SEATTLE, Oct 7 (Businesshala) – Twenty years ago, just days before the 9/11 attacks on the United States crippled the aerospace industry, The Boeing Company (BAN) moved its headquarters from its historic Seattle manufacturing center to a Stylish was relocated to downtown Chicago. skyscraper.
The move was central to Boeing’s plan to carve out a new identity as a diversified global juggler, remove top executives from daily operations inside remote business units, and get closer to Wall Street and key customers. .
Two decades later, in the midst of a fresh crisis that has rocked the industry, Boeing’s corporate hub is in limbo.
A new crop of top executives based primarily on the coasts are managing industrial and safety certification problems in their major divisions and the 737 MAX and the coronavirus crisis sluggish. At the same time, the tax incentives imposed on Boeing by Chicago and Illinois expire at the end of the year.
Once the epitome of a new Boeing, the vision of a corporate epicenter rising above its component parts has fallen apart with the imperative to regain engineering dominance and repair relationships with customers and federal regulators.
For example, Chief Executive Dave Calhoun began the year dealing with production-related defects at Boeing’s factory in South Carolina that have affected the program, people familiar with the matter said.
Other top executives, such as newly minted CFO Brian West, are also based primarily on the US East Coast and have landed a specialized but functional top floor, although the pandemic has also been a major factor, the people said.
“It’s a ghost town,” said one of the people.
The headquarters — a 36-floor, $200 million riverfront skyscraper — sits at the crossroads of a cost-cutting campaign that has seen Boeing shed real estate, including its commercial airplane headquarters in Seattle.
Many close to the company say that cost cuts and a more pragmatic corporate culture have raised questions about Boeing’s long-term future in the city, and that in turn Boeing intends to take a broader direction as it resumes its progress. tries to get from.
Boeing, however, insists that critical operations are still taking place there and has dismissed any suggestion that the giant could abandon its Midwest base. “Chicago is strategically important to Boeing’s US and global operations,” a spokesperson said.
“Like other companies, we have embraced hybrid ways of working amid the global pandemic to connect with our people, and our customers and other stakeholders.”
Boeing said Boeing and employees have invested nearly $50 million in support of Chicagoland communities in recent years.
Despite the new focus, others moving out of the city would be at risk of a local firearm and would stay away from Boeing’s immediate priorities amid industrial and regulatory problems.
Boeing left its Seattle home after 85 years in 1997 to merge with St. Louis-based rival McDonnell Douglas—a decision that angered rank-and-file mechanics and engineers.
Boeing was seeking post-merger headquarters in a neutral location separate from those existing divisional power stations.
But some critics see Boeing’s Chicago move as a symbol of a company that has delivered near-term profits and a return on long-term engineering dominance to the shareholder – an allegation repeated after the crash of the 737 MAX jet. In 2018 and 2019, 346 people took their lives.
“It started out as a way to signal that they would invest in the future regardless of any legacy loyalty,” said Teal Group analyst Richard Aboulafia. “For some people, it has become simply a way of indicating that they will not make any investments in the future.”
Chicago, Cook County and Illinois awarded more than $60 million in tax and other incentives over 20 years to relocating Boeing. Those credits have expired or will expire at the end of the year, although Boeing will receive the 2021 funds next year, the spokesperson said.
The incentives, which were temporarily swept up in a trade dispute with Europe’s Airbus over mutual claims of undue support, required Boeing to keep 500 full-time employees in the office.
A city spokesman said Boeing reported 513 full-time employees for 2020 in Chicago.
Boeing also employs thousands of people in Chicago and the Metro East area near St. Louis in southern Illinois, the state spokesman said.
But last year analysis by the Better Government Association, which examines decisions from the state of Illinois, found that Boeing fell short of the 500-employee mark in at least four years.
“The numbers reported by the company to state and city vary, have never been audited, and have fallen short of the public target in some years,” it said.
Pam McDonough, a former director of the Illinois Department of Commerce and Community Affairs, said in a LinkedIn article last year that the indirect impact of Boeing employees in the Chicago area was estimated at $4.3 billion over 20 years.
“These large projects are complex and strategic but result in tremendous benefits, both financial and civic.”