Opinion: As Guggenheim eyes the exit, Johnson needs to rethink his message to biz
HOWARD A. TULLMAN
Bloomberg
That train we see leaving town (most recently with Guggenheim Partners jumping onboard) should be a message and a warning to our new mayor that the tech and business community exodus that started with Lori Lightfoot when she aggressively turned her back on the entire business community is moving forward at light speed.
Companies of all sizes are leaving the city and the state and voting with their feet as they seek out safer, more corporate-friendly and better-managed communities for their people and their businesses. Someone needs to reach out in a hurry to try to stem this tide, or we won’t have much of a central business district or an economy left in Chicago. But the confused and hostile messaging the mayor-to-be has promoted has done exactly the opposite of what is desperately needed.
The COVID pandemic and the largely irrevocable behavioral changes it precipitated have provided a convenient excuse for two or three different kinds of corporate action that in earlier times were simply not viable alternatives given the likely civic and political blowback that they risked.
Shrinking or entirely abandoning substantial downtown office spaces in the name of a newly liberated workforce that wants to work from home is one example. Threatening to tax those commuters who were planning to come back into the city for work is a stupid start if the goal is to rebuild a thriving central business district.
Another ongoing corporate process — not bothering to rehire entire middle-level tiers of white-collar workers — especially of a certain age — because the tasks they previously performed have been outsourced, compressed by new AI-driven tools like ChatGPT, or entirely eliminated by automation — turns out to be convenient cover for headcount shrinkage. It's also a conversion of large segments of the workforce from fixed infrastructure costs into variable and often outsourced expenses. These conversions have direct and highly attractive impacts on the bottom line. Instituting an employee head tax is exactly the worst kind of incentive we need to try to encourage new entrants and retain the few big businesses we still have.
And excusing, explaining and providing rationalizations for shoplifting and the wanton weekend trashing of city buses and police cars as well as looting of downtown stores so that we don’t “demonize” the perpetrators is an invitation to a summer full of mischief and mayhem that will help make sure downtown restaurants and hotels suffer from the tourist drought that has threatened their very existences for the last several years.
When small stores and food outlets in the Loop close their doors at 3 or 4 in the afternoon and forfeit what little homebound commuter traffic there might have been to avoid the risks of staying open, the message should be clear to even the most oblivious observers. The city’s simply not the place to be after dark. When big stores like Walmart and Target start to determine whether it even makes sense to keep stores open in certain parts of the city, we know that we are on the cusp of even more challenging times.
But to return to the ongoing departure of so many of the major firms in the city in the direct and indirect ways they are hollowing out their offices, warehouses and other activities — there’s an even bigger and far more impactful problem with their disappearance. Many of these firms were the exact organizations, enterprises and entities that funded, supported, supplied manpower to and otherwise encouraged and enhanced the very essential civic, charitable, religious and philanthropic activities designed to serve and underwrite the exact underserved populations that the new mayor says are so critically in need of assistance. As these companies, their people and focuses shift to other parts of the country, Chicago will be much the worse for their leaving in ways that simple headcount and revenue numbers can’t begin to calculate.
Howard A. Tullman is general managing partner of G2T3V, a Chicago-based investment/venture capital firm. He is the former CEO of tech incubator 1871.