Boeing Moving HQ to Washington D.C.
 

According to NPR Boeing just announced its moving its HQ to Washington D.C.

NPR Story

I guess it makes sense in their minds....

[Mods move as required]

Skylimey

They might as well exit the commercial airframe business and concentrate on government contracts. Plus, didn't the tax breaks from Illinois just expire?

The future of the company has been set, and that future is McDonnall Douglas.

They've haven't been doing so hot on their government contracts as of late either. KC-46, Air Force One, Starliner, etc.

Obviously, they need to get even further from the engineers. The focus on engineering was the root cause of the success of the 707, 727, 737 [original], 747, 757, 767 and 777 [original]].

Financial engineering produced the 787, MAX, 747-8 and 777X,

The path to a successful future is clear. /s

It would be sad if this was just the death throes of a dying company. But it seems to be representative of something much deeper in our society.

Chicago is a swamp, business-wise. DC area is full of high tech and developing fast. Seattle might have been a good idea, but DC is still going to be an improvement over Chicago.

Easier to BS the government, yes?

From the NPR story:

Shouldn't that be "Boeing took over two years to admit, identify, check, test, verify and get certification of the design changes that should been done before the MAX was placed in service."

Or have I strayed off topic?

For sound decision making processes in that biz it takes engineering and less MBA and Politics background. So they further moved away more into the later. Politics works only so long as the stuff does not fall out of the sky. I assume that some corks popped at Airbus.

If they only had moved to Charleston.

So after moving close to the NE stock exchanges and money now it is the government orders they target? What does this move mean for commercial airplanes? Out of fashion?

It also takes them closer to the FAA and lawmakers/influencers related to civil aviation. Much easier to have a couple of Senators in for a few drinks in DC that Chicago or Seattle

Re some of the posts above ...

On April 27th 2022 the Boeing stock dropped 15 dollars, and 40 million shares moved ownership (normal day 6-12 million shares traded)... just after the most recent Boeing financial report came out... reason for that appears to be mainly a billions of dollar size loss in the Defense segment. And it is clear that Boeing and US DoD are not happy co-campers the last few years. On the financial side the 787 program was said to be never to be able to make a profit, and after that came corona/covid. Which means they have a lot to do. Losing your safety culture means it will take at least 10 years to get that back, at least if you acknowledge that and go to work on that full power (which till now seems not to be the case).

From a program and technical point of view moving far away from engineering and manufacturing is never a good idea (and this especially so in aerospace) and should be noted as a fundamental strategic weakness of an organization. The complexity of aerospace and the tight system integration requires as much close contact as possible.
Having been involved in putting people closer together in both aerospace and defense over the years, it was interesting to find that I could use scientific research on the subject.

So if you move your HQ to another location you MUST either sell much more, or make (margin) or find (funding) much more money to compensate for that weakness. But even then, you will find fundamental weaknesses in both the product and the global supply chain that are hard or even impossible to get out. Even if you exactly know where and what the issue is.

In this context an article linked in that NPR story makes interesting reading .. 737 Max crash victims' families aim to reopen Boeing's deferred prosecution agreement
https://text.npr.org/1096075522 By David SchaperTuesday, May 3, 2022

In one of the posts on the MAX it was suggested that a criminal investigation into Boeing and Boeing executives would exclude Boeing from US DoD contracts. If the victims families action would put Boeing back under the criminal light ... then a strategic option could be to split the civil and the defense segment of Boeing into two separate companies, with the civil HQ back to engineering/manufacturing and the defense HQ in Washington DC.
We are a long way from that of course but might be an interesting contemplation ;-)

As ugly as TBC's behavior has been, they are still a major part of the defence of the west, and that is not going to go away easily, but that is possible. As far as airline business goes, we may have a bit of a hiatus on the return to business as normal, if ever.

They move next door to the Pentagon. Right across the street.

Throughout the pandemic we have observed, and have been told to observe, how group video conferences and other tech methods enable physical proximity and location to hold much less relevance or importance. But some here are seeming to go back in time.

Of course, this SLF/attorney does not dispute that closeness, in a variety of ways, of management to engineering and engineers as well as manufacturing, is critically important in aerospace and especially after the MAX debacles. But at the same time, heaps of derision have been unloaded on Boeing's board - deservedly - for its various abdications and greedy missteps, if not worse. Getting the board and top management away from Seattle might be a better move.... provided there also will be offices just below the org-chart level of corporate hq located next door to Seattle - and Charleston.

And hey, I never liked that building on the river downtown in Windy, and WR here, not sorry at all to see it go. Walked past it on my way to serving the almighty Billable Hour many times.

Chicago was a poor choice on so many levels. They really should move their HQ to the “Big Red Barn” and remember why Boeing became a great corporation to begin with.

Spot on!!! They are so distracted on so many levels that nothing is working right. At some point you have to look at your past, identify what worked, and return to it.

Perhaps Boeing senior management finally decided that the violent crime rate in Chicago was unacceptable, much like Amazon did when it pulled its employees out of downtown Seattle.

