United Airlines to bring 1,300 jobs to Chicago

AP News
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Posted: Jun 10, 2011 1:58 PM
United Airlines to bring 1,300 jobs to Chicago

United Airlines announced Friday it was bringing 1,300 more jobs to downtown Chicago, in stark contrast to the owner of two major futures exchanges in the city who suggested they might relocate from Illinois because of the state's business tax.

Airline chief Jeff Smisek said they considered all the costs involved in doing business, including the state corporate income tax, when deciding to move the operations and technology jobs to Chicago from other cities in the vast United system after its recent merger with Continental.

"We're looking out not today but to the future and certainly with the mayor and city administration we think the future is a bright one and we believe the state will follow because the state needs to follow and it's very clear the state needs to follow. We believe that Illinois will become more competitive over time," Smisek said at a press conference with Mayor Rahm Emanuel.

But at least one company may not want to wait. CME Group, which owns the Chicago Mercantile Exchange, the Chicago Board of Trade and the New York Mercantile Exchange, said this week it was studying a possible relocation because of the state's business tax, although it could still retain some operations in Illinois.

To help deal with a massive budget deficit, Illinois in January raised its corporate tax rate from 4.8 percent to 7 percent and the personal income tax rate from 3 percent to 5 percent. That enticed other states, including New Jersey, Indiana and Wisconsin, to try to poach Illinois businesses.

The new United jobs will relocate by the end of next year, although they are largely filled because people are moving, and they bring the number of United jobs in downtown Chicago to a little more than 4,000, Smisek said.

Emanuel said Chicago is an aviation leader in part because it's home to United, Boeing and O'Hare International Airport.

"I'm going to keep that competitive edge," Emanuel said.

Smisek said no financial incentives were given to United to move the additional jobs, although it has received tax incentives for roughly 2,800 other jobs in Chicago. The jobs are relocating from Houston, San Francisco and other places, Smisek said.

Illinois Gov. Pat Quinn praised United's decision to bring jobs to Illinois. Quinn issued a congratulatory statement because he didn't attend Emanuel's press conference with Smisek at the Willis Tower, where the airline has offices.

"I thank United Airlines for its continued commitment to the state of Illinois and the city of Chicago as we continue our economic recovery," Quinn said.