Boeing to move headquarters to Arlington,VA.

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JWM

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I have two grandsons at Boeing in the Seattle area. The company made a huge mistake by moving the executive offices away from the assembly plants. Then came the outsourcing of the MCAS software for the Max. Next was trying to assemble the 787 in an area that had zero tech base to save money. Now, another executive move to D.C. No wonder Airbus keeps growing.
 

jis

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I have two grandsons at Boeing in the Seattle area. The company made a huge mistake by moving the executive offices away from the assembly plants. Then came the outsourcing of the MCAS software for the Max. Next was trying to assemble the 787 in an area that had zero tech base to save money. Now, another executive move to D.C. No wonder Airbus keeps growing.
Frankly, Boeing still appears to be floundering, unable to actually fix the root cause of many things that undermine it. Looks like now they have decided to see if being close to Washington can help to sweep the malady under the carpet by political manipulations, or at least that would be the cynical interpretation 🤷‍♂️ which jibes with their public statements on the matter.
 
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Actually in my mind the move to Chicago in the first place did not make any sense unless it was implementing a "get the heck out of Seattle to aynwhere where we can get a good deal for the moment", as the guiding principle.
While it was good for us (and bad for us and a slap in the face to da Mare now that they are leaving) it did seem to me that it was to get away from labor unrest that might have gotten personal for some execs - and quite possibly, just that someone high up with good persuasion powers wanted to live in Chicago?
 

rickycourtney

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Being in Washington puts them in close proximity to their cash machine.

Any time it looks like Boeing might lose a federal contract... it will be easy for top execs (up to and including the CEO) to go "press the flesh" in the White House, the halls of Congress, or the corridors of the Pentagon.

This is a tacit admission that -- between the 737 MAX fiasco, the bumpy 787 rollout, major customer defections, the inability to launch a new "middle of market" airliner, and the totally botched merger with Embraer -- they're rapidly losing ground to Airbus in the commercial aircraft space.

The space division is also getting its clock cleaned by SpaceX -- the Falcon is a much less expensive launch vehicle compared to the aging Delta, and the Dragon is running circles (orbits) around the Starliner which has still yet to have a successful test flight.
 
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This makes no sense to me. This is the exact opposite of what they ought to do if they are going to change the location of their corporate office.

I find this announcement very odd in light of the announcement this week that the Justice Department had reached a deal with Boeing. No criminal conduct by Boeing executives over the 737 MAX issues/accidents, but Boeing has been fined $2.5 billion.

This news has a "strange odor" about it in my opinion.
 

Devil's Advocate

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The biggest repercussion seems to be that regulators are finally pushing back on faults instead of rubberstamping business decisions. Unfortunately the move to DC seems intended to help sway regulators and stakeholders rather than address root causes. They may be named Boeing but we're really talking about the ghost of McDonnel Douglas.
 
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Being in Washington puts them in close proximity to their cash machine.

Any time it looks like Boeing might lose a federal contract... it will be easy for top execs (up to and including the CEO) to go "press the flesh" in the White House, the halls of Congress, or the corridors of the Pentagon.

This is a tacit admission that -- between the 737 MAX fiasco, the bumpy 787 rollout, major customer defections, the inability to launch a new "middle of market" airliner, and the totally botched merger with Embraer -- they're rapidly losing ground to Airbus in the commercial aircraft space.

The space division is also getting its clock cleaned by SpaceX -- the Falcon is a much less expensive launch vehicle compared to the aging Delta, and the Dragon is running circles (orbits) around the Starliner which has still yet to have a successful test flight.

I don't disagree with your thinking. It's been disappointing to learn of the number of their business segments that have not been making a profit. But, does this corporate move make sense unless it is for political reasons?

How much money is going to be spent to move from Chicago to Arlington, Virginia? This amount plus the large fine they are now obligated to pay----couldn't that amount of money be used better by the company?

Boeing's stock price has recently been trending down. Not yet at the low we saw in 2020, though.
 

rickycourtney

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I'll also point out -- there's a reason why the predecessor companies to today's Lockheed Martin and Northrop Grumman got out of the commercial aircraft industry to focus on the defense industry...

You get to build high-profit margin equipment, at huge price tags, under deadlines that are very "squishy."

Add to that, when you get into things like building missiles, you're likely to get few warranty requests when the item sits in a warehouse for a decade and then doesn't work perfectly the one time it's used and also destroyed.
 

rickycourtney

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Unfortunately the move to DC seems intended to help sway regulators and stakeholders rather than address root causes.
I didn't think about that in my first reply, but you're absolutely right. The top brass will also be in much closer proximity to "press the flesh" at FAA Headquarters.

