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United Airlines

UAL Corp. moving to Sears Tower in Chicago

Aug 06, 2009

UAL Corp. will move its operations center to the former Sears Tower in Chicago next year. The move will make airline company the largest private employer headquartered in the city.

The parent of United Airlines has corporate headquarters in Chicago, with operations based in Elk Grove Township, Ill., near O'Hare International Airport. Those facilities are currently only about two-thirds used, said Glenn Tilton, UAL chairman and chief executive, on Thursday. The 50-year-old facilities need $50 million to $90 million in upgrades, and their age recently has led to service interruptions at the airline.

United said it would be more cost-effective to move to a new location, and this spring began shopping around the Chicago area. On Thursday, the airline said it will move 2,800 employees to the former Sears Tower, now known as Willis Tower, beginning as early as the the second half of 2010.

Pete McDonald, United's chief administrative officer, said most employees will be willing to transfer to the downtown location, which is easily linked to public transportation. He said United isn't planning for additional hiring related to the move. While United will maintain a backup operations center away from the Willis Tower, Mr. McDonald said the Elk Grove property will be sold.

United employs 650 people at its headquarters building a few blocks away from Willis Tower.

The airline said Thursday that financial incentives offered by the city more than outweighed cheaper real-estate prices at suburban locations.

United will spend $35 million on the "buildout" in the tallest building in the Western Hemisphere, Chicago Mayor Richard M. Daley said at a news conference Thursday.

Subject to approval by Chicago's city council, UAL will get an incentive package valued at more than $25 million, including tax incentives, grants and job-training programs.

With the airline industry struggling to earn money during the recession, and industry mergers possible ahead, reporters asked Mr. Daley whether he believed that backing United is a good use of taxpayers' money. Mr. Daley didn't comment specifically on United's situation, but said he thought the airline industry should lobby for government stimulus money.

Mr. Daley has been a strong supporter of expanding Chicago's O'Hare airport, where United, along with AMR Corp.'s American Airlines, is a dominant competitor.

"The economic engine of all these cities is an airport," Mr. Daley said. "You have to be optimistic and have a vision of the future." He said the city will recoup its investment as United employees spend money on train tickets and meals and maybe even buy condominiums or rent apartments closer to work.

United, the third-largest U.S. airline by passenger traffic, last year held merger talks with Continental Airlines Inc., but later opted to form a joint venture with the Houston carrier. In the coming year, more airlines are expected to consider merger options as they face shrinking revenue and rising fuel prices.

UAL Corp. moving to Sears Tower in Chicago
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