Boeing moves its headquarters from Chicago to Arlington, Virginia.

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Boeing is moving its headquarters from Chicago to Arlington, Virginia, a sign that the aerospace giant is tilting its military wing and better positioning it to wade into the political quagmire.

The move, first reported by the Wall Street Journal, comes as Boeing struggles to shrug off the financial burdens from the 737 Max, the pandemic’s stifling impact on travel and the fallout from severing ties with Russia. The company reported a loss of $1.2 billion in the first quarter. Its stock is down 25 percent year on year so far.

“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 technical talent,” Boeing CEO David L. Calhoun said in a statement Thursday. .

The company insisted it would “maintain a significant presence” in Chicago and the surrounding area despite the move. Boeing also plans to develop a research and technology center in the region to “harness and attract engineering and technical capabilities,” according to the company’s statement. The hub will focus on developing innovations in cybersecurity, autonomous operations, and quantum science. and Software and Systems Engineering.

Governor Glenn Yongkin (right)’s administration has been working for the past two months with Boeing to lure the company into the country, according to three people familiar with the deal who spoke on condition of anonymity because the company was planning to wait. Until next week to announce. They said the governor, a former Carlyle Group executive, had a personal relationship with Calhoun.

According to the three people, the state did not offer Boeing any “significant” financial incentives.

A person familiar with the negotiations said Senator Mark R. Warner (Democrat from Virginia) was also working for several months on persuading Boeing to move to Virginia.

“For competitive reasons and to protect confidential company information, we cannot comment on current or potential economic development prospects,” Arlington County spokeswoman Jessica Baxter said in a statement. Katie Kristol, chair of the Arlington County Board of Directors (Democratic), also declined to comment.

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The move comes as Boeing has faced intense scrutiny from the Federal Aviation Administration in recent years, a shift that came after lawmakers noted the close ties between regulators and the company after the crash of the 737 Max in 2018 and 2019. This relationship, however, could raise concerns. Frontline employees in engineering and manufacturing, who previously raised concerns about overstepping safety issues by company executives and senior FAA officials.

Boeing moved its Defense, Aerospace, and Security division headquarters from St. Louis to Arlington in 2017. The company currently operates a large office in Arlington’s Crystal City neighborhood, less than a mile from the Pentagon and at the edge of the local area. Officials dubbed it the “National Landing.” Amazon is building a second headquarters – also several blocks away – that is supposed to anchor development in the area.

Boeing’s move to Arlington confirms the expectations of many national landing boosters, who have said Amazon’s arrival in the region would spur economic growth in a neighborhood that has long been considered untapped and undeveloped. Following a 2005 Federal Committee recommendation to relocate defense contractors, Crystal City lost approximately 17,000 military and defense workers who occupied approximately 4 million square feet of office space.

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As part of the push to create a high-tech corridor at National Landing, Virginia Tech plans to construct a new engineering campus in Alexandria’s Potomac Yard. Last year, Boeing donated $50 million to the school for financial aid and various other initiatives, and university leaders also said they plan to work closely with the airline on student projects and career initiatives.

Ed Pearson, a former former manager of the 737 plant in Renton, Washington, told of the company’s plans to relocate, and said his “stomach fell.” He said it will be important for executives to stay in touch with manufacturing operations in the Seattle and South Carolina area.

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“My immediate reaction was that Chicago was too far away, and the thought that it was going to go so far was amazing,” said Pearson, who filed to Congress as a whistleblower after the accidents.

Much of the FAA’s interest is focused on the 787 Dreamliner, which is manufactured in South Carolina. Aircraft quality problems have accumulated and Boeing has halted deliveries of aircraft to customers.

The company said when it released quarterly earnings last week that it had submitted paperwork to the Federal Aviation Administration (FAA) that would pave the way for deliveries to begin again, but it remains unclear when regulators might give their approval.

An investigation into Max accidents by the House Transportation Committee pointed to Boeing’s 1997 merger with rival McDonnell Douglas and subsequent move to Chicago as a sign of a shift in the company’s core philosophy, focusing less on engineering prowess and more on financial success. The panel noted that Boeing’s profit-chasing was the reason it decided to develop the Max to compete with Airbus’ new planes, rather than opting for a more expensive and difficult – but potentially safer – approach to designing a new plan from scratch.

On Thursday, Committee Chairman Rep. Peter A. DeFazio (Democrat) said moving the company’s headquarters to the metropolitan area was “another step in the wrong direction.”

“Boeing’s problem is not the lack of access to government, but the ongoing production problems and management and board failures that led to the fatal 737 Max crashes,” DeFazio said in a statement. Making safe planes — not putting pressure on federal regulators and Congress.”

Boeing moved its global headquarters to Chicago in 2001, but the Commercial Airplanes division remains headquartered in Renton, Washington, outside of Seattle, where the company was founded in 1916. The move signified Boeing’s efforts to establish itself as a global aviation power, bringing it closer to clients and investors on Wall Street.

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In 2020, Boeing executives indicated they were looking to relocate from a 36-story, $200 million riverside skyscraper, which one worker described as Reuters It’s a “ghost town”.

Peter Rousselot, leader of the civic group Arlingtonians for a Sustainable Future, said the company’s move to a northern Virginia suburb would be a “net positive” for the county of about 240,000 people.

He said the county has a large office vacancy rate — about 20 percent, depending on the neighborhood — and that an influx of more office workers could help reduce that number. For comparison, average office occupancy in the nation’s 10 largest urban business centers was more than 43 percent as of May 2, according to the data Supervised by Castle Systems.

Traditionally, Arlington has relied on a 50-50 split between commercial and residential property tax revenues to fund county services, although that percentage has changed: In calendar year 2022, business taxes made up about 46 percent. “It’s not going to magically change that,” he said, “but it’s a good move in that sense.”

But Rousselot, whose group advocates more calculated growth in Arlington, also said the county’s lack of long-term planning means it is impossible to gauge how the influx will affect roads, sewers and schools. (ASF has called on the province to develop a long-term financial plan and operating forecast for a 10-year budget.)

“The truth of it [the new Boeing headquarters] It is likely to generate more and more residents and employees which means it will put more pressure on the county.” “We don’t know what the net effect will be, but it will be a concern because of these infrastructure services.”

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