Spirits sank in the Mile High City on Thursday as hometown telephone company Qwest said it would be taken over by a Louisiana company, the third strike in two years for Denver after the loss of Coors beer and Frontier Airlines.
CenturyTel Inc , which is changing its name to CenturyLink, said it would buy Denver-based Qwest Communications International Inc in a $10.6 billion stock deal, combining the third and fourth-largest U.S. landline phone companies and putting the headquarters in Monroe, Louisiana.
Steve Weil, president of Rockmount Ranch Wear, the western wear maker that's had a presence in downtown Denver since the 1940s, saw a bad sign for Denver, located a mile above sea level at the foot of the Rocky Mountains.
We will be losing many high-paying jobs, and the city and state will also feel the impact in diminished tax revenues, Weil said.
What will replace those jobs locally? I know of nothing, he said, adding that phone service would suffer.
It seems like when we lose companies to out-of-state management, they lose touch and don't understand the local market that well, agreed Marlene Hodges, 74, a Denver-area real estate investor.
You get minimal service and increased prices for the service or product - you just don't feel that loyalty anymore, she said.
Frontier Airlines and Coors were both based in the Denver area. Frontier was bought by Indianapolis-based Republic Airways Holdings Inc last year and MillerCoors, a joint venture which includes the original Denver area-based Coors, in 2009 opened its headquarters in Chicago.
On top of that, Denver lost one of its two dailies, the nearly 150-year old Rocky Mountain News, when it closed last year.
Despite highly publicized woes including the insider-trading conviction of former Qwest CEO Joseph Nacchio and scrutiny by government regulators, the regional phone carrier managed to retain its identity, said Gary Horvath, research manager for the University of Colorado at Boulder's Leeds School of Business.
Even with Qwest's problems, its brand has held up very well, said Horvath.
Colorado Gov. Bill Ritter issued a statement saying he was disappointed in the loss of the telephone carrier, which is Colorado's sixth-largest private employer with nearly 8,000 workers. But he put a bright face on the change.
This transaction, in an ever-changing telecommunications industry, could lead to long-term stability for the vast majority of Qwest employees, retirees, customers and shareholders, Ritter said.
(Reporting by Keith Coffman; Editing by Peter Henderson)