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Blaming Airlines, AT&T Takes Flight

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Yesterday, while I was returning from San Francisco to Austin, AT&T was letting folks know that it plans to move its headquarters from San Antonio to Dallas. A big part of the blame was laid on the lack of direct flights to other big cities, a fact I could appreciate after my indirect, 6-hour journey home. Ironically, as technology (powered in no small part by AT&T ) allows us to innovate anywhere, the financial woes of the airline industry that lead to fewer routes make it much more productive for those who travel to live in large cities.

Sure the relocation affects only 700 out of about 6,000 jobs, and from a technology perspective, the loss of the executive and upper management jobs won’t change much for San Antonio. Few tech startups (sorry Rackable Rackspace) are located in the city. The company’s former SBC Labs (now part of AT&T Labs) is in Austin where its usability center and rows and rows of test equipment live. It also had a large presence in Dallas where many of its equipment vendors have their U.S. headquarters and offices.

Once Ed Whitacre, who relocated the company to San Antonio from St. Louis in 1992, retired, it was only a matter of time before San Antonio lost its corporate jewel. Perhaps the lack of good flights is a scapegoat to help Randall Stephenson avoid insulting San Antonio’s technology credentials. Although after a decade and a half in the city, the fact that few technology related startups grew up around one of the top 25 companies in the U.S., is a damning testament to the city and the company itself. But after a week of travel, I’m fine blaming the airlines too.

8 Responses to “Blaming Airlines, AT&T Takes Flight”

  1. Not that I am still plugged into San Antonio, Rackspace or AT&T from my years at both, but here are some thoughts:

    – I agree that tech is in a poor state in San Antonio. Rackspace has been around almost 10 years now and has spawned nothing outside of itself. The fact that AT&T never spawned tech startups is not surprising because all it housed were executives and corporate folks…these are not the folks that start anything other than their cars and coffee machines each morning before heading to work.
    – The 2 major industries in San Antonio are life science and tourism/conventions, and not that you would even know about the former. The first thing people would ask me about when I lived there was, “so how is the Riverwalk these days?”
    – The airline problem is real…you cannot get anywhere direct from San Antonio and for a major company like AT&T with offices around the world, that is a real problem. Fault San Antonio’s own for that one…spend over a billion to get a PGA Village but nothing to expand airline capacity for a city that thrives on tourism and conventions…duh!
    – The real problem in San Antonio is lack of passion. The city has no identity for businesses to even want to locate there. Rackspace stays because they are paid to stay.

    When I first moved to San Antonio and was looking for a home, everyone told me that the reason they loved it there is because of the slower pace and easier living. I think that’s great but then don’t be surprised then when industry abandons you for more business friendly environments.

    Don’t blame Randall but do like Michael Jackson says and take a look at the man in the mirror.

  2. I wonder if, under Stephenson’s leadership, AT&T will also abandon their long-standing dependency on Fleishman-Hillard for in-house PR support.

    The chairman of FH lives in San Antonio, even though the company HQ is still in St. Louis, and apparently the ongoing business relationship was closely tied to Whitacre.

    That said, given AT&T’s move into the digital media distribution arena, an old-school legacy PR firm like FH surely is ill-equipped to meet their forward-looking needs — particularly with social media expertise.

  3. Stacey Higginbotham

    Aaron, Austin can be a hard place to raise venture money thanks to AV’s utter domination of the funding market, but I’m unaware of large pools of venture money hiding out in San Antonio.

  4. I find it really interesting that you hint the city of San Antonio might be to blame. The start ups my company works with in Austin tell me that they have had a hard time raising funding in Austin. Mostly due to the money having moved to San Antonio where there is not one dominate venture firm that rules the roost (i.e. Austin Ventures). Or at least that is what I have heard that heard from 2 VC’s in Austin, an M&A guy in San Antonio, and a startup CEO in Austin.

    In my opinion, I think a big factor is that Stephenson is from Dallas… just like Whitacre is from San Antonio and moved the company accordingly.

  5. rodger

    Blame the airlines? How about years and years of poor energy policy, inadequate regulation in the oil futures market, shameful fiscal mismanagement, and Americans’ love of big SUV’s? Although I do believe we’re experiencing an oil “bubble,” I think in the long run we’ll be stronger thanks to this wake-up call.