Boeing HQ Departure from Chicago

Aircraft maker Boeing is moving its headquarters from Chicago, 21 years after landing here in what has been described as a coup against the local economy.

Boeing said Thursday it plans to move its headquarters to Arlington, Virginia, near the nation’s capital. She said the new site will also serve as a research center.

“We are excited to build on our organization here in Northern Virginia. The region makes strategic sense for our global headquarters given its proximity to our customers and stakeholders, and its access to world-class engineering and technology talent,” said Dave Calhoun, CEO of Boeing. Journal this step for the first time.

Boeing said it would maintain a significant presence at its location in Chicago and the surrounding area, but did not provide details. “We greatly value our ongoing relationships in Chicago and throughout Illinois. We look forward to maintaining a strong presence in the city and state,” Calhoun said.

Calhoun thanked Virginia Governor Glenn Youngkin and US Senator Mark Warner, a Virginia Democrat, for their support. Details of the local incentives were not immediately known.

Boeing had about 500 employees in Chicago at its 100 in Riverside Plaza headquarters, but the number of people there has fallen dramatically during the pandemic.

The move brings executives closer to federal regulators and Department of Defense officials, who play a critical role in Boeing’s aerospace and defense business.

The headquarters is just a small part of Boeing’s operations, as it remains the primary aircraft manufacturing headquarters in Seattle. But she was an important symbol of Chicago’s business allure. Then other companies brought their headquarters to the city.

When Boeing moved here in 2001, its executives cited the Chicago location as helping it create a more global identity. But many analysts are baffled by the strategy. The executives who were involved in this decision have long since left the company.

About $61 million in state and local incentives emerged from the move, as Chicago won a competition against Dallas and Denver. These incentives have largely expired.

With its results under pressure from the pandemic and problems associated with the 737 Max, whose design has been implicated in two fatal accidents, in the fall of 2020, Boeing announced sweeping plans to cut costs. She promised to look at every building and rent, but the executives refused to talk about the future in Chicago.

Paul O’Connor, the marketing consultant who in 2001 led Boeing’s local campaign as CEO of World Business Chicago, said the decision hurts the city’s image as a leader for big companies, particularly amid headlines about rising crime rates. “They were the decoration of the gilded hood of a world city,” O’Connor said Thursday, allowing the news to give him a “pain” of grief.

“They were a great corporate citizen. I think Chicago will miss them,” O’Connor said. He said city officials should ask the company in some sort of exit interview what motivated it to leave.

O’Connor said that 2001 was a time saver for Boeing executives. They could visit Wall Street or Washington and still be home that evening due to the constant direct flights. “I think there were different criteria for success when they first came here,” he said.

Mayor Lori Lightfoot issued a statement about Boeing that briefly mentioned the company. She confirmed that 173 companies relocated or expanded here in the past year, with 67 companies doing so since the start of 2022. “We have a strong pipeline of major corporate relocations and expansions, and we expect more announcements in the coming months,” she said. . “What remains true is that Chicago is a major hub for global companies that recognize our diverse workforce, extensive infrastructure, and thriving economy.”

Last week, Boeing announced that it lost $1.2 billion in the first quarter due to an 8% decline in revenue compared to the same period last year. Affected by high costs, supply issues and production flaws, the company delayed fulfilling orders for the new 787 passenger jet. It also required $660 million in fees on its contract to build Air Force One for the president.

Downtown Ald. Brendan Riley (42nd) said Boeing’s decision was disappointing but not surprising. Riley noted that in 2001, the city gave Boeing $40 million in funding aid to raise taxes as part of the stimulus package.

“This agreement just expired at the end of 2021,” Riley wrote in an email to the Chicago Sun-Times. “It is clear that Boeing was able to take advantage of the expiration of its financial stimulus in Illinois to get a better deal out of Arlington, Virginia.” “It’s disappointing to lose Boeing. But, if I’m from Arlington, I’ll make sure it’s a very long-term deal because the moment those terms are up, the company will take advantage of that for another set of taxpayer incentives.”

Downtown Ald. Brian Hopkins (II) described Boeing’s impending departure as a “psychological blow” to the city’s “Chicago confidence as an international corporate headquarters”. The blow was being felt, Hopkins said, especially as the city suffers from high crime rates and vacancies in the prime retail stretch of Michigan Avenue.

He added that “legitimate questions remain” about whether Chicago “got its money’s worth” from the lucrative stimulus package that lured Boeing here.

The company’s departure is also hurting the downtown office market, and it continues to suffer the effects of COVID-19. Boeing owns the 100in Riverside Plaza building, and its exit may leave half of it empty, said Michael Silver, president of Vista Global Workplace Solutions.

“We are not done with the office market crash,” Silver said. He said the downtown market is heading towards a record vacancy rate of 30% and many large users want to reduce their space by up to 50% due to the prevalence of hybrid work-from-home schedules.

When Boeing’s financial problems worsened in 2020, transportation analyst Joseph Schwitterman, a professor at DePaul University, said the company’s activities in Chicago had not developed in the way some backers had envisioned years ago. “They planted their roots in the city, but their soul is still in Seattle,” he said. “They’ve always had the aura of a two-headed company.”

He then said the financial pressures and administrative issues raised by the 737 Max could force Boeing to downsize or move the headquarters. “The political drama creates pressures to tighten the organizational hierarchy for greater accountability,” Schwittermann said.