"Hard-line approach cuts costs at Detroit Metro"

Friday, August 6, 2004

Hard-line approach cuts costs at Metro
Airport authority slashes custodian costs, hikes taxi revenue; lower
fares seen
By John Wisely
The Detroit (MI) News


ROMULUS - Two years after an appointed authority took control, Detroit
Metropolitan Airport gets high marks from passengers and experts. 

But critics argue that low-level employees are hurt by some cost-cutting
efforts and that the new Airport Authority is less open than when county
government ran the facility. 

Officials at Northwest Airlines, Metro's largest customer, commend the
authority, but won't say publicly if the new system is better or worse
than the old one. 

The authority: 

   * Will cut cleaning costs by $6 million over the next three years. 

   * Will increase taxi revenue by $3 million over the next three years.


   * Has added three new airlines. 

   * Has begun planning for a new North Terminal, which would eventually
replace the Davey and L.C. Smith terminals. 

Passenger traffic is up 6.5 percent in the first half of the year,
compared to a year ago. If traffic increases continue at current rates,
the airport could break all-time records some time next year. Those
records were set in 2000, before the travel industry bottomed out after
the September 11 attacks. 

Lower airport costs mean lower landing fees for airlines. That leads to
lower air fares by making Metro more profitable for airlines and by
attracting new carriers, said Michael Boyd, president of the Boyd Group,
an aviation consulting group in Evergreen, Colo. 

"The lower your costs, the better your chances to get more air service,"
Boyd said. "If Southwest Airlines wants to connect a few more dots, and
your costs are too high, they are going to Buffalo or somewhere else.
You are competing with a lot of other areas." 

Fliers save on fares 

When upstart Independence Air announced earlier this year that it would
offer flights from Metro to Washington's Dulles Airport for $59 each
way, Metro's largest airline, Northwest, immediately matched the fare,
saving fliers 50 percent or more over traditional fares. 

Contractors have noticed Metro's bottom-line approach. 

"The days of wink, wink, nudge, nudge are gone," said Phil Linsalata,
general manager of the Detroit Metropolitan Airport Taxi Association,
which represents the 106 taxis that serve the airport. "They are much
more interested in performance standards and fiscal responsibility than
in relationships." 

Linsalata knows first-hand. His group had the contract for the taxi
service, but when it was rebid earlier this year, the airport required
newer cabs, modern technology and hospitality training for cabbies.
Linsalata retained the contract by agreeing to the improvements and
increasing the franchise fee he pays the airport from about $78,000 a
year to more than $1 million annually. 

"They drive a much harder bargain," Linsalata said. "But that's OK.
We're going to end up with a much better service." 

Passengers pleased 

For all the controversy, the airport ranks highly with passengers. It
climbed to fourth in the world in overall customer satisfaction in 2002,
according to a survey by J.D. Power and Associates. But even airport
officials note that those numbers were largely driven by the Northwest
terminal, which opened six months before the authority took over. 

The authority has eliminated the charges of political cronyism, which
plagued the airport under former Wayne County Executive Edward McNamara.
But controversy remains. 

In the late 1990s, charges of contracting improprieties on the part of
McNamara sparked controversy, and a state Senate committee began
investigating how contracts were awarded. 

McNamara and former Gov. John Engler agreed to establish an authority to
run the airport. Under a law Engler signed, the board includes four
members appointed by the county executive, two appointed by the governor
and one appointed by the Wayne County Commission. 

Airport CEO Lester Robinson said the system works much better than the
old county system. 

Under the county, a financial item often required approval of three
committees and then the entire County Commission, Robinson said. 

"Some commissioners would create obstructions to get their way,"
Robinson said. 

The county purchasing system gave preference to businesses based in the
county. Robinson said that tended to drive away bidders from other
counties. The airport now gets bids from across the state, which
increases the competition between bidders, Robinson said. 

Checks and balances lost? 

County Commissioner Ed Boike, who serves on the authority board, worries
that some of the checks and balances were lost with the new system. He
pointed to an authority subcommittee used to select an architect for the
new North Terminal. The group narrowed the list of bidders and
recommended one to the full board, for approval at a board meeting. 

The committee's meetings weren't open to the public, and Boike has asked
for a state attorney general's opinion on whether they violated the Open
Meetings Act. 

Other board members defended the process, saying airport authority
lawyers and officials from the Federal Aviation Administration approved
it. 

One of the board's key decisions was to replace the custodian contractor
at Metro. For James Nicholson, chairman of the authority board, it was
simple math. 

The company that had the business, Omni Facility Services, employed
union workers and bid $12.1 million for the three-year contract. A
nonunion company, Knight Facilities Management, bid $5.6 million. 

"We have to take the lowest bidder," Nicholson said. "We can't just
spend another $6 million of citizens' money because there is a union
involved. The airport is being run as a business." 

Boyd said that such a move would be much more difficult at a county-run
airport, because unions could apply political pressure on decision
makers. 

Revamp brings job losses 

But all that offers little consolation to Allen Davenport, 44, who lost
his custodian job after 15 years. 

He expressed his disgust at the situation. 

Still, said consultant Boyd, "if they are willing to bring in a company
that is nonunion, in Detroit, that signals to me that they are willing
to make tough choices." 

Members of the Service Employees International Union, which represented
the custodians, have protested the decision. Dewey DeBolt, 48, of
Dearborn Heights had worked for 29 years at Metro, scrubbing toilets,
mopping floors and emptying trash cans. The contractor on the job
changed several times, but they always hired members of DeBolt's union. 

DeBolt earned $12 an hour with pension and health benefits, which
covered his wife's rheumatoid arthritis and other health problems. When
Knight Facilities took over, he was offered $8.40 an hour and would have
to wait months before any benefits would be available. He declined. 

For now, he lives on $1,200 a month he collects in unemployment and pays
$495 a month on his mortgage. His unemployment benefit runs out in
October. 

"I'm afraid to get sick," Debolt said. "I've put out a lot of
applications, but nothing has hit." 

His coworker, Davenport, said he worries about the new Knight employees
who aren't yet eligible for health benefits. Custodians at the airport
often encounter body fluids while cleaning toilets and other spills,
Davenport said. Many custodians would get hepatitis shots to protect
themselves from illness. 

"We would find needles in the toilet," Davenport said. 

Boike said the change is bad for the area as a whole. 

"We need to be providing the kind of jobs that have benefits and have a
living wage," Boike said. 

Robinson said the move made the airport more competitive. Metro now pays
$3.41 per square foot in annual cleaning costs, 3 cents less than the
median price paid by eight competing airports and well below the $8.93
it paid under the old deal. 

Union members have picketed Nicholson and other board members at their
place of business. Nicholson said the authority will take the same
approach with all negotiations. 

"They can picket until hell freezes over," Nicholson said. "As long as
this company does their job, they are going to have the business." 

Do passengers notice the changes? 

"I can't tell the difference," said Lewis Gunsberg of Denver, who flies
to Detroit often on business. 

But others said the differences go beyond bricks and mortar. 

"It really seems better organized," said Ruth Meiring of Carleton. She
visits the airport frequently to pick up her daughter, who lives in
Maine. "The attitude has changed. People are trying to be helpful. It
used to be that they didn't want to make eye contact with you."

Attached Photo's:

Custodian Elissa Woolworth cleans the Smith terminal at Metro Airport,
which dropped a contract with a firm using union workers to save about
$6 million.

Allen Davenport, 44, who lost his job as a custodian after 15 years at
Metro Airport, speaks before the Wayne County Airport Authority.

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