Boeing moving corporate headquarters out of Seattle

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Boeing moving corporate headquarters out of Seattle

By ALLISON LINN The Associated Press 3/21/01 1:49 PM

SEATTLE (AP) -- Boeing Co. plans to move its world headquarters from Seattle, its home since it was founded 85 years ago, the aircraft manufacturing giant announced Wednesday.

Boeing said it is considering sites in Chicago, Denver and Dallas-Fort Worth, and that the new headquarters would have fewer than half the 1,000 employees currently working at its Seattle corporate center. It did not say what would happen to the other 500 headquarters employees.

The company's massive commercial jet manufacturing plants will remain in the Seattle area, as will much of its research and development.

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

The move is part of a transformation to create "value for our shareholders," Chairman and Chief Executive Officer Phil Condit said at a news conference in Washington, D.C.

"Simply put, we intend to run Boeing as a business that has the flexibility to move capital and talent to the opportunities that maximize shareholder value," he said.

Condit said the decision had been made before the recent West Coast energy crunch -- and before the Feb. 28 earthquake that rattled the Northwest.

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

The headquarters move was prompted by the need "to be in a location central to our operating units, customers and the financial community -- but separate from our existing operations," Condit said.

"The role of the new, leaner corporate center will be to seek new growth opportunities around the globe."

Boeing hopes to chose the new corporate site by early summer and have operations functioning there by fall.

Boeing, founded in Seattle in 1916 by William Boeing, also is promoting the heads of its three operating units to chief executive officers. They 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.

The organizational changes are effective immediately, Condit said, "and we are moving swiftly into site selection for our new headquarters."

http://www.oregonlive.com/newsflash/index.ssf?/cgi-free/getstory_ssf.cgi?a0640_BC_Boeing&&news&newsflash-national

-- Martin Thompson (mthom1927@aol.com), March 21, 2001

Answers

Must be ESP. Posting the same story at same time.

-- Martin Thompson (mthom1927@aol.com), March 21, 2001.

Well, at least the AP/Oregon Live story gives a little more detail than the snippet USA Today ran.

I do see the section you nicely highlighted, about the decision being made "before the energy crunch and EQ." But still, it's noteworthy even that the company felt obliged to deny a link. (And I admit that, for the moment anyhow, this is only the corporate HQ = a small fraction of the entire Boeing operation.)

Still...the push to move so quickly, particularly at a time when the real cost of the move must surely be balanced against the putative benefit, is interesting. Maybe this is also an easy way to shed office workers who won't/can't move elsewhere? What about someone who works in the corporate end, but whose spouse is a Boeing shop machinist or whatever?

I don't pretend to know anything about this except what I read in the papers. But as they say in conspiracy circles, "Never believe anything until it is denied three times."

-- Andre Weltman (aweltman@state.pa.us), March 21, 2001.


Or officialy denied by the top dog.

-- (perry@ofuzzy1.com), March 21, 2001.

Some additional observations being made over at the TB2000 forum,

http://pub5.ezboard.com/fyourdontimebomb2000.showMessage? topicID=26812.topic

-- Andre Weltman (aweltman@state.pa.us), March 21, 2001.


As you can imagine this is the big story in Seattle. Rumors are running rampid. Like is this just the first of a major move out of Washington.

Boeing's corporate headquarters will likely be closed by early this summer. BREAKING NEWS: Boeing moving headquarters out of Seattle March 21, 2001, 01:30 PM SEATTLE – In a move to increase profitability, Boeing officials have decided to move the company headquarters out of Seattle, its home since it was founded 85 years ago.

Boeing said it is considering sites in Chicago, Denver and Dallas- Fort Worth, and that the new headquarters would have fewer than half the 1,000 employees currently working at its Seattle corporate center. It did not say what would happen to the other 500 headquarters employees.

The company's massive commercial jet manufacturing plants will remain in the Seattle area, as well as much of its research and development.

"As we've grown, we have determined that our headquarters needs to be in a location central to all our operating units, customers and the financial community – but separate from our existing operations," said Phil Condit, Boeing chairman and chief executive officer Wednesday morning. "The role of the new, leaner corporate center will be to seek new growth opportunities around the globe. Our newly promoted business unit leaders will have greater freedom to serve their customers, develop partnerships, grow, and create additional value for our shareholders and growth opportunities for our employees."

