Another Handout to American Airlines

[cannon_fodder]

The City and State combined are giving American Airlines another $10,000,000.00 to guarantee no job losses in Tulsa.  A couple years back the city/county gave American Airlines $23,000,000.00 in Vision 2025 money to guarantee no job losses.  

The announcement said that 300 NEW jobs would be created, but AA officials were quick to 'explain' that they really meant no job losses for $10mil.
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I understand that AA is a huge contributing member of the community and a vital part of Tulsa's future.  However, why isnt ONEOK, Williams, and Quiktrip getting their money?  Why isnt the small company I work for getting a pro-rata cash check from the government, I will promise we wont fire anyone and can even guarantee we will hire more.

I have mixed feelings about this particular deal.  Since we are investing in infrastructure it may be structured in such a way that the city is guaranteed a return on investment, but we need to be much more careful about corporate welfare or being held hostage by industry.

I understand the desire to 'play ball' with all the other cities, but make Tulsa an attractive environment to do business, a great place to live that workers will flock to, and a market rich with opportunities.  Everything else will take care of itself and we can start minimizing handouts to "corporate citizens" and start attracting companies that want to be here to do business.
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Side note:  The city should implement a policy to preclude any city incentives to induce a competitor to Tulsa.  That is to say, Tulsa should never give cash incentives to a company moving to Tulsa that will be in competition with an existing Tulsa company.  If Cum and Go wanted to move corporate HQ to Tulsa we should not be in the business of giving money to them to do so: the actual result would be taking money from QT in taxes and giving it to their competitors.

The only exclusions I could see would be if similar incentives were given to the existing company.  OR if the incentives were of a non-economic nature, ie. training programs at TCC or perhaps even a TIFF or infrastructure.

No one should be forced to finance their competition.  Especially in a situation where the victim in the situation is by definition a longer term citizen of the community WITHOUT such incentives.

Bah.

[sgrizzle]

$10M is being spent to build a new hangar. It's not just a handout. Another $4.3 is being used to clean up a vacant space so Spirit Aerosystems can rent it.

[inteller]

quote:Originally posted by sgrizzle

$10M is being spent to build a new hangar. It's not just a handout. Another $4.3 is being used to clean up a vacant space so Spirit Aerosystems can rent it.

4.2 mil for cleanup?  I'll do it for $100 with 3 truckloads of mexicans.  I thought Tulsa liked that

[perspicuity85]

quote:Originally posted by inteller

4.2 mil for cleanup?  I'll do it for $100 with 3 truckloads of mexicans.  I thought Tulsa liked that

These are the kind of statements that really get us nowhere.

[DM]

quote:Originally posted by perspicuity85

quote:Originally posted by inteller

4.2 mil for cleanup?  I'll do it for $100 with 3 truckloads of mexicans.  I thought Tulsa liked that

These are the kind of statements that really get us nowhere.

Agreed. But I would expect this low statement from Inteller.

[DM]

quote:Originally posted by sgrizzle

$10M is being spent to build a new hangar. It's not just a handout. Another $4.3 is being used to clean up a vacant space so Spirit Aerosystems can rent it.

And its my understanding that the hanger is no the property of AA. So even if in the future they decide not to use it, we can find someone else for it.

[sportyart]

To me this seems like a slap in the face by the state. When they were going to be spending 120+ million to keep the automobile plant in OKC open, and now they seem like it's a huge deal to give 10 million to poor little Tulsa? Additionaly they gave 2 million to keep the rail service from Fort Worth open when we as a state agreed to give the original amount with the promise of it coming to Tulsa, which never happened. Millions of state funds keep OKC doors open and people employed yet few such dollars happen to land on the door steps of other state cities. Where was the state when we had thousands of jobs leave our city? I am surprised to be honest that we are getting 10 million.

[inteller]

what I dont understand is why this city continues to be held hostage by corps?  If they hate this place so damn much let them leave, quit giving them "stay here dollars".  Say, **** you, move if you want but you aren't getting handouts.  Look at Google, besides the electric usage reporting bill, no one gave them handouts.

The AA repair facility is making money hand over fist, and they want MORE handouts.  What a sham.

