Boeing, Boeing, Gone

Boeing Co. stunned its hometown Wednesday by announcing it will move its corporate headquarters away from Seattle, where it was founded 85 years ago.

Chairman and Chief Executive Officer Phil Condit said Boeing is considering sites in Chicago, Denver and Dallas-Fort Worth for a new corporate center. The company's massive commercial jet manufacturing plants will remain in the Seattle area, as will much of its research and development work.

At most, Condit said reorganization would affect about 1,000 workers out of nearly 80,000 employed in the Puget Sound region.

Condit said the reason for the move is to save money and give it a headquarters central to its operations, now spread over 26 states.

As part of the reorganization, Condit also is promoting the heads of Boeing's three major divisions – commercial airplanes, military aircraft and missiles, and space and communications – to chief executive officers, with the goal of giving those divisions more autonomy and encouraging them to grow.

The new CEOÂ's are Alan Mulally at Commercial Airplanes in Seattle, Jerry Daniels at Military Aircraft and Missile Systems in St. Louis, and Jim Albaugh at Space and Communications at Seal Beach, Calif.

Condit said the decision was made six months ago and announced Wednesday as the company begins actively seeking a new corporate site.

The headquarters needs "to be in a location central to our operating units, customers and the financial community – but separate from our existing operations," Condit said.

"This is a fundamental strategic decision," he added. The goal is "what's best for the corporation."

Condit said a factor in choosing the new location will be tax and other economic considerations the candidate cities might offer.

Business leaders in the cities the company is considering were salivating at the idea of Boeing putting down roots in their area.

The head of a Chicago area business group said it would be a coup for the city and would make sense for Boeing, reports Regine Schlessinger of CBS radio station WBBM.

"Their two largest customers—both American and United—are the dominant carriers here, with over 900 flights a day," said Jerry Roper, president and CEO of the Chicagoland Chamber of Commerce.

Boeing was founded in Seattle in 1916 by timber scion William Boeing, who initially built wooden seaplanes. The company defined the city and its culture for much of the 20th century. Its plants built the bombers that helped win World War II; its designers invented the jetliners that revolutionized global travel; its international prestige gave the city its claim as a hub of the Pacific economy.

But mergers in the 1990s, involving longtime rival McDonnell Douglas and the space divisions of North American Rockwell, helped spread its operations nationwide.

Boeing employs 78,400 people in the Seattle area and is the state's largest private employer. Worldwid, it has 198,900 workers, with major operations in St. Louis and Southern California.

The announcement shocked community and labor leaders.

"I am surprised and deeply sorry to see any part of the Boeing Company leave Washington state," said Gov. Gary Locke.

"While the bulk of the Boeing family remains with us, to lose the corporate leadership of this company leaves a void in our economic and cultural life."

"We feel that Boeing is part of the Pacific Northwest and part of the fundamental character of the community," said Craig Buckham, president of the company's white collar union, the Society of Professional Engineering Employees in Aerospace.

"For 85 years, it has been the heart and soul of the Pacific Northwest culture and economy."

Boeing hopes to choose its new corporate site by early summer and have operations functioning there by fall. It expects the new center will have fewer than half the 1,000 employees currently working in Seattle. The other 500 employees may be absorbed by other business units, Condit said, though he added there may be layoffs.

"I don't think they will be significant in number," he said.

Roberta Pauer, regional economist for the state Department of Employment Security, said that if Commercial Airplane's extensive manufacturing, engineering, design and administrative operations here are untouched, "then I think it is a reasonably minor event for Puget Sound from an economic standpoint."

"It would mean they are simply taking the tiniest portion of the ... administrative triangle and moving that," she said.

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

"The job loss isn't the issue," Pauer said. "The job loss is negligible. ... But the prestige factor is going to be what smarts."

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