From engineering powerhouse (Seattle) ---> to accounting sloth (Chicago) ---> to lobbying leviathan (Wash D.C.)

The arrow of entropy and decay is very clear.

Push them to divest themselves of the defense industry acquisitions they have made over the past few decades. Boeing hasn't done so much in the way of DoD R&D as they have bought the firms that have. And stamped the Boeing logo on their products.

There is a display case in one of their public tour entrances with models of Boeing's past and present product lines. Including a model of the XB-70. I don't recall them being around when the drawings for that were still blank.

Possibly they expect some big arming up concerning China/Pacific and Russia as well. So why not just move group HQ next door to the biggest customer and decision makers?

Boeing has had a rather large presence in the DC area for a number of years and I'm sure they have a few open offices available for the move. Perhaps the rent district in Chicagoland is a bit too costly in their current balance sheets?

Precisely and sadly. Play taps.

Boeing is already here though.
 

Boeing has had a considerable presence at the Long Branch complex since about 2015. I was on the construction team (SLF telecom engineer, not employed by TBC). Yes there are some very cool secret squirrel parts of that facility used for demos and training but much of it is admin, sales, and support in addition to relationship building. It's not much of a stretch to relocate the HQ here. They'll be across the street from Amazon on one side and the Pentagon on the other. Not that this bodes well for Commercial Airplanes but it could be worse.

It's Douglas Aircraft all over again.

Do they intend to sell their airliner business? Then a move right in front of the DoD would make sense.

Perhaps Airbus should open an office nearby. Boeing's recent performance on military projects is not great in every instance.

I think that is absolutely the end game. The crony capitalism of defence contracting fits perfectly with the mindset and skills of the current senior Boeing management. I predict they will load up Boeing Commercial with all the Boeing debt, spin it off into Chapter 11 and then have some vulture fund scoop up what is left and finish running it into the ground.

Privatization of the profits and socialization of the loses, it’s the American way of business.

Good idea for Airbus - the main mission of the office would be to keep pressure on Washington bureaucracy and Boeing to continue have contracts (and projects) like the new generation of tankers for the USAF.

“Perhaps Airbus should open an office nearby.
Boeing's recent performance on military projects is not great in every instance.”

Like Airbus Americas Inc HQ USA
2550 Wasser Terrace #9100, Herndon, VA 20171, United States
or
Airbus Inc Space and Defence
1525 Wilson Blvd STE 500, Arlington, VA 22209, United States

Yes you have. Two years for a line of code and some wiring is just public theatre…

That's quite a simplification of what has been done.

The theater was largely the continuous denials, etc.

Reading between the lines, it could very well be, Boing did give up on "building commercial airplanes". The B777 was an excellent one, the B787 is technically "not bad", though way over budget and it shows, Boing has no comprehension how to build commercial airplanes (IE technology is not important).

The board/management instigated idea to "spread" the development risk, by outsourcing nearly all development and production, worked out even worse than the over-budget/time of the B777 (add to that the consequence of limited internal knowledge of the core technologies). The board/management decision to give the B737 another MAX life worked out dramatically, a $20B+ costing event never seen in Boing history and probably US airline experience. And the board/management decision to extend the B777 life into an -X (in itself not that bad), which in turn exploded on approval tests and started disclosing significant cheating (attempts ?) on certification.

Boing got rid of the experienced developers/engineers, and I did not see a significant amount of new hiring announcements of suitably experienced people to do this kind of state-of-the-art development/engineering work (correct me, when I am wrong). Which more or less implies, there is no development for an 321XLR competitor, no NMA, no A350 competitor.

And the most important aspect is that all public Boing communications is showing a focus on the finances and seemingly neglecting the core engineering stuff (which in the end is the reason why a customer wants to buy -advanced technology- Boing airplanes and consequential the finances exist). KLM biting the bullet and migrating to Airbus should be a clear indication, IE no new developments in that area (KLM especially wanted to increase fuel efficiency, the green-look).

Or so to say, there is a lack of mental connection between Boing board/management and the core reason why customers would be prepared to select Boing aircrafts. Not good.

They don't seem to earn that much money anymore even with programs that sell well by number. Well there is the parts and services business to make money with but still this can't have been the plan it seems?

Isn't the US Supreme Court in Washington? It'd save on the executives travel costs.

Ding Ding Ding! We have a winner!

I think the fix is in on that score, but pretty funny anyway.

The principle of Privatization of the profits and socialization of the loses, unfortunatelly started to spill over to other countries too, Europe included. And if Boeing will concentrate on DoD contracts in the future and abandon commercial airplanes, this might be another threat to world peace. To sell and get a good price for military products, there is nothing better than a good, decent war somewhere in the area of interest.
Why not run for the Mars? Public money would still flow, but not to death-and-destruction bringing products.

There will be a lot of new and different stuff needed for pacific conflict scenarios that we might face sooner than later. Boeing is right to expect big defense business. But they would not be right splitting off the commercial airliner subdivision. Especially now that it needs to catch up on latest technology, software and robot manufacturing that is already used in the military side of the business.