[cannon_fodder]

quote:Originally posted by sportyart

Millions of state funds keep OKC doors open and people employed yet few such dollars happen to land on the door steps of other state cities. Where was the state when we had thousands of jobs leave our city?

I have not been here long term (yet), but I have already seen this trend.  OKC is a bastion of government jobs so they have no qualms handing out cash to employers.  The problem is, many other cities in the nation are in the same boat.  Unfortunately, Tulsa is neither large enough on its own nor the darling city of the state - so it cannot afford such ventures.

The only way we can compete really, is to make ourselves attractive to business.

What's good for OKC is usually good for Tulsa, unless they are using our tax money to get it done.

In re: the $10mil, I was not complaining about the Spirit deal because it is environmental cleanup AND a guarantee of 300 good jobs.  Spirit has thus far been a good corporate citizen in their short tenure after taking over from Boeing and the deal seems square (it uses unused space that is hazardous, which falls onto the Airport to cleanup).

AA will get a full $10mil between the city and the state to not fire anyone.  That it just a ****ty deal.  IF it goes South, what is the city of Tulsa going to do with a $10mil hanger?  Especially since AA would have left at that point (since it went south) and we would have many hangers sitting around.

I hope I'm wrong, but it just seems like AA has seen its muscles flex with 2025 and is now milking us for cash.

[robbyfoxxxx]

It's corporate welfare, everybody complains about poor people taking money from the government, but in reality most government handouts go to companies.

[Chicken Little]

I guess I'm not as down on the idea in this case.  The retooling that AA has done has been very impressive...http://findarticles.com/p/articles/mi_qn4182/is_20060309/ai_n16140426

They've taken a costly item, fleet maintenance, and transformed it into a money-making operation.  They are now able to service other airlines and Tulsa is the hub for all of this activity.

They're continuing to implement their business plan, and Tulsa has become an integral part of that plan.  So, it's hard to complain.  That's my take anyway.

As others have pointed out, AA is making big capital investments at the airport, and so, even if it doesn't work out for them, the possibility for someone else stepping in and making it work is there, too.

I'm skeptical as anyone about these kind of deals.  If we could get EVERYBODY to stop with the incentives, that would be one thing.  But when is that going to happen?  But in this case it seems to have worked out alright for us.

[cannon_fodder]

I hope you're right CL.  Ever expenditure of tax payer money should be analyzed as an investment.  Let hope this one continues to pay off.  If it does, over the long run I may be proven wrong.  And I hope I am.

[Double A]

I would be skeptical of this and denounce this as corporate welfare except for one thing, the planned spaceport in western Oklahoma. If this could place Tulsa in a strategic position to dominate in this emerging market, I think it might be a worthwhile investment. If this is the case, it could be like the public investments made at the port of Catoosa. It might just pay dividends and really put Tulsa back on the map.

[cannon_fodder]

Double A: Many states has a designated space port.  New Mexico's is the only one that actually has tenants lines up with Virgin Galactic.

For some odd reason, Tulsa is getting its donkey kicked by Albuquerque in nearly every area.  Its a smaller town, with less education and a giant dust pit - but Intel adds jobs there, Tesla is going to build cars, Virgin is adding a space port - its one of the fastest growing communities in America.  I dont want to sidetrack this thread so I'll stop... if someone figures it out start a post for me.

[Conan71]

quote:Originally posted by cannon_fodder

Double A: Many states has a designated space port.  New Mexico's is the only one that actually has tenants lines up with Virgin Galactic.

For some odd reason, Tulsa is getting its donkey kicked by Albuquerque in nearly every area.  Its a smaller town, with less education and a giant dust pit - but Intel adds jobs there, Tesla is going to build cars, Virgin is adding a space port - its one of the fastest growing communities in America.  I dont want to sidetrack this thread so I'll stop... if someone figures it out start a post for me.

My guess is lots of Fed'l money goes into Albequerque and other parts of NM.  Either via direct gov't jobs or to companies with gov't business & jobs and the ancillaries which spring up around Fed'l $$$.

Oneok, Williams, & QT all do pretty well in just about any economic picture these days.  Airlines are fairly volatile.  

AA has invested a lot of their own money and done a great job converting a cost center to a profit center in a short amount of time against pretty good odds and competition.  I don't have a problem rewarding that investment with more incentives.