Proposal: Move Headquarters From Ccy

[funguy2]

PineyBob:

I will add location of Corp. HQ to the list of management blunders. Not a big one, but certainly every penny counts (now more than ever).

And I agree... Good job to Ch. 12!

 

[Rob]

I once worked for an outfit in Crystal City and they went through a move-the-hqs drill. When all was balanced out, it looked as if they could have saved some corporate dollars, but not a huge number. The reason they decided against it was all the hot shots said they wanted to stay in Washington and would quit if the company left. Only the close-to-retirement deadwood wanted to move to some cheap retirement spot in Virginia/NoCarolina.

 

[RowUnderDCA]

With the below article, I reluctantly conceed Ch. 12's point regarding the costs of a HQ operation in the DC metro area. However, I maintain my position that

a) most of the opinion on this board is spite and an unrealistic impression of the costs of the CCY facility itself and moving is an awfully expensive gesture to make to demonstrate solidarity with the union employees ( An example: 'you cut my salary and cause me to move, darn it, you do the same!');

B) the DC economy is a moving target that has in the last 6 years gone totally insane, in terms of cost of living. So, I don't think that CCY could be faulted too much for not moving in the last few years;

c) moving would disrupt U's work force greatly and that would have been and will be very difficult for U to endure;.

d) the below article points to the difficulty that CCY has in reducing staff and management personnel salaries and not have very challenging turn over, although, I suspect that airline careers are not as hot as others.

Having said that, I have no idea whether moving would be worth it, but it trying times require risky, bold moves.

http://www.washingtonpost.com/wp-dyn/artic...2-2004Jun2.html

 

[Ch. 12]

Thanks, Pineybob, Funguy, and RowUnderDCA for seeing my point. At times I don't necessarily convey the issue clearly...glad I did this time.

And thanks, RowUnderDCA for the article. I do agree with you that emotion governs much on these boards and I can only assume (hope) that it is not representative of the masses. Unfortunately, it is the culture of the legacies in the industry and we all now how easy it is to change culture. Outside of the cost savings of relocating HDQ, I think that it would be perceived as a cultural victory as well. This is because, while I don't agree with it, there is a large mass of disgruntled employees that ignore the economics of the industry and the day that would like nothing more than to "stick it to" management. Therefore, if HDQ could move and these disgruntled individuals are alerted to the fact that mgmt is taking a ~25% pay cut, morale would go up and necessary concessions (not necessarily just wages, but at least more efficient work rule concessions) may become more available. Isn't it sick how it works? But that is the psychology of it all and if economics don't work in negotiations, maybe psychology will.

I do agree, though, that it may be too late and it would create an untimely disruption in the work force. But maybe it is the time to throw caution to the wind. Who knows what may result not only from the cost savings, but by gaining ground in the difficult-to-tackle morale issue through psychology.

I've got it! Maybe U just needs a good shrink at the top to make everyone feel good about themselves and the company. I often need one just from reading these boards!

 

[funguy2]

RowUnderDCA:

I would agree that a hasty move for the sake of moving at this time may not be the best idea.

However, when your company is BK, and you go to a judge and say, "I'm sorry, but I just can't seem to pay my bills," then I think there is a moral obligation to leave no stone unturned when reducing costs. Did US Airways negotiate a lower lease rate on CCY in BK? Maybe, I don't know. But the fact that they did not see the larger cost savings of relocating to another area concerns me. Have you ever noticed the tax incentives some localities give in order to land big new employers? I think US Airways might have been able to get the CLT and PIT communities to compete for CCY by offering tax incentives/rebates to locate to their communities. But US Airways did not even see this opportunity.

It makes me wonder what other cost-savings were missed. I am an outsider, I do not work for US Airways, so when I see an obviously missed cost-savings opportunity, it makes me wonder about the cost-savings opportunities I do not see as non-employee.

It seems to me that US Airways woefully miscalculated in BK, and did not plan their BK based on a worst case scenario. While even a year ago, it was unfathamable that oil would be $40/barrel, it seems to me that US Airways left no room for error in their BK emergence. This lack of room to accomodate error is costing US Airways dearly today.

I really do hope the transformation plan works, but time is against the company. The company should not have waited until the cash drawer says BK 2 is coming to transform themselves. I am afraid that when Ch.7 liquidation comes around, the "Transformation Plan" will look like the last straw grasped at... Much like Eastern Airlines' "100 Days" campaign (which was immediately followed by suspension of service and the BK conversion to Ch. 7).

 

[Reservation Agent]

If the airline is reducing in all other areas like streamling the schedules, eliminating some non-profitable cities, airport staff, etc..

It would make logical sense that you don't need the managerial & administrative staffing gearing for a more efficient, streamlined operation....

Have they compared the administrative staffing and salaries at JetBlue, America West & Southwest if they like to use that for other areas of the airline?

Office space in many cities are at bargain basement prices right now...