Boeing officials say they are seeking to locate the company's headquarters in a culturally diverse city that offers ready access to global markets, provides a strong pro-business environment, and allows easy access to major Boeing operations and customers. "This is a fundamental strategic decision," he said. The goal is "what's best for the corporation."

The company hopes to have a site selected by early summer and have an operational center in its new headquarters by fall. Boeing expects that the new corporate center will have less than half the 1,000 employees currently working in the Seattle location.

"The organizational changes are effective immediately, and we are moving swiftly into site selection for the new headquarters. These bold, strategic moves are further steps in Boeing's continuing transformation," Condit said. Boeing hopes to chose the new corporate site by early summer and have operations functioning there by fall.

When asked about the timing of the announcement, Condit said the topic had been under discussion for a while. Condit discussed the move with the board in December and asked for approval in February.

The decision was reached prior to the Feb. 28 earthquake in Seattle.

“There’s nothing magic about this moment. It’s just now’s the time,” Condit said.

The nearly 80,000 workers who build the planes will stay employed at plants around the Seattle area. In January, Condit indicated that moving workers at Boeing’s Renton plant to Everett was under consideration. But no decision on that possible move was announced on Wednesday.

"It is important that we move headquarters,” Condit said. “The company is made up of a number of pieces. Each one is an important part. We will still have some 80,000 people in the state of Washington."

Regarding Chicago as a possible headquarters, Condit acknowledged that although O'Hare International Airport has connections to many places in the world, they are offset by delays.

Asked about Airbus taking more market share, he said, "Airbus is not taking market share, we will deliver over 60 percent of business in the world."

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

Boeing stock was down slightly after the announcement. At 11:15 a.m., the stock was down 0.03 at 54.97.

Boeing also is promoting the heads of its three operating units to chief executive officers. They 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.

Union reaction Union officials were shocked at Wednesday’s announcement. “We’re disappointed at the message they’re sending, but the message we’re sending is this: they can run and hide in another city, but this union is not going away,” Mark Blondin, with the Boeing machinists’ union, said at a Wednesday morning press conference.

Blondin said he understood that none of his union’s employees would be affected by the move, but said he was “deeply disturbed” by the fact that up to 500 “non-represented” employees would be uprooted, and up to 500 other employees may lose their jobs.

“I think that Bill Boeing would be turning over in his grave if he knew they were moving his house to another city,” Blondin said.

Video: Union Reaction Bill Dugovitch, SPEEA spokesman, spoke with KING 5’s Jean Enersen and Mark Mullen on the news at noon: low-speed video high-speed video Officials at the engineers’ union said they heard about the planned move earlier Wednesday morning, and were surprised with the cities Boeing had targeted because they had no major Boeing facilities in them.

Members of the Society of Professional Engineering Employees in Aerospace (SPEEA) said they wondered whether the company management was trying to insulate itself from the workforce.

SPEEA was still trying to determine how the move will affect its workers.

Reaction from local leaders: ‘Scarier than the earthquake’ Seattle Mayor Paul Schell said on KING 5 News that he was “totally blindsided” by the announcement. “I’m very disappointed it it’s true,” he said. "I am going to do everything I can to change their minds.”

In a statement, Washington Governor Gary Locke said he was “surprised and deeply sorry” at the announcement. "I am pleased, however, that the company has pledged not to turn its back on the state of Washington and continue its generous contributions to our citizens and businesses.

“Boeing is an integral part of the pioneering history and spirit of this state. It represents the innovation and risk we in Washington are willing to take in the interest of progress. 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."

In a telephone interview on KING 5 News, Locke said he understood that Boeing wants the top CEOs who oversee nationwide operations to be closer to the center of the U.S., especially after the merger with McDonnell Douglas.

"I am very stunned, but they said the board wants them to be closer to the financial and political center of the U.S. because they have so many operations now, and to be competitive in global markets they need to be closer to D.C. and the center of the U.S.” Locke said.

Asked whether he thought Boeing could manage to do this out of Seattle, he said:

"I think they can still effectively manage far-flung operations out of Seattle and they'll still need to be on the road and planes a lot. I don't know if by saving an hour or two of flight time makes a lot of difference."

The governor was assured that manufacturing will still remain in Seattle. "Some top executives said they would split time between Seattle and corporate headquarters, and top production executives will still be headquartered in this area,” he said.

Locke added he didn't think Boeing is making a statement about the business climate in the Seattle area.

