Thursday, November 19, 2009

2nd Big Trade Show Leaves To Save Cash

Although I fully support the right of workers to organize, we cannot escape the immutable law of capital - business and jobs will flow away from locations that offer higher costs and regulatory burdens. In this case, high costs and inflexibility imposed by unions have driven two major conventions away from McCormick Place. Adios tax dollars.

2nd big trade show leaves to save cash

'A VERY SERIOUS LOSS' Daley demands more from unions

November 18, 2009


A plastics trade group announced Tuesday that it is leaving Chicago's McCormick Place Convention Center for Orlando to save up to $20 million.

The SPI: Plastics Industry Trade Association cited "lower costs, simpler work rules and more flexible logistics" that would help the show draw more participants and allow larger, more elaborate exhibits.

It's the second major trade show in two weeks to say it's leaving Chicago. The announcement set off a cascade of events. Mayor Daley demanded yet another round of concessions from McCormick Place unions to cut trade-show operating costs.

Hours later, officials of the Metropolitan Pier and Exposition Authority, also called McPier, which runs McCormick Place, announced a task force will start meeting today to come up with ways to make Chicago a more competitive destination for conventions.

"It's a very serious loss," Daley said. "It's a major show. They were very upset with a lot of the rules and regulations that . . . McCormick Place has. When I met with the [trade show association] president and others, they were very concerned about the cost factor compared to Orlando, Atlanta and Vegas."

McPier CEO Juan Ochoa vowed that "everything will be on the table," but none of the McPier, tourism and union representatives at the announcement offered concrete action plans, and they even raised the idea of seeking an operating subsidy from the cash-strapped state or the city.

Chicago Federation of Labor President Dennis Gannon said the unions will "work a little bit harder" to see that Chicago stays competitive.

Why would electrical costs for one booth for one exhibitor be $4,000 in Orlando, where the trade group previously had a show, and $40,000 in Chicago? Those numbers were quoted by the sponsor of the Healthcare Information and Management Systems Society show, which announced last week it's moving from Chicago to Las Vegas.

David Causton, general manager at McCormick Place, didn't deny the numbers, but said that electrical service prices vary widely depending on the type of extra work needed to set up a booth. In Chicago, he said, union electricians install trusses and exhibit lights as they have historically done. In Orlando, such work might be handled by stagehands, he said.

"I think there is a misunderstanding" about price differentials," he said.

Ochoa said Chicago operates at a disadvantage because its rivals' convention centers receive government subsidies, and McCormick Place does not. It might also seek debt-service restructuring, he said.

The task force gave no timetable for action except to prepare a proposal for the spring legislative session.

Already facing a downturn in convention and tourism business, McPier announced a 20 percent cut in its work force earlier this week. Last year, McCormick Place used $19 million in state sales tax revenue to cover its debt obligations after tourism taxes fell short. This year, McCormick Place faces a projected deficit of $34 million.

No comments:

Post a Comment