Boeing HQ from Chicago

Boeing HQ from Chicago

Boeing HQ from Chicago

Aircraft maker Boeing is moving its headquarters out of Chicago, 21 years after landing here in what has been hailed as a coup for the local economy.

Boeing on Thursday announced plans to move its headquarters to Arlington, Va., near the nation’s capital. He said the new location will also serve as a research center.

“We are excited to build on our foundation 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 technical and engineering talent,” said Boeing CEO Dave Calhoun. The Wall Street Journal first reported the move.

Boeing said it would maintain a significant presence at its Chicago site and 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 Gov. Glenn Youngkin and U.S. Sen. Mark Warner, D-Va., for their support. Details on local incentives were not immediately known.

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

The move brings leaders closer to federal regulators and Department of Defense officials, who are crucial to Boeing’s aviation and defense businesses.

Headquarters is only a tiny part of Boeing’s operations, with its main aircraft manufacturing still based in Seattle. But it was an important symbol of Chicago’s business appeal. Other corporations subsequently set up their headquarters in the city.

When Boeing moved here in 2001, its executives cited the Chicago location as helping it establish a more global identity. Many analysts, however, were intrigued by the strategy. The executives involved in this decision have long since left the company.

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

With its results under pressure from the pandemic and problems with its 737 Max, an aircraft whose design was implicated in two fatal crashes, Boeing in fall 2020 announced sweeping plans to cut spending. He promised to review every building and every lease, but then leaders refused to talk about Chicago’s future.

Paul O’Connor, a marketing consultant who led the local campaign for Boeing in 2001 as executive director of World Business Chicago, said the decision hurts the city’s image as an attraction for big business. businesses, especially amid headlines about crime spikes. “They were the golden hood ornament of a global city,” O’Connor said Thursday, admitting the news gave him “a twinge of sadness.”

“It was a great corporate citizen. I think they’re going to be missed in Chicago,” O’Connor said. He said city officials should ask the company, in some sort of exit interview, what factors made him leave.

O’Connor said Chicago in 2001 was a time saver for Boeing executives. They could visit Wall Street or Washington and be back home that night because of the constant direct flights. “I think there were different criteria for success when they got here,” he said.

Mayor Lori Lightfoot released a statement about Boeing that briefly mentioned the company. She pointed out that 173 businesses have moved or expanded here in the past year, including 67 since the start of 2022. “What remains true is that Chicago is a major hub for global companies who recognize our diverse workforce, expansive infrastructure and thriving economy.”

Last week, Boeing said it lost $1.2 billion in the first quarter on an 8% drop in revenue from the same period a year ago. Hit by higher costs, supply issues and production defects, the company was slow to meet demands for its new 787 jetliner. It also took a $660 million charge on its construction contract of Air Force One aircraft for the President.

Ald town center. Brendan Reilly (42nd) said Boeing’s decision was disappointing but not surprising. Reilly noted that in 2001, the city gave Boeing a $40 million tax increment funding grant under the incentive program.

“This deal just expired at the end of 2021. Obviously Boeing was able to leverage the expiration of their financial incentives from Illinois to get a better deal in Arlington, VA,” Reilly wrote in an email to the Chicago Sun-Times. “It’s disappointing to lose Boeing. But, if I was from Arlington, I’d make sure it’s a really long-term deal because the minute those terms expire, the company will leverage it for another round of taxpayer incentives. .

Ald town center. Brian Hopkins (2nd) called Boeing’s impending departure a “psychological blow” to “Chicago’s confidence as a global headquarters city.” The blow is keenly felt, especially as the city suffers from high crime and vacancies on the first retail stretch of Michigan Avenue, Hopkins said.

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

The company’s departure is also hurting the downtown office market, which is still reeling from the effects of COVID-19. Boeing owns the 100 N. Riverside Plaza building and its exit could leave it half empty, said Michael Silver, president of Vestian Global Workplace Solutions.

“We’re not done with the office market washout,” Silver said. The downtown market is heading for a record 30% vacancy rate and many high users want to reduce their space by up to 50% due to the prevalence of hybrid work-from-home schedules, he said .

When Boeing’s financial troubles deepened in 2020, transportation analyst Joseph Schwieterman, a DePaul University professor, said the company’s Chicago business didn’t grow the way some boosters had imagined. 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-headquarters company.”

He said then that the financial pressures and management issues raised by the 737 Max could force Boeing to downsize or relocate the headquarters. “Political drama creates pressure to tighten organizational hierarchy for greater accountability,” Schwieterman said.

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