Boeing set to move headquarters to Arlington, Virginia, sources say

WASHINGTON/SEATTLE -

U.S. planemaker Boeing is set to move its corporate headquarters from Chicago to Arlington, Virginia, two people familiar with the matter said.

The move, likely to be announced as early as next week, comes as Boeing works to emerge from successive crises and industrial problems that have deepened its focus on repairing relationships with customers, U.S. regulators and lawmakers.

The move to Arlington - across the Potomac River from the U.S. capital - will place Boeing senior leaders close to the Federal Aviation Administration, lawmakers and the Pentagon.

A Boeing spokesperson had no immediate comment.

Reuters reported last October, citing sources close to the company, that cost cuts and a more hands-on corporate culture have raised questions about Boeing's long-term future in Chicago, and in turn the broad direction Boeing intends to take as it tries to regain its stride.

Boeing's relocation decision was reported earlier by the Wall Street Journal.

Boeing has been working to repair its relationship with the FAA after the prior CEO Dennis Muilenburg was fired in 2019 after clashing the FAA over its review of the 737 MAX following two fatal crashes that killed 346 people.

Boeing already has an Arlington office that opened in 2014 and has significant unused space. It is just blocks from Amazon's HQ2 building that is under construction.

The Chicago headquarters - a 36-floor, US$200 million riverfront skyscraper - has also been at the crossroads of a cost-cutting campaign that has seen Boeing shed real estate, including its commercial airplane headquarters in Seattle.

Boeing moved its headquarters to Chicago in 2001, leaving 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 was seeking a post-merger headquarters in a neutral location separate from those existing divisional power centres.

Chicago, Cook County and Illinois awarded Boeing more than US$60 million in tax and other incentives over 20 years to relocate. Those credits have expired, though Boeing was set to receive 2021 funds this year.

Some critics viewed the Chicago move as a symbol of a company that prized near-term profits and shareholder returns over long-term engineering dominance - a charge repeated after the 737 MAX crashes.

Once the symbol of a new Boeing, the vision of a corporate epicenter rising above its constituent parts has fallen at odds with the imperative of recapturing engineering dominance and repairing relationships with customers and federal regulators.

Boeing Chief Executive Dave Calhoun, for example, has made frequent trips to Boeing's 787 Dreamliner factory in South Carolina to deal with production-related defects that have hobbled the program. 

Calhoun is also working to win certification of the largest variant of the 737 MAX before a new safety standard on cockpit alerts takes effect at year-end and is hoping Congress will step in.

The deadline for changes was introduced as part of broader regulatory reforms at the Federal Aviation Administration following the fatal 737 MAX crashes.

(Reporting by Eric M. Johnson in Seattle and David Shepardson in Washington; Editing by Will Dunham)