ElroyJetson wrote:

WkndWanderer wrote:

william wrote:

What company is MOVING to high cost Seattle?

I mean WA state has no corporate income tax, and Boeing was largely exempted under state law from B&O tax until they asked not to be anymore during their WTO spat with Airbus. DC-Nova is very expensive in it's own right. I think as others have said, almost every major defense contractor is headquartered in the DC metro, this makes more sense than Chicago ever did.

Washington's effective tax rate is ranked 37th in the nation at 12.2% Virginia is quite a bit less expensive.

https://wallethub.com/edu/best-worst-st ... payer/2416

IADCA wrote:

For those unfamiliar with Arlington, Boeing's campus there is pretty much a stone's throw from the Pentagon, and it's also tucked up against the new Amazon HQ2 developments in Crystal City. There's already a huge Boeing presence there, and the Arlington County Board has been handing out local real estate tax breaks like candy to fill a glut of vacant office space.

Midwestindy wrote:

Boeing said to be moving HQ from Chicago to DC area likely Arlington

Surprised it took such a short time to jump ship from Chicago.

- Want to be closer to decision makers in Washington

https://twitter.com/DeItaone/status/152 ... RVKOMvyDMQ
https://www.wsj.com/articles/boeing-pla ... os1&page=1

WkndWanderer wrote:

ElroyJetson wrote:

WkndWanderer wrote:

I mean WA state has no corporate income tax, and Boeing was largely exempted under state law from B&O tax until they asked not to be anymore during their WTO spat with Airbus. DC-Nova is very expensive in it's own right. I think as others have said, almost every major defense contractor is headquartered in the DC metro, this makes more sense than Chicago ever did.

Washington's effective tax rate is ranked 37th in the nation at 12.2% Virginia is quite a bit less expensive.

https://wallethub.com/edu/best-worst-st ... payer/2416

The article you're citing is for personal and household effective tax rates, WA's overall business tax climate is better than VA's. WA is ranked 10 spots higher in business tax climate by the Tax Foundation.

https://taxfoundation.org/2021-state-bu ... ate-index/

ElroyJetson wrote:

WkndWanderer wrote:

ElroyJetson wrote:

Washington's effective tax rate is ranked 37th in the nation at 12.2% Virginia is quite a bit less expensive.

https://wallethub.com/edu/best-worst-st ... payer/2416

The article you're citing is for personal and household effective tax rates, WA's overall business tax climate is better than VA's. WA is ranked 10 spots higher in business tax climate by the Tax Foundation.

https://taxfoundation.org/2021-state-bu ... ate-index/

Except the move is from Illinois to Virginia, not Washington, and Virigina has a vastly better tax environment. Also, taxes overall are much higher in Illinois and Washington than Virigina. For Boeing employees their effective tax rate in Illinois is the worst in the Nation. Virginia ranks 25th, Washington ranks 37th, and Illinois ranks 51st.


https://wallethub.com/edu/best-worst-st ... payer/2416

IFlyOff wrote:

Very much the trend in the USA for corporations to move from high tax/high regulation states (California, Illinois, New York, etc.) to lower tax/less regulatory bureaucracy states in the south including Florida and Texas.

sxf24 wrote:

amtravels wrote:

sxf24 wrote:

Tom Gentile does not walk the floor at Spirit every morning.

The CEO of Boeing hires CEOs at BCA and BDS to run those businesses. I think there’s a warped view of what CEOs do. They should listen and talk to many different types of workers, but their job is to focus on big, strategic issues and hiring/developing the right people. At a Fortune 100 company, a CEO should rarely be at HQ - they’re on the road visiting company sites, meeting with customers and seeing investors 80% of the time. Dave Calhoun actually lives in South Carolina!

Tom walks the floor near daily. If not daily, then absolutely weekly. He's there at 5:30am. Now, a move for BCA back to Seattle, combined with a shift in corporate culture to engage with the folks on the ground would be positive for Boeing. However, a move back to Seattle without that culture shift is useless.

Walking the floor weekly is nice and certainly helps with culture.

Since Dave Calhoun lives in South Carolina, I don’t think moving HQ to Seattle will get him on the factory floor of Everett any more than he already visits. Besides, that’s Stan Deal’s job.

Granted this is a civil aviation site, but people act like 7-series are the only products Boeing makes.

amtravels wrote:

sxf24 wrote:

amtravels wrote:

Tom walks the floor near daily. If not daily, then absolutely weekly. He's there at 5:30am. Now, a move for BCA back to Seattle, combined with a shift in corporate culture to engage with the folks on the ground would be positive for Boeing. However, a move back to Seattle without that culture shift is useless.