Some state officials, though, said Boeing's decision to move its corporate headquarters is a psychological blow.

The state's chief economist, Chang Mook Sohn, said losing 500 jobs won't be a large economic hit, but it could send a message that Washington's isn't a good place to do business.

Legislators and lobbyists in Olympia were stunned at the news.

Representative Kelly Barlean of Langley said, "This is a serious blow. I'm shaking. This is scarier than the earthquake was."

King County lobbyist Chuck Williams says it's a huge hit to the region's prestige. "It's a hometown, homegrown company moving their corporate headquarters. They've been a good employer, the backbone of the economy in this state for almost our entire economic history," Williams said.

Boeing history Boeing was founded in Seattle in 1916 by William Boeing, who initially built wooden seaplanes.

The company defined Seattle 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; and its international prestige gave the city its claim as a hub of the Pacific economy.

Mergers in the 1990's, including longtime rival McDonnell Douglas and the space divisions of North American Rockwell, spread its operations nationwide.

The Associated Press contributed to this report.

http://www.newsdirectory.com/go/?f=&r=wa&u=www.king5.com

-- Martin Thompson (mthom1927@aol.com), March 21, 2001.



State's traffic, fees not business friendly 2001-03-22 by Mike Ullmann Journal Reporter

What exactly is a business-friendly climate, the kind Boeing and other corporate giants say we don't have in Washington state?

Here's what it's not: It's not some of the worst traffic in the nation. It doesn't have some of the highest sales and business taxes anywhere.

And most especially, it's not a place where progress is gridlocked and politicians can't find a way out.

``Compared to everywhere else we do business, Washington is below average,'' Boeing's chief financial officer said in a 1999 speech that foreshadowed yesterday's announcement that the aerospace giant will move its corporate offices to another state.

That's still true, in many ways.

``Companies can conduct business a lot more efficiently and less expensively in another state,'' said Sharon Eklund, president of the chamber of commerce in Renton, home to one of Boeing's biggest local plants.

``Boeing has basically given us warnings for about the last 15 years that if our legislators and government leaders don't shape up, this is what would happen,'' said Bob Wallace, a Bellevue businessman and former chairman of the Greater Seattle Chamber of Commerce.

``This is a horribly expensive place to do business, and we don't see any hope it will change,'' Wallace said.

Jim Hebert, who heads a Bellevue research firm often hired by corporations, specified three problems with the business climate:

* Traffic. Business pleas to reduce congestion ``are ignored,'' Hebert said.

``It's costing businesses money every day to have these delays,'' Eklund said.

* High impact fees in the thousands of dollars that local governments charge developers before they can build projects. In contrast, other states will offer financial incentives for new construction.

* The newest problem: high power prices and, soon, the possibility of a drought.

Another long-standing problem is Washington's reliance on high business taxes. According to the Washington Association of Business, those taxes are the highest of all the western states, and twice as high as Colorado's -- one state Boeing is considering for its corporate headquarters.

``We are taxing businesses out of this state,'' 5th District Republican State Sen. Dino Rossi said. ``On top of that, our roads are congested and our energy bills have gone through the roof.''

Jay Covington, Renton's chief administrative officer, said it is possible for governments and businesses to successfully work together, such as when Renton was able to fast-track Boeing's desire to build its commercial airplane headquarters at the old Longacres racetrack just off Interstate 405.

``That was a great example of a business-friendly environment,'' Covington said.

Nonetheless, Covington agreed, ``the state of Washington does have a bad business tax.''

But the most-singled-out woe in discussions yesterday was traffic -- called our No. 1 priority by King County Executive Ron Sims.

``The time to act on these critical measures is now,'' said Sims, a Democrat. ``It has never been more evident than in the fact of today's announcement.''

Lack of action is a leadership problem, said County Councilman Rob McKenna.

``The bottom line is, we have not gotten our act together, all the way from the state Legislature to the local governments,'' said McKenna, a Bellevue Republican.

Wallace said Boeing CEO Phil Condit got a first-hand look at that problem when he led a chamber task force that recommended transportation solutions -- solutions that were then ignored.

``(Condit) was absolutely dumbfounded when the Legislature told them to shove it,'' Wallace said.

Mike Ullmann can be reached at mike.ullmann @eastsidejournal.com or 425-452-1072.

http://www.southcountyjournal.com/sited/story/html/48177



-- Martin Thompson (mthom1927@aol.com), March 22, 2001.


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