First Coors, then Frontier, now Qwest – three iconic Colorado companies weakened by clueless management, mountains of debt, and the ‘creative destruction’ of capitalism.
After CenturyTel completes its proposed all-stock acquisition of Qwest towards the end of this year, Colorado’s signature company will simply disappear. Eight thousand Coloradans are currently employed by Qwest, including 2,600 who work at the company’s 53 – story headquarters building in downtown Denver.
Make no mistake about it-this is a takeover, not a merger. CenturyTel shareholders will own 50.5 percent of the merged company, and the new company’s CEO, COO, CFO will come from CenturyTel, as will a majority of the new board.
Will there be layoffs? Company execs are spouting the usual clichés about ‘realignment’ and ‘refocusing’, and ‘new synergies’, but of course there will be. CenturyTel is a lean, conservatively managed landline company headquartered in Monroe, a mildly picturesque northern Louisiana backwater. Situated 78 feet above sea level, Monroe’s population is less than 55,000. Denver, 5,280 feet above sea level, has a population of more than 610,000.
And here are some more facts and figures (taken from Wikipedia, so you may want to apply the traditional grain of salt!).
“The median income for a household in (Monroe) was $25,864, and the median income for a family was $33,263. Males had a median income of $31,840 versus $22,352 for females. The per capita income for the city is $15,933. About 26.3 percent of families and 32.3 percent of the population were below the poverty line, including 45.3 percent of those under the age of 18 and 21.6 percent of those 65 and older.
The (Denver) median household income is $41,767, and the median family income is $48,195. Males have a median income of $36,232 versus $33,768 for females. The per capita income for the city is $24,101. 14.3 percent of the population and 10.6 percent of families are below the poverty line. Out of the total population, 20.3 percent of those under the age of 18 and 9.7 percent of those 65 and older are living below the poverty line.”
Median family incomes are 50 percent higher in Denver. Twice as many families live below the poverty line in Monroe, including one third of the population.
In a rational world, Qwest would take over CenturyTel. But bad management decisions crippled the company and left it helpless to fend off the thrifty southern predators.
So what will CenturyTel do with Qwest, its high-paid employees, and its glittering headquarters?
They’ll get rid of the employees, move headquarters to Monroe, sell the building, and quietly exit Denver.
Denver’s real estate market will suffer for a while, as will the charities and non-profits that Qwest and the Qwest Foundation supported so strongly for many years. The radiant blue Qwest sign will be turned off, and the building’s new owners will seek other tenants.
And Qwest might think of adopting a new motto: “Things to do in Denver when you’re dead.”