Boeing Will Move Headquarters From Chicago To D.C. Metro Area

Topline

Boeing will shift its corporate headquarters from Chicago to Northern Virginia, the company said Thursday, moving its top leaders away from the midwestern city that has hosted them for two decades and closer to federal regulators.

A Boeing 737 MAX jet lands following a Federal Aviation Administration test flight in Seattle on … [+] June 29, 2020.

AFP via Getty Images

Key Facts

Boeing said in a press release its existing campus in Arlington, Virginia—across the Potomac River from D.C. and near the Pentagon—will become its global headquarters, and it also plans to build a “research and technology hub” in Northern Virginia.

The company didn’t specify how many executives will be based in the D.C. area, but it pledged to keep roughly 500 employees at its Chicago headquarters when it first moved there two decades ago, a miniscule share of the 142,000 workers employed by Boeing worldwide as of last year.

Boeing may get some workforce incentives from Virginia, according to the Wall Street Journal, which first reported the planned move, but it isn’t expected to secure massive government perks (in a statement Thursday, Boeing thanked Virginia Gov. Glenn Younkin “for his partnership”).

The aviation company’s Defense, Space and Security division is already headquartered in Arlington, Virginia.

Boeing said it will still “maintain a significant presence at its Chicago location,” though it will need less office space.

Crucial Quote

“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 technical talent,” Boeing CEO David Calhoun said in the press release.

Key Background

Boeing first moved its executives to Chicago in 2001, leaving the Seattle region, which had been the aerospace giant’s home for decades and is still where most of its commercial airplanes are produced. Boeing accepted a 20-year package of tax incentives from Chicago and Illinois officials, but the move was also seen as a way to reposition the company—which had merged with its onetime rival McDonnell Douglas four years earlier—as a broader conglomerate rather than a primarily commercial plane-focused firm. The shift to the Washington, D.C., area comes at a crucial time for Boeing’s relationship with regulators: The Federal Aviation Administration and lawmakers have closely watched Boeing since 2019, when all of the company’s 737 MAX jets were ordered out of the sky for over a year due to a flight control design flaw tied to two fatal crashes. Former FAA Administrator Steve Dickson told Congress in November Boeing had improved but still had “more work to do” on safety monitoring, and the FAA has pledged closer scrutiny of 787 Dreamliner production amid quality control issues. Also, the families of 737 MAX crash victims are pushing a federal court to toss out a 2021 agreement in which the Justice Department agreed not to prosecute Boeing for fraud.

Tangent

The move to the D.C. area also positions Boeing’s executives even further from Seattle. The company has gradually shifted away from Washington state: Last year, Boeing moved all 787 production from the Seattle area to South Carolina, leaving its massive unionized factory in the Seattle suburb of Everett half-empty.

Surprising Fact

In recent months, Boeing executives have spent less time in Chicago and more time on the East Coast, with Calhoun spending part of the year in South Carolina to deal with production problems on the 787 program, Reuters reported in October. An unnamed source told Reuters that Boeing’s downtown Chicago high-rise was “a ghost town.”