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Old September 13th, 2004, 12:37 AM   #1
The Urban Politician
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Loss of a Headquarters

We were thrilled to see Office Max come to town (albeit to the retarded suburbs) as well as 1-2 recent companies move into the city, from the suburbs. Also, Cosi (the urban restaurant) is moving its HQ to Chicago from NY. But here's a loss:

FMC confirms move to Houston


Securities Exchange Commission filings by FMC Technologies Inc. confirm what the company has until now been unwilling to acknowledge: The oil industry equipment maker moved its headquarters to Houston from Chicago earlier this year.
The first official acknowledgement of the move came in the company's annual report filed with the U.S. Securities and Exchange Commission in March, which lists Houston as FMC Technologies' headquarters.

In August 2002, when rumors were swirling that the city was about to lose another corporate headquarters, an FMC Technologies spokesman told Crain's: "There is no truth to the rumor we're relocating our headquarters."
Late last week, a Houston-based spokesman said, "Over the last couple of years we've been transitioning our headquarters to Houston to be closer to our primary energy base."

CEO Joseph Netherland lives in Houston. About 80 workers remain in Chicago.
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HOw annoying. What on earth attracts people to the south? I've lived there, it totally BLOWS down there. Why would someone give up the world-class urban life, diversity, culture & theatre scene, hipness, etc of Chicago for some backwater cowboy-town on steroids? I am waiting for the oil industry to go under so that 90% of Houston's economy will collapse
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Old September 13th, 2004, 01:43 AM   #2
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They are located in Aon the last time I checked. . . not a surprise as Houston seems the more logical fit. . . same with the Borg Warner loss to Detroit. . .
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Old October 1st, 2004, 04:08 PM   #3
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CheapTickets.com is moving to Chicago!

Remember few days ago NYC-based Cendant bought Chicago-based Orbitz? Well, Cendant is relocating CheapTickets.com from suburban Denver to Chicago! Yea! I hope it will be located in downtown, not in suburb.
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Old October 1st, 2004, 04:27 PM   #4
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Quote:
Originally Posted by Chi_Coruscant
Remember few days ago NYC-based Cendant bought Chicago-based Orbitz? Well, Cendant is relocating CheapTickets.com from suburban Denver to Chicago! Yea! I hope it will be located in downtown, not in suburb.
More specifically, Cendant is relocating its online travel division (which includes other operations besides CheapTickets.com) to Chicago, mostly for the purpose of combining these businesses with Orbitz. Orbitz is in the Loop already, so there's a good chance that the whole division will stay there.

Cendant apparently intends to maintain Orbitz, CheapTickets.com and others as separate brands, but all mergers are done at least in part to achieve efficiencies through eliminating duplicate support operations, so they would benefit from being in close proximity to one another.
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Old October 1st, 2004, 11:11 PM   #5
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if I'm not mistaken, all the boeing staff that moved from Seattle to Chicago could fit on the same elevator going up to the new HQ. do corporate HQ's really matter anymore? it's not like any of them are lavishing $$$ on the cultural life of the city the way they used to do (Millennium Park asside)
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Old October 1st, 2004, 11:22 PM   #6
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I think any city would rather have a corporate headquarters than not, especially if they don't have to give up anything to get it. You can't get around the fact that headquarters tend to have more of the highest paying jobs in a company than other locations; that they tend to utilize other highly-paid professionals in the same city (lawyers, accountants, ad agencies, etc.); and corporations may donate less money these days, but they still tend to give more to their hometowns than any other place.
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Old October 4th, 2004, 04:54 AM   #7
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IMO, Cendant's acquisition of Orbitz is a really good thing for Chicago. Not all buyouts are bad. It immediately infuses cash into the company, and as you guys mentioned, they are moving their online travel division here. That means more jobs, and an increased importance of Chicago in the online travel business.

Headquarters losses (like Orbitz) are not always bad if they bring more jobs and fresh money. However, in some cases (Bank One) they are definitely not good for the city
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Old October 4th, 2004, 05:30 AM   #8
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Quote:
Originally Posted by Kevin J
I think any city would rather have a corporate headquarters than not, especially if they don't have to give up anything to get it. You can't get around the fact that headquarters tend to have more of the highest paying jobs in a company than other locations; that they tend to utilize other highly-paid professionals in the same city (lawyers, accountants, ad agencies, etc.); and corporations may donate less money these days, but they still tend to give more to their hometowns than any other place.
Kevin, I believe a lot of what you are observing here is what used to be conventional wisdom. A lot of the prestige of HQ's was related to the fact that many of those corporations were long established and had a strong identity. That was before all the mergers and what amounts to a corporate musical chairs. Meanwhile, as Boeing has proven in Chicago, HQ not longer means the large staff it once did. Boeing's move to Chicago was based more on image than jobs generated.
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Old October 4th, 2004, 06:06 AM   #9
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Boeing's move to Chicago was based more on image than jobs generated.
For now.
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Old October 4th, 2004, 06:21 AM   #10
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Quote:
Boeing's move to Chicago was based more on image than jobs generated.
Though this may be true at first, I wonder if in the future Boeing may be tempted to centralize some actual production in Chicago. Corporations are usually tempted to cut costs and some of this can be achieved by centralizing production and usually the centralization is logically expected to be around the headquarters. Assuming Boeing decides to stay in Chicago for a long time.
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Old October 4th, 2004, 07:30 PM   #11
Kevin J
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Quote:
Originally Posted by edsg25
Kevin, I believe a lot of what you are observing here is what used to be conventional wisdom. A lot of the prestige of HQ's was related to the fact that many of those corporations were long established and had a strong identity. That was before all the mergers and what amounts to a corporate musical chairs. Meanwhile, as Boeing has proven in Chicago, HQ not longer means the large staff it once did. Boeing's move to Chicago was based more on image than jobs generated.
I appreciate what you're saying, edsg25, but I purposely limited my comments to quantifiable benefits, rather than prestige, which has more to do with perceptions of importance. I agree that Chicago's motivation in paying corporate welfare to get Boeing here was driven by a need to pump up the city's image. But the original question wasn't "Are headquarters worth paying subsidies to retain for prestige?" It was "Do corporate headquarters matter anymore?"

I still say they matter for all the reasons I listed. But I keep the same proviso I put in my original answer: they matter if you don't have to give up anything to get them. I mean who would have had a problem with Boeing moving here if we hadn't given them $100 million in subsidies to do it? Sure, it's only 500 jobs, but like I said, they're mostly high-paying jobs that spin off other high-paying jobs. What's not to like about that scenario?

I also think that the number of Boeing's headquarters jobs has more to do with the nature of this business rather than the idea that corporate headquarters absolutely no longer have large workforces. Sears is a very troubled company but they still have around 5000 workers at their corporate headquarters. I'm sure that's a lot less than they once did, but it's still a very big number.

I agree with your point on corporate charitable contributions. Longstanding ties to a city are a big factor in that.
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