for employees who have to move, and for them I feel the most. But this is no different than when UA closed pilot domiciles in Honolulu or Miami, or F/A domiciles in Paris or Newark.

 

[flyhigh]

...additionally, it would be a lot easier to get people from other Chicago businesses to join UA when you can say we're just down the street on Wacker or something instead of out in Elk Grove. I think 767Jetz comment is dead on. Why should people be concerned about the execs having to drive more if line employees are commuting across the country after their domicile is closed???

The interesting think would be how close they are to Boeing since the narrow body fleet is made up of a lot of airbus planes...

 

[Fly]

-----------------------------------------------------------
UAL focuses on 4 towers, including Donnelley
(Crain’s) — Moving quickly to land new corporate headquarters, United Airlines has given downtown Chicago landlords a Friday deadline to present proposals for marquee office space that would serve as its new executive offices.

United sent a request for proposals (RFP) to most of the dozen towers visited by its executives in recent weeks.

But United and its real estate adviser, Staubach Co., are already focusing on four skyscrapers that would potentially be eligible for city incentives, according to people close to the search.


Potential sites for United Airlines new HQ
They are:

* 77 W. Wacker Drive, in space formerly occupied by R.R. Donnelley & Sons Co. Built in 1992 and designed by Barcelona architect Ricardo Bofill, the 51-story tower is owned by Chicago-based Prime Group Realty Trust.
* 190 S. LaSalle St., in space formerly occupied by law firm Mayer Brown Rowe & Maw LLP. Built in 1987 and designed by New York architect Philip Johnson, the 40-story structure is under contract to be sold to the investment arm of Los Angeles-based CB Richard Ellis Inc.
* 115 S. LaSalle St., in space formerly occupied by Lord Bissell & Brook LLP. Built in 1975 but renovated last year, the Skidmore Owings & Merrill LLP-designed building houses operations of Harris Bank and is owned by a venture that includes Houston-based Hines Interests LLP
* 200 W. Madison St., in space formerly occupied by Hyatt Corp. Also designed by Skidmore, the 45-story structure was built in 1982, but renovated last year. It is owned by a venture that includes New York-based Tishman Speyer Properties LP.

The latter three buildings lie within a new tax increment financing (TIF) district that’s being mulled by the city of Chicago, while 77 W. Wacker sits within the Central Loop TIF.

United is particularly interested in procuring naming rights to its new home as well as the right to prominently display its name on the exterior, sources say. The landlords, in turn, are closely examining the airline’s financial health.

UNITED'S HUNT CAUSING RIPPLES

While United’s sub-investment grade credit rating is a concern, it will likely be outweighed by its strong position as the second-largest player in a recovering industry.

Brandon Borrman, a United spokesman, declined to address specifics of its search, saying: “We’re early in the process.â€

United’s headquarters hunt is sending ripples through a market desperate for high-profile tenants.

The airline is looking for about 150,000 square feet to accommodate about 350 members of its executive team, who currently work out of its giant operations center in Elk Grove Township.