Monday, May 03, 2010

If You Can't Fly Continental, Try To Have A Nice Trip

Before long, former Continental Airlines employees will join former Houghton Mifflin and Harcourt workers in the unemployment lines.

It's been announced that Continental and United Airlines are going to merge. The new company will be...United Airlines.

The new company's headquarters will be in Chicago, where United is already headquartered. Plans already in the works to consolidate United's corporate offices in Sears Tower will go ahead, which would likely indicate less need for cubicle space in Houston.

Not that Houston will be shut down completely. As usually happens in a merger, the company being acquired bears the brunt of the downsizing pain. Besides, Houston is hot and the city's not as attractive as Chicago. Doesn't have a bean-shaped sculpture or a Frank Gehry designed band shell, either.

Some office space in Houston will be needed because the merged airline will be bigger and someone who knows something about Continental will be needed to handle business that will be new to United.

There's more to it than that, from a bean counting perspective, however.

Officials in Houston will put together a package of tax incentives and other inducements to convince the merged entity that it would be cheaper to do business in Houston. As for Chicago, they've already done all sorts of shady deals with United, a few years ago when Mayor Daley set out to lure United from the suburbs into the city where corporations have to pay a head tax on each employee.

So, Houston, what have you got that's better? United has gained Continental Airlines hubs, planes and employees. Have they also picked up a bargaining chip? Texas versus Illinois in a no-holds-barred cage match, and the winner gets to host the expanded United Airlines.

There's a lot of tax dollars to be won, and all United has to do is pit one state against the other to reduce their operating expenses.

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