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WASHINGTON/SEATTLE: Boeing Co said yesterday it will move its headquarters from Chicago to Arlington, Virginia, as the crisis-plagued US planemaker works to repair relationships with customers, federal regulators and lawmakers.

The move to Arlington – across the Potomac River from the US capital – will also include plans by Boeing to develop a research and technology hub in the area.

“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 president and CEO Dave Calhoun said.

Reuters reported last October, citing sources close to the company, that cost cuts and a more hands-on corporate culture had raised questions about Boeing’s future in Chicago, and in turn the broad direction Boeing intends to take as it tries to regain its stride.

Boeing said it will maintain a significant presence at its Chicago location and surrounding region.

Boeing has been working to repair its relationship with the US Federal Aviation Administration and lawmakers after prior CEO Dennis Muilenburg was fired in 2019 after clashing the agency over its review of the 737 MAX following two fatal crashes that killed 346 people. Boeing, a key supplier to the US Defense Department, last week unveiled more than US$1 billion (RM4.3 billion) in charges on its Air Force One and T-7A Red Hawk trainer jet programmes.

Boeing already has an Arlington office that opened in 2014 and has significant unused space. It is just blocks from Amazon’s HQ2 building that is under construction.

The Chicago headquarters – a 36-floor, US$200 million riverfront skyscraper – has also been at the crossroads of a cost-cutting campaign that has seen Boeing shed real estate, including its commercial airplane headquarters in Seattle.

Boeing moved its headquarters to Chicago in 2001, leaving its Seattle home after 85 years following its 1997 merger with St Louis-based rival McDonnell Douglas – a decision that angered rank-and-file mechanics and engineers.

Boeing was seeking a post-merger headquarters in a neutral location separate from those existing divisional power centers.

Chicago, Cook County and Illinois awarded Boeing more than US$60 million in tax and other incentives over 20 years to relocate. Those credits have expired, though Boeing was set to receive 2021 funds this year.

House of Representatives Transportation Committee chair Peter DeFazio blasted Boeing’s decision to move in Arlington.

“Moving their headquarters to Chicago and away from their roots in the Pacific Northwest was a tragic mistake,” DeFazio said. “Moving their headquarters again, this time to be closer to the federal regulators and policymakers in Washington, DC is another step in the wrong direction. Boeing’s problem isn’t a lack of access to government, but rather its ongoing production problems and the failures of management and the board that led to the fatal crashes of the 737 MAX.”

Some critics viewed the Chicago move as a symbol of a company that prized near-term profits and shareholder returns over long-term engineering dominance – a charge repeated after the 737 MAX crashes.

In another development,the head of the world’s second-largest aircraft leasing company said yesterday Boeing had “lost its way” and might need new leadership to fix a flawed culture that overshadowed its revival.

The comments by Avolon chief executive Domhnal Slattery represented a rare public rebuke of Boeing by a significant customer, albeit one that cancelled orders for over 100 737 MAX jets during the Covid pandemic.

Boeing declined comment.

“I think it’s fair to say that Boeing has lost its way,” Slattery told the Airfinance Journal conference in Dublin, a gathering of the world’s aircraft lessors who together own most of the world’s passenger jets.

“Boeing has to fundamentally reimagine its strategic relevance in the marketplace,” he said, adding that this would require “fresh vision, maybe fresh leadership”.

However, he said the issues could eventually be resolved. “I have faith that they will figure it out,“ Slattery said. – Reuters

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