Walking the floor weekly is nice and certainly helps with culture.

Since Dave Calhoun lives in South Carolina, I don’t think moving HQ to Seattle will get him on the factory floor of Everett any more than he already visits. Besides, that’s Stan Deal’s job.

Granted this is a civil aviation site, but people act like 7-series are the only products Boeing makes.

You make a good point about Calhoun. Anyway, back to my original question. How long until Boeing spins off BCA or BDS? seems like it’s only a matter of time at this point.

atcsundevil wrote:

A lot of people seem very focused on this move being related to the defense contract side of the business as well as lobbying. While that is undoubtedly a component, there are other very relevant reasons. Boeing already has a large presence in Northern Virginia, as does a fast growing tech sector in the Reston/Loudoun area. Roughly 80% of the world's internet traffic passes through Loudoun County, and it has quickly become one of the largest data storage locations on the planet. Collaborating with other companies in the aerospace and tech sector is going to be important to Boeing's future. Having a location in Chicago really doesn't do much of anything strategically for the company without significant tax incentives. The State of Virginia is not offering tax incentives, so clearly the other reasons for relocation were more compelling. It also doesn't hurt that Senator Mark Warner has been pushing the move for some time, and he has undeniably become an influential congressman. While moving headquarters is without question the least of Boeing's concerns right now, there are plenty of valid reasons for this decision.

sxf24 wrote:

Northrop and Raytheon also moved HQs to DC area.

ScottB wrote:

sxf24 wrote:

Northrop and Raytheon also moved HQs to DC area.

No, Raytheon is still headquartered in the Boston suburbs (Waltham, specifically). Raytheon's HQ location was chosen for the company resulting from the merger of United Technologies and Raytheon.

Canuck600 wrote:

Correct me if I'm wrong but Boeing Commercial Aircraft is still headquartered in Washington state & it's only the Boeing Corporation that moved to Chicago & now Virginia? Boeing Commercial Aircraft needs a good house cleaning.

I really get a feeling that a lot of posters really don't know much about corporate structure.

Edit to add more info It's actually Stanley Deal that is responsible for the overall commercial aircraft division & he reports to Calhoun. The Boeing Corporation could relocate to the Artic & it wouldn't have an effect on what goes on at Boeing Commercial Aircraft.

D L X wrote:

IADCA wrote:

For those unfamiliar with Arlington, Boeing's campus there is pretty much a stone's throw from the Pentagon, and it's also tucked up against the new Amazon HQ2 developments in Crystal City. There's already a huge Boeing presence there, and the Arlington County Board has been handing out local real estate tax breaks like candy to fill a glut of vacant office space.

BUT… they’re doing it smartly. They lured Boeing in a few years ago with choice land next to the airport, and the county made them develop some parks and a really nice public aquatic center as well.

WkndWanderer wrote:

Canuck600 wrote:

Correct me if I'm wrong but Boeing Commercial Aircraft is still headquartered in Washington state & it's only the Boeing Corporation that moved to Chicago & now Virginia? Boeing Commercial Aircraft needs a good house cleaning.

I really get a feeling that a lot of posters really don't know much about corporate structure.

Edit to add more info It's actually Stanley Deal that is responsible for the overall commercial aircraft division & he reports to Calhoun. The Boeing Corporation could relocate to the Artic & it wouldn't have an effect on what goes on at Boeing Commercial Aircraft.

They sold the WA headquarters of BCA last year. They're now just scattered at BFI, PAE, CHS, or Renton, not including the ones who are mostly working from home now. They technically no longer have a HQ building, Stan Deal's office is at the Boeing Field delivery center.

https://www.foxbusiness.com/markets/boe ... s-for-100m

sxf24 wrote:

WkndWanderer wrote:

Canuck600 wrote:

Correct me if I'm wrong but Boeing Commercial Aircraft is still headquartered in Washington state & it's only the Boeing Corporation that moved to Chicago & now Virginia? Boeing Commercial Aircraft needs a good house cleaning.

I really get a feeling that a lot of posters really don't know much about corporate structure.

Edit to add more info It's actually Stanley Deal that is responsible for the overall commercial aircraft division & he reports to Calhoun. The Boeing Corporation could relocate to the Artic & it wouldn't have an effect on what goes on at Boeing Commercial Aircraft.

They sold the WA headquarters of BCA last year. They're now just scattered at BFI, PAE, CHS, or Renton, not including the ones who are mostly working from home now. They technically no longer have a HQ building, Stan Deal's office is at the Boeing Field delivery center.

https://www.foxbusiness.com/markets/boe ... s-for-100m

So they put company leadership at production and delivery sites instead of an isolated corporate campus?

amtravels wrote:

Sooo… how long until BCA and the rest of Boeing split? Boeing gov’t and defense stay in DC, BCA sets up shop elsewhere.

