What the Heinz/Kraft Merger Means

This week’s announcement of the merger between Kraft Foods and Heinz has made Pittsburgh civic leaders a bit nervous, and for good reason. After watching what 3G Capital did to slash overhead with its acquisition of Heinz 19 months ago, leaders should expect significant executive layoffs and reorganization to consolidate operations. While that should be better news for Pittsburgh than Chicago – where Kraft has an impressive corporate campus – there is one significant factor that could make a higher-cost headquarters in Chicago more desirable: air travel.

As the Wall Street Journal reported Wednesday, Chicago has dozens of direct flights to destinations around the world daily, including 3G’s home country of Brazil. Pittsburgh’s only current year-round international flight is to Toronto. The disparity of serving 216 cities daily versus 35 from PIT, gives Chicago the kind of edge that the Allegheny County Airport Authority has been fighting to regain after USAirways reneged on its promise to maintain its flights.

Let’s hope that lower costs for commercial space and much lower costs of living win the day because it seems unlikely that 3G will maintain “co-headquarters” for very long.

Following up on some recent projects of interest, Burchick Construction was awarded the contract for the Victoria Street parking garage by UPMC, a $9 million structural renovation. Google selected Perkins Eastman for the design of its interior fit-out in the Bakery 2.0 office building. Gurtner Construction was awarded the general trades portion of the new $7 million Ross Township public works garage complex. Rycon Construction was the low bidder on the Cathedral of Learning Suite 910 renovation at $419,000, beating out TEDCO at $448,000 and A. Martini & Co. at $461,800.

Massaro CM Services is in the process of putting three North Allegheny schools out to bid as part of the $22 million program to upgrade the Marshall Middle and Elementary School, and the Bradford Woods School. The projects are due April 9, 14 and 17. In Ohio, the new $30 million Canton South High School is out to bid.

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