Aerospace giant The Boeing Company (BA) announced on Thursday, May 5, that it plans to relocate its corporate headquarters to Arlington, Virginia, from Chicago, positioning itself closer to key global customers and stakeholders. The move comes 21 years after the commercial aircraft maker shifted its head office to the Windy City from Seattle. Despite the relocation, Boeing insists that it will maintain a significant presence in Chicago.
- Boeing has announced that it plans to relocate its corporate headquarters to Arlington, Virginia, from Chicago.
- The move positions the aerospace giant closer to key global customers and stakeholders.
- Boeing also unveiled plans to open a research and technology center in Northern Virginia that will focus on cybersecurity, autonomous operations, quantum sciences, and software and systems engineering.
- Boeing's move to Virginia provides access to the area's engineering talent pool to keep it at the forefront of aviation and aerospace innovation.
- Boeing's move to the state was not expected to involve financial incentives, but it may include workforce-related incentives.
The company also unveiled plans to develop a research and technology hub in the D.C. area to attract engineering and technical talent. "We are excited to build on our foundation here in Northern Virginia. 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," said Boeing President and Chief Executive Officer Dave Calhoun in a statement.
Proximity to Aviation Regulator and Pentagon Officials
The move places Boeing closer to the D.C.-based Federal Aviation Administration (FAA), the company's key regulator. This has potential benefits for the airplane maker, given it has faced increased regulatory scrutiny in the years following two fatal crashes involving its top-selling 737 MAX that resulted in the FAA grounding the jet for nearly two years. More recently, the regulator has prevented Boeing from making deliveries of its 787 Dreamliner over manufacturing quality issues.
The company—which generated more than half its total 2021 revenue from military sales—also has its new headquarters closer to top Pentagon officials in Washington, D.C., making it easier to collaborate with government officials on space and defense programs.
In Pursuit of Aerospace Excellence
Boeing's decision to open a research and technology center in Northern Virginia will help it focus on areas including cybersecurity, autonomous operations, quantum sciences, and software and systems engineering, according to the statement.
"The future of Boeing is digital," said Greg Hyslop, the company's chief engineer and executive vice president of Engineering, Test and Technology. "Focusing our research and development (R&D) and talent development in areas that support digital innovation will fuel the introduction of cutting-edge capabilities. This new hub in Northern Virginia will follow the successful implementation of this technology strategy in other regions," he added.
The move also allows Boeing to tap into the area’s engineering talent pool to keep it at the forefront an aviation and aerospace innovation.
Wooed by Virginia State Officials
Senator Mark Warner (D., Va.)—who has urged Boeing to consider relocating to Virginia over the past 12 months—told The Wall Street Journal that the state's pipeline of engineering talent had grown due to several prominent companies moving to the area. He noted that Boeing's move to the state made sense, given its already sizeable presence there. "This is not like a company that needs to move to the region to raise its visibility," Warner said. A Virginia government official told the Journal that Boeing's move to the state wasn't expected to involve financial incentives but may include workforce-related benefits.
Boeing stock closed the regular session on Thursday, May 5, down 4.14%, tumbling roughly in line with broad-based selling a day after the Federal Reserve lifted its funding rate for the first time since 2018. The shares traded mostly unchanged following the announcement after the market close regarding the relocation to Virginia. Year to date (YTD), Boeing shares have fallen 25% compared to a decline of around 13% for the S&P 500 Index.
Disclosure: The author held no positions in the aforementioned securities at the time of publication.