Global Aviation Leadership Summit

The Chicago Council on Foreign Relations held its first Leadership Summit April 21 on the topic, "Moving the World: Global Aviation and the Global Economy." The goal of the Summit was to bring together industry leaders, senior policymakers and experts from Chicago and around the globe, to underline the ties between the Chicago and global economies, and to highlight issues crucial to both of these economies.

This Summit, organized by the Council's Corporate Program, focused on the issues confronting global aviation and provided recommendations for its future. About 100 leaders spent the day discussing such issues as globalized aviation, the challenges of airline consolidation and competition, the role of governments and the importance of deregulation, the problems of the air cargo industry and its future, and the specific situation of O'Hare, the most vital airport both to Chicago and to the nation.

Two grand themes dominated. The first was the need for further liberalization of restrictive U.S. laws to let American carriers compete against foreign super-carriers. The second was the need for infrastructure modernization, including the O'Hare Modernization Program, to make O'Hare and other U.S. airports globally competitive.

Glenn F. Tilton, the chairman, president and CEO of United Airlines gave the first keynote address in which he called for an end to outdated U.S. regulation of the airline industry, particularly regulations that prevent mergers and foreign investment that could enable American airlines to compete in an era of super-carriers, leaving them at a great competitive disadvantage. American carriers have lost more than $30 billion since 9/11, at a time when carriers everywhere else have had the freedom to remake themselves into profitable airlines.

Samuel K. Skinner, former Secretary of Transportation, told the Summit luncheon that more than one billion people will fly for the first time in their lives in the next decade, and that U.S. domestic travel will triple. American carriers can capture this growth but, "there will be competition for that growth and it will be substantial. And it won't just be from one country. It will be from all over the world."

To compete, Skinner said, American carriers need reform of outdated rules, but are so fixated on current crucial problems, such as fuel prices and pension burdens, that they haven't been able to focus on long-term reform.

The other keynoter, Michael L. Ducker, executive vice president of FedEx, joined the call for increased liberalization in the aviation industry. He suggested this could be done by introducing liberalization to the booming cargo sector first, followed by the rest of the industry.

The final session focused on Chicago. The question of infrastructure loomed large—especially the O'Hare Modernization Program. The program, aimed at keeping O'Hare maximally flexible to meet any change in air traffic needs, could create 185,000 jobs and pump an added $18 billion into the regional economy, according to Rosemarie S. Andolino, executive director of the program.

This Summit was co-sponsored by United Airlines, FedEx Express International, A.T. Kearney and The Boeing Company, and was co-organized by the J.L. Kellogg School of Management at Northwestern University, the University of Chicago's Graduate School of Business, and World Business Chicago. Glenn F. Tilton chaired the Summit. Michael L. Ducker and Justin Zubrod, vice president of A.T. Kearney, were the vice chairs.

--J.D. Bindenagel
Summit Organizer

For more information about the Leadership Summit or the Chicago Council on Foreign Relations, please email J.D. Bindenagel at jdbindenagel@ccfr.org.

Chicago's Growing Economy: Semi-Annual Highlights

A variety of companies have moved their offices to downtown Chicago over the first half of this year. These relocations are the result of a strong trend in which our downtown has become a magnet for world-class talent, therefore also a magnet for companies. The following are some highlights of organizations that decided to relocate or expand their businesses downtown or to surrounding areas. World Business Chicago (WBC) is working with a number of other companies and expects this list to grow significantly in the next few months.

CNA Insurance provides property and casualty insurance protection to more than one million businesses and professionals in the U.S., Canada and Europe. WBC worked with Mayor Daley and the Department of Planning and Development (DPD) to keep 3,000 jobs downtown in the East Loop.

TTX Co. provides railcars and related freight car management services to the North American rail industry. Along with the Mayor and DPD Commissioner Denise Casalino, Chicago retained the company's headquarters along with its veteran workforce of 275 people. The 120,000 sq. ft. lease deal at 101 N. Wacker Dr. was the largest downtown lease deal in the first quarter of 2005.

GNX is an e-business solution and service provider for the global retail industry that brought its global headquarters and 140 jobs of B2B GlobalNetXchange to 200 W. Monroe St. from Silicon Valley. Chicago beat out New York, San Francisco, D.C. and Cincinnati for its business. GNX—founded by eight of the U.S. and Europe's largest retailers—simultaneously merged with Worldwide Retail Exchange (WWRE), and the combined company will be headquartered in Chicago.

Think or Swim is, according to Barron's, one of the nation's top five online exchanges. The 140-person staff provides web-based options trading tools and position analysis. WBC worked with the City and State to bring this company's headquarters to 600 W. Chicago (formerly the Montgomery Ward building on the river).

The Revere Group is a global business and technology consulting company from Deerfield, IL. WBC helped relocate the group's headquarters and 150 jobs to 325 N. LaSalle, the Reed Murdoch Building downtown.

