Saturday, May 28, 2022

Boeing will move its headquarters from Chicago to the DC area

The Boeing Company said Thursday that it will move its headquarters from Chicago to the Washington, DC, area, where company executives will be closer to key federal government officials.

The company said it will use its campus in Arlington, Virginia, as its new headquarters, and plans to develop a research and technology center in the area.

“The region makes strategic sense for our global headquarters, as it provides close proximity to our customers and stakeholders and access to world-class engineering and technical talent,” said Boeing CEO David Calhoun.

The move marks a victory for Republican Governor Glenn Youngkin of Virginia, who campaigned last year on a promise to bring new businesses and jobs to the state.

“The decision to call Virginia home demonstrates that the Commonwealth is a prime location for aerospace companies,” Youngkin said in a statement. “I look forward to working with Boeing to attract even more talent to Virginia, especially given its reputation for engineering excellence.”

Youngkin retired in 2020 as co-CEO of private equity giant Carlyle Group. He was personally involved in discussions about the move and had a prior business relationship with Calhoun, who was also an executive in the investment industry, according to a person familiar with the matter who went public to discuss the move. was not authorized.

A spokesman for Virginia’s Economic Development Agency said the project would not receive any state incentives, nor would it receive any from Arlington County, a spokesman there said.

Boeing is a major defense contractor, and the move will bring officials closer to Pentagon leaders. Rival defense contractors including General Dynamics, Lockheed Martin and Northrop Grumman are already based in the DC area.

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Company officials will also be with the Federal Aviation Administration, which certifies Boeing passenger and cargo planes.

Boeing’s relationship with the FAA has been strained since the fatal crashes of its best-selling aircraft, the 737 MAX, in 2018 and 2019. It took nearly two years for the FAA to approve the design change and allow the plane to return – far longer than Boeing expected. Air. Certification of new Boeing aircraft will also take longer.

The company has faced financial setbacks in manufacturing refueling tankers for the Air Force. And it has been hurt by the pandemic, which curtails travel and demand for new planes. Boeing lost $1.2 billion in the first quarter of this year.

Boeing has its roots in the Seattle area, and has assembly plants in Washington state and South Carolina. The company moved its headquarters to Chicago, also known to have Dallas and Denver, in 2001 after an unusually public search.

Ca von Rumohr, an aerospace analyst at Cowen, said there were advantages for Boeing to move its headquarters back to the Washington, D.C., area — or Seattle, where the leader would again be closer to the company’s critical commercial operations.

“Chicago does nothing for them,” said von Rumohr.

According to a regulatory filing, Boeing had 142,000 employees at the end of 2021, including 12% based outside the United States. The filing did not say how many work in Chicago.

Richard Aboulafia, an analyst with advisory Aerodynamic Advisory, said Boeing’s Chicago work force is “minimal,” making the move easier.

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Boeing said it would maintain a presence in Chicago and the surrounding area and did not say how many additional employees would begin operating in Virginia.

Peter DeFazio, chairman of the House Transportation Committee that investigated Boeing and the FAA after the Max crash, criticized Boeing’s move to be closer to federal policymakers.

“Boeing should focus on building safer airplanes, not lobbying federal regulators and Congress,” he said.

Meanwhile, many Virginia elected officials celebrated the news.

Democratic State Senate Majority Leader Dick Saslav called it “one hell of a catch”.

Democratic US Sen. Tim Kaine, a member of the Senate Armed Services Committee, said Boeing’s decision was a testament to Virginia’s skilled workforce and strong national security community.

US Sen. Mark Warner, a Virginia Democrat and a former entrepreneur and investor, indicated that the deal had been in the works for quite some time.

“For more than a year, I’ve been making my case to Boeing’s senior leadership that Virginia would be a great place for its headquarters, and at the end of last year, I was pleased to learn that my efforts were successful.” He said in a statement.

In an interview, Warner said he thought the new headquarters would cement Virginia’s prominence as a home for businesses, but the research and technology center could also have a long-term economic impact.

The company statement thanked both Youngkin and Warner.

Boeing will be following in the footsteps of Amazon, which decided to set up a second headquarters in Arlington. Last month, local officials approved Amazon’s plans to build a 350-foot helix-shaped building,

Boeing’s decision was first reported by The Wall Street Journal.

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