How much money is going to be spent to move from Chicago to Arlington, Virginia? This amount plus the large fine they are now obligated to pay----couldn't that amount of money be used better by the company?
The cost of the move is a drop in the bucket that is the company's 200+ billion dollars in annual operating expenses. That cost goes down if they're getting tax credits from the city they're moving to (they probably are). Add to that, they're in a leased building in Chicago, and it's been almost exactly 20 years since they moved in... so they're probably "up" on their lease.

A recent Reuters article said that the Chicago HQ has largely been a "ghost town" for the last couple of years as execs spent most of their time in Washington.
 

rickycourtney

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Another thought -- the original move to Chicago was largely seen as a pointless blunder.

It came in the years after the merger with McDonnell Douglas -- and amid some of the nastiest battles with the union employees. So it gave the company a chance to move away from its home and angry employees in Seattle and the home of McDonnell Douglas in St. Louis.

The move also put a lot of distance between the company brass and the engineers in Seattle. A lot of people have pointed to that as a contributing reason for the 737 MAX and 787 issues.

But picking Chicago was a headscratcher. The company has no historical ties to the city, it's not our country's financial powerhouse (New York) or political epicenter, and it's not home to a major customer (except United). They seemed to pick it because it was cheap and centrally located.
 
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I'll also point out -- there's a reason why the predecessor companies to today's Lockheed Martin and Northrop Grumman got out of the commercial aircraft industry to focus on the defense industry...

You get to build high-profit margin equipment, at huge price tags, under deadlines that are very "squishy."

Add to that, when you get into things like building missiles, you're likely to get few warranty requests when the item sits in a warehouse for a decade and then doesn't work perfectly the one time it's used and also destroyed.

And when your cost overruns become egregiously high, no problem, the Federal government compliantly writes more checks.
 

Deni

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While it was good for us (and bad for us and a slap in the face to da Mare now that they are leaving) it did seem to me that it was to get away from labor unrest that might have gotten personal for some execs - and quite possibly, just that someone high up with good persuasion powers wanted to live in Chicago?
I'm curious why you think it was good for us. I see no benefit we got form Boeing being here and we gave them a truckload of cash. They didn't really even provide much in the way of jobs since they moved employees from Seattle.
 
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I'm curious why you think it was good for us. I see no benefit we got form Boeing being here and we gave them a truckload of cash. They didn't really even provide much in the way of jobs since they moved employees from Seattle.
Several hundred high paying jobs came from Seattle which creates a exponential number of other jobs as well as the fact that a prestige company chose to locate in Chicago. People who actually work in corporate situations are very concerned about them leaving and what that could mean for the already stressed downtown job market.
 
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Another thought -- the original move to Chicago was largely seen as a pointless blunder.

It came in the years after the merger with McDonnell Douglas -- and amid some of the nastiest battles with the union employees. So it gave the company a chance to move away from its home and angry employees in Seattle and the home of McDonnell Douglas in St. Louis.

The move also put a lot of distance between the company brass and the engineers in Seattle. A lot of people have pointed to that as a contributing reason for the 737 MAX and 787 issues.

But picking Chicago was a headscratcher. The company has no historical ties to the city, it's not our country's financial powerhouse (New York) or political epicenter, and it's not home to a major customer (except United). They seemed to pick it because it was cheap and centrally located.
Chicago gave them $$$$ incentives, and those obligated them to stay for 20 years. That time is coming to an end.
 

Saddleshoes

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Caterpillar moved their corporate HQ to Chicago (from Peoria) soon after Boeing.
That move was a head scratcher too.
Maybe Cat has a move in store too.
 

TWA904

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Dallas and Denver were considered. Chicago paid United $60 million over 20 years that is now ending. Boeing wanted to forge a new identity and to be closer to major customers. Moving the headquarters to Arlington will also put them closer to the US headquarters of Airbus.
 

Deni

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Several hundred high paying jobs came from Seattle which creates a exponential number of other jobs as well as the fact that a prestige company chose to locate in Chicago. People who actually work in corporate situations are very concerned about them leaving and what that could mean for the already stressed downtown job market.
I think if the company had just moved here without any sort of public money pledged you'd have a point. But with the level of taxpayer money extorted from the city and the state there really hasn't been a net positive for Chicago. (Also, right after the deal they moved their corporate jet operations to Gary, taking jobs that used to be at Midway Airport). We paid a lot of money for a fairly limited number of jobs.
 

Trogdor

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Customers? More like customer. United is the only major airline based in Chicago.

They had already dropped their “all-Boeing” strategy in 1992.

United dropped their “all-Boeing” fleet strategy in 1931 with the introduction of the Ford Tri-Motor. At no point in the jet era has United ever had an all-Boeing fleet.
 

BCL

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United dropped their “all-Boeing” fleet strategy in 1931 with the introduction of the Ford Tri-Motor. At no point in the jet era has United ever had an all-Boeing fleet.

I specifically remember the Sioux City, IA crash in 1989. That was most definitely a DC-10.
 
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