Jump Trading is an electronic proprietary trading company that signed a long-term lease at 600 W. Chicago. In partnership with the Chicagoland Chamber of Commerce, WBC helped retain 75 jobs while adding 25 new ones to the payroll of this company.

In introducing the JP Morgan Chase real estate leadership team to DPD Commissioner Casalino and Building Commissioner Stan Kaderbeck, it became clear that the predicted job losses of the Bank One-Chase merger had not materialized. Furthermore, Citadel had acquired 300,000 square feet and two state-of-the-art trading floors at 131 S. Dearborn (Bank One Center).

Chicago Chocolate Company created a confection shop, distribution center and 14 jobs at 800 W. Randolph St. This South Bend, IN company is working to create an additional 80-100 jobs from a 100,000 sq. foot manufacturing plant that is currently in the discussion stages.

Destiny Healthcare is moving its 200-person customer-driven health insurance company to 200 W. Monroe from Oak Brook in order to access the concentration of IT and other sophisticated talent concentrating downtown.

Other Metro Developments
Sara Lee Corporation is a global manufacturer and marketer of high-quality, brand-name products for consumers worldwide. During its transformation from a holding company to an operating company, Sara Lee moved its headquarters to the former Spiegel building in Downers Grove, IL. The company's move was an attempt to retain 50 percent of its existing and transferring staff from the suburban St. Louis and suburban Cincinnati division headquarters. Of the 250 jobs in the City, 180 will move to Downers Grove; 300 existing jobs in Rolling Meadows will move to Downers Grove; and 450 new jobs will move from Cincinnati and St. Louis. A consumer product R&D facility that would employ 100 is also likely to follow.

Pfizer Inc. is the world's largest research-based pharmaceutical company. WBC initiated a two and a half year collaboration between the State, the Village of Skokie and iBIO, which resulted in Cleveland-based Forest City agreeing to buy and redevelop both the Searle facility and its globally unique product lab facility. Village Tax Increment Financing (TIF) really made this happen.

Workforce Centers Join WorkNet Chicago

Economic development in Chicago requires planning, cooperation and action. Lagging industries need to be analyzed and the shortage of critical skills must be identified. Training is required to accomplish these tasks. While the perfect fit exists it is not dictated from a single point of view, but rather fostered by the community.

The most recent innovation at the Mayor's Office of Workforce Development (MOWD) addresses these concerns with a pilot program, which creates industry-specific sectoral workforce centers.

As part of the 2005-2006 Workforce Investment Act Program Year, a special class of service providers was designated to address the shortage of critical skills and respond directly to the needs of Chicago's business community.

Through extensive collaboration, MOWD and the Chicago Workforce Board (CWB) identified several high-demand and high-growth business sectors, which help workers with specialized skills realize their full potential.

The three categories included in the April 2005 request for proposals were Retail, Hospitality and Customer Service; Transportation, Warehousing and Logistics; and Manufacturing. A variety of responses were submitted but after careful consideration, the decision was made to create workforce centers in the areas of Retail, Hospitality and Customer Service as well as in Manufacturing.

The new sectoral workforce centers aim to be "one-stop shops" for both employers and job seekers. The centers were modeled after the same template that created the six existing Chicago Workforce Centers, which successfully served over 150,000 Chicagoans in 2004 alone.

Those seeking employment have access to skill training, resume workshops, job counseling and other resources while employers gain access to a pool of job seekers. In addition, manufacturing companies have access to information on the labor market, pre-screening opportunities for their employees, and they can find out more about business development programs such as TIFWorks and the Employer Training Investment Program.

This type of services specialization is not unprecedented for MOWD and it's citywide service provider network, Mayor Daley's WorkNet Chicago. In previous years there have been several initiatives targeting special populations as an integral part of Request for Proposals (RFPs).

A key difference between a sectoral workforce center and a non-industry specific center is the industry advisory board. While other workforce centers and agencies respond to general trends in Chicago's business landscape, sectoral centers have a board made up of industry leaders who respond more quickly to the needs of their industry. As the shortage of critical skills becomes a more prevalent issue in today's labor market, this demand-side model—while new to Chicago—is a developing trend.

The goal of MOWD and Mayor Daley's WorkNet Chicago has always been to create positive results for job seekers and businesses. By bringing these groups under one roof, a process that was once no more precise than an ad in the classifieds can be measured, analyzed and refined until a perfect fit is found. Development of the workforce centers is scheduled to begin this summer and they should be fully operational come fall.

--Adam Yoffe
Assistant Director of Communications, MOWD

For more information on sectoral workforce centers and the full range of services provided by the Mayor's Office of Workforce Development, contact Adam Yoffe at (312) 746-7123 or at ayoffe@cityofchicago.org.

Chicago by the Numbers

World Business Chicago
177 N. State Street, Suite 500
Chicago, Illinois 60601

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