Boeing Takes Flight From Seattle

S E A T T L E, March 22, 2001 -- Boeing Co. stunned its hometown byannouncing it is moving its headquarters out of Seattle, where theaircraft manufacturing giant was founded 85 years ago.

Chairman and Chief Executive Phil Condit said Wednesday Boeing isconsidering Chicago, Denver and Dallas-Fort Worth. It hopes tochoose the site by early summer and have it running by fall.

Condit said the move is intended to save money and give theworld’s No. 1 maker of passenger jets a headquarters central to itsoperations, now spread over 26 states.

Hundreds of Layoffs, But No Plant Closures

The company’s huge jet manufacturing plants will remain in theSeattle area, as will much of its research and development work.

Condit said less than half the 1,000 employees working at itsSeattle corporate center will be moved to the new headquarters. Theothers will be transferred to other departments or may be laid off,he said.

The announcement shocked community and labor leaders.

While the move might not have a major economic impact onSeattle, Mayor Paul Schell and Gov. Gary Locke publicly pleadedwith Boeing to reconsider.

“I will do all I can to help them change their minds,” Schellsaid.

“I am surprised and deeply sorry to see any part of the BoeingCo. leave Washington state,” Locke said. “While the bulk of theBoeing family remains with us, to lose the corporate leadership ofthis company leaves a void in our economic and cultural life.”

Washington State’s Top Private Employer

Boeing is Washington state’s biggest private employer, with78,400 people in the Seattle area alone. Worldwide, it has 198,900workers, with operations in St. Louis, Southern California andRidley Park, Pa.

It was founded in 1916 by timber scion William Boeing, whoinitially built wooden seaplanes.

The company defined Seattle and its culture for much of the 20thcentury. Its plants built the bombers that helped win World War II;its designers invented the jetliners that revolutionized globaltravel; its international prestige gave the city its claim as a hubof the Pacific economy.

But its operations became more far-flung in the 1990s as Boeingabsorbed longtime rival McDonnell Douglas and the space divisionsof North American Rockwell.

Move Part of Reorganization

The headquarters needs “to be in a location central to ouroperating units, customers and the financial community — butseparate from our existing operations,” Condit said.

As part of the reorganization, Condit also is promoting theheads of Boeing’s three major divisions — commercial airplanes,military aircraft and missiles, and space and communications — tochief executive officers, with the goal of giving those divisionsmore autonomy and encouraging them to grow.

Boeing’s white-collar union, the Society of ProfessionalEngineering Employees in Aerospace, expressed regret over thedecision to move.

“We feel that Boeing is part of the Pacific Northwest and partof the fundamental character of the community,” said CraigBuckham, union president. “For 85 years, it has been the heart andsoul of the Pacific Northwest culture and economy.”

Residents expressed worry that the loss of Boeing’s headquarterscould leave a void.

“I’ve had better days,” said Peter Donnelly, president of theCorporate Council for the Arts in Seattle. “Boeing is our largestContributor — $400,000 a year. The surprise here is clearly very,very, very profound.”

Psychological Message: Boeing Can Evolve

Analyst Robert Toomey at Dain Rauscher-PCG in Seattle said themove might benefit Boeing because it puts the company closer to theheadquarters of major domestic carriers. He also said it showsBoeing is willing to evolve.

“It sends a psychological message that they’re breaking fromthe past and changing the way of doing things,” he said.

Although Seattle long has been considered Boeing’s company town,the area diversified in the late 20th century with the addition ofMicrosoft and other high-tech companies, and the expansion of theUniversity of Washington and the myriad research and biotechcompanies it has spawned.

“The job loss isn’t the issue,” said Roberta Pauer, aneconomist for the state Employment Security Department. “The jobloss is negligible. But the prestige factor is going to be whatsmarts.”

Shares of Boeing fell $1.15 Wednesday to $53.85 on the New YorkStock Exchange.