United plan could leave city holding $100M bag
By Marilyn Adams, USA TODAY
Near Indianapolis Airport, a once-bustling United Airlines facility soon=20
will be a 1.7 million-square-foot white elephant. The Indianapolis=20
Maintenance Center was the crown jewel of United Airlines' respected=20
maintenance program: a 24-hour, state-of-the-art facility for complex=20
"heavy" maintenance on single-aisle Boeing and Airbus jets. In its heyday=20
in the late '90s, the center employed almost 3,000 people. It was a source=
=20
of civic pride for Indianapolis, which outbid nearly 100 cities to get the=
=20
7,500 high-paying jobs that United promised would be there by 2004.=20
Indianapolis and Indiana shouldered most of the $540 million project cost.=
=20
Now, with United parent UAL in bankruptcy court and the nation at war, city=
=20
and state officials in Indianapolis are learning how high a price=20
communities can pay when big companies they woo run aground.
United has announced it is closing the center for a few months to cut=20
costs, but the closure could well be permanent. In a bid to slash=20
maintenance costs, United has negotiated labor contract changes with its=20
mechanics union that would let the airline contract out all heavy=20
maintenance work and shut the Indianapolis and Oakland centers where United=
=20
mechanics perform that work. The agreement would require only United's San=
=20
Francisco maintenance base to remain open. Members of the International=20
Association of Machinists (IAM) will vote on the controversial changes=20
April 29. If they vote no, United's lawyers will ask a bankruptcy judge for=
=20
his blessing to break the old IAM contract.
So Indianapolis, along with Chicago, Denver and many other communities=20
where United has facilities and owes money, is now a creditor in bankruptcy=
=20
court. Indianapolis claims it is owed as much as $100 million for United's=
=20
failure to create the 7,500 jobs agreed to as a condition for the=20
investment. "Ten years ago, no one questioned United Airlines," says Melina=
=20
Maniatis Kennedy, Indianapolis' economic development director. "Any city=20
would have vied for 7,500 jobs." Opened in 1994, the center was Indiana's=20
"most significant economic development project of the '90s," recalls Mark=20
Moore, the state's chairman of transportation finance. "Our expectation was=
=20
that this was a good investment."
So it seemed then. "It was a state-of-the-art facility for the whole=20
industry," says United spokesman Joe Hopkins. "It was well lit, spacious,=20
clean. When this was designed, we sent a team around to other large plants,=
=20
like Saturn, to learn best practices. It was a showplace." Government=20
assistance helped United in two ways. Indianapolis and Indiana sold bonds=20
to finance about 60% of the project. But United also was never charged real=
=20
estate taxes on the property, which is airport land. At one time, the=20
company lauded the Indianapolis center as a model of productivity and=20
economic efficiency compared with its other maintenance centers in San=20
Francisco and Oakland. Annual ground rent to the airport authority runs=20
about $697,000, a fraction of the company's cost in California. United's=20
rent payments are current, but local officials seem more concerned about=20
idling thousands of highly skilled mechanics amid the recession, perhaps=20
permanently. "The real impact for us is the loss of jobs," Kennedy says.
Only a few hundred workers and a couple of Boeing 737s remain. By early=20
May, the center will close. United had told workers they were being placed=
=20
on unpaid leave because of the war. But after the International Association=
=20
of Machinists sought a court injunction, the airline agreed to pay=20
mechanics a severance and consider transfers to another United facility.=20
Officials haven't written off United Airlines. City and state leaders have=
=20
been aggressively pressing Indianapolis' case with United executives. One=20
hope is that if United launches a low-fare airline as it has proposed, it=20
will maintain those jets in Indianapolis. Officials say the $100 million=20
claim is negotiable. "United has not been forthcoming, which is very=20
frustrating," Kennedy says. "It's difficult to believe they are making=20
decisions based on hard data. We're kind of scratching our heads."=20
Indianapolis Mayor Bart Peterson has appointed a committee to court other=20
tenants for the mammoth complex in case the airline leaves for good. But if=
=20
what was once the world's biggest airline cannot fill it up, it's not clear=
=20
what could right now. "We're incredibly disappointed in their decision to=20
close the facility," Moore says. "At some point, we will be in a position=20
to re-let it."
United's maintenance centers
United maintains its aircraft in three major facilities around the USA.=20
Under a tentative agreement with the mechanics union, centers in=20
Indianapolis and Oakland could be closed.
San Francisco
United's largest maintenance center at San Francisco International Airport=
has:
129 acres of land
3 million square feet of floor space
12 aircraft hangar docks
3,610 employees{1}
Indianapolis
United's Indianapolis Maintenance Center has:
300 acres
1.7 million square feet
12 hangar docks
3,000 employees{1}
Oakland
United's maintenance center at the Oakland airport has:
44 acres
380,000 square feet
4 hangar docks
684 employees{1}
1 =97 as of Dec. 31; Source: UAL 10-K report for 2002 to Securities and=20
Exchange Commission
***************************************************
The owner of Roger's Trinbago Site/TnTisland.com
Roj (Roger James)
escape email mailto:ejames@xxxxxxxxx
Trinbago site: www.tntisland.com
Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/
Steel Expressions www.mts.net/~ejames/se/
Site of the Week: http://www.carstt.com
TnT Webdirectory: http://search.co.tt
*********************************************************