Eric M. Johnson

SEATTLE, (Reuters) – Boeing (NYSE:) Co. moved its headquarters 20 years ago from Seattle, where it was a historic manufacturing facility, to a modern Chicago skyscraper.

This was a key part of Boeing’s new plan to be a global juggernaut that is diversified and diverse. It disengaged top executives from daily operations in far-flung units and brought them closer to Wall Street, major customers, and the Wall Street.

Boeing’s corporate center is still in disarray after two decades.

The new generation of high-ranking executives is based mostly on the coasts. They manage safety and industrial certification issues at the major divisions, as well as the ongoing fallout from the coronavirus and 737 MAX crises. The year ends with the expiration of tax incentives that Boeing and Chicago received from Illinois.

Once the emblem of a brand new Boeing, today the idea of a central corporate hub rising above all its parts is at odds with the necessity of engineering dominance being restored and the repair of relationships with customers as well federal regulators.

For example, the Chief Executive Dave Calhoun was at Boeing’s South Carolina plant to address production-related issues that could have hindered the program. This is according to sources familiar with the matter.

Others, such as the newly-minted CFO Brian West are also based on the U.S. East Coast. A hushed atmosphere has fallen on the functional but exclusive top floor. However, people stated that the pandemic was also a factor.

One of the residents said, “It’s just a ghost-town.”

It is a 32-story, $200m riverfront skyscraper that sits at the heart of an ongoing cost-cutting campaign. This has led to Boeing shedding real estate in Seattle, as well as its headquarters for commercial aviation.

Many people familiar with the matter say that cost cutting and an emphasis on corporate culture has raised concerns about Boeing’s future and the direction it intends to go as it seeks to get back to its roots.

Boeing insists that significant operations continue to take place in Chicago and denies any suggestion the company may move out of its Midwest headquarters. According to a spokesperson, Chicago was strategically vital for Boeing’s U.S. as well as global operations.

“As other companies have done, we’ve adapted to hybrid working methods in order to interact with our employees, customers, and all other stakeholders.

Boeing reported that Boeing employees and Boeing invested close to $50 million in Chicagoland’s communities over the past few years.

However, some caution that leaving the city could cause a firestorm. Boeing is not currently focusing on the immediate issues. There are also a number of regulatory and industrial challenges.

    NEUTRAL LOCATION

    Boeing left 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 wanted a new headquarters post-merger in neutral territory, away from existing power centers.

However, some people saw Boeing’s Chicago maneuver as a sign of a company who valued near-term profits above long-term engineering supremacy. The charge is repeated after the 2018 and 2019 crashes of 737 MAX aircraft that claimed 346 lives.

Teal Group analyst Richard Aboulafia stated that it was a signal to future investors that the company would not be bound by legacy loyalty. To some it is a sign that they are not making any further investments.”

    INCENTIVES EXPIRING

    Chicago, Cook County and Illinois awarded Boeing more than $60 million in tax and other incentives over 20 years to relocate. The spokesperson stated that those credits are now expired, or will be expire by year end. However, Boeing will still receive funds for 2021 next year.

Boeing was forced to hire 500 people full-time by Boeing because the incentive, which Boeing temporarily took up with Europe’s Airbus due to mutual claims for unfair support, had to be suspended.

According to a spokesperson from Chicago, Boeing has reported that Chicago had 513 full-time workers in 2020.

A spokesperson for the state said that Boeing employs many people in Chicago, and in the Metro East area in southern Illinois close to St. Louis.

The Better Government Association examined Illinois’ state policies last year and found that Boeing had not met the minimum 500 employees mark for at least four consecutive years.

According to it, “Numbers reported from the company to state and city are different, have never been audited and in some year fell below the public target.”

Indirect impact of Boeing workers in Chicago had been estimated at $4.3 billion for 20 years. This was according to Pam McDonough (ex-director of the Illinois Department of Commerce and Community Affairs), in a LinkedIn post last year.

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