And I disagree with the broad based assumption above that good management can work from anywhere. Sure, but there’s something to be gained from management walking the factory floor, talking to mechanics and supervisors on a regular basis.

Sources say that the CEO of Spirit AeroSystems (fka Boeing) walks the shop floor every morning at shift start so that he knows what’s going on within his business. Gives him valuable insight and probably earns him a little goodwill among the hourlies, too. This is how it should be done at Boeing itself.

Metchalus wrote:

Why would they split if defence products are being produced in commercial facilities.

ElroyJetson wrote:

Senator Mark Warner of Virginia told Reuters in an interview the headquarters move "is great for bragging rights -- what maybe a long-term bigger boost to (Virginia) may be the research and development center."

atcsundevil wrote:

A lot of people seem very focused on this move being related to the defense contract side of the business as well as lobbying. While that is undoubtedly a component, there are other very relevant reasons. Boeing already has a large presence in Northern Virginia, as does a fast growing tech sector in the Reston/Loudoun area. Roughly 80% of the world's internet traffic passes through Loudoun County, and it has quickly become one of the largest data storage locations on the planet. Collaborating with other companies in the aerospace and tech sector is going to be important to Boeing's future. Having a location in Chicago really doesn't do much of anything strategically for the company without significant tax incentives. The State of Virginia is not offering tax incentives, so clearly the other reasons for relocation were more compelling. It also doesn't hurt that Senator Mark Warner has been pushing the move for some time, and he has undeniably become an influential congressman. While moving headquarters is without question the least of Boeing's concerns right now, there are plenty of valid reasons for this decision.

Lootess wrote:

HP probably stands out because they built net-new campus near Houston.

jbs2886 wrote:

EBiafore99 wrote:

Boeing needs to stop playing this game. Moving headquarters, no matter the "business" reason, takes resources, and Boeing needs all of their resources dedicated to actually fixing the problems in their product portfolio.

There are so many of these unnecessary negative posts. Yes, Boeing has major problems to fix. I think we all know that and they know that. But this type of narrow thinking isn't the solution. It takes a lot of actions, even those symbolic and long-term structural to fix Boeing's problems - it isn't just getting the current product line approved and delivered. If you took a minute to read what is happening, you'd understand there are not a ton of resources dedicated to this as you suggest. Its basically execs moving to existing Boeing office space close to its largest customer and commercial aviation regulators and opening a research and technology hub.

EBiafore99 wrote:

Boeing needs to stop playing this game. Moving headquarters, no matter the "business" reason, takes resources, and Boeing needs all of their resources dedicated to actually fixing the problems in their product portfolio.

jbs2886 wrote:

EBiafore99 wrote:

Boeing needs to stop playing this game. Moving headquarters, no matter the "business" reason, takes resources, and Boeing needs all of their resources dedicated to actually fixing the problems in their product portfolio.

There are so many of these unnecessary negative posts. Yes, Boeing has major problems to fix. I think we all know that and they know that. But this type of narrow thinking isn't the solution. It takes a lot of actions, even those symbolic and long-term structural to fix Boeing's problems - it isn't just getting the current product line approved and delivered. If you took a minute to read what is happening, you'd understand there are not a ton of resources dedicated to this as you suggest. Its basically execs moving to existing Boeing office space close to its largest customer and commercial aviation regulators and opening a research and technology hub.

Lootess wrote:

This was the criteria compiled by the Harvard Business Review back when they did the story on Boeing was moving out of Seattle in 2001, and ultimately landed in Chicago:

MIflyer12 wrote:

EBiafore99 wrote:

Boeing needs to stop playing this game. Moving headquarters, no matter the "business" reason, takes resources, and Boeing needs all of their resources dedicated to actually fixing the problems in their product portfolio.

The location of execs is really not material. (They got Chicago's incentives by talking abut 2,000 employees working there. It quickly became apparent the number was around 1,000. A recent source put it at just 500.) Those 500 could work on the moon given good internet.

Beoing execs aren't going to meet with legislators and regulators routinely. They've got lobbyists and Corp. Communications people for that -- who they can readily terminate if they mess up.

IADCA wrote:

For those unfamiliar with Arlington, Boeing's campus there is pretty much a stone's throw from the Pentagon, and it's also tucked up against the new Amazon HQ2 developments in Crystal City. There's already a huge Boeing presence there, and the Arlington County Board has been handing out local real estate tax breaks like candy to fill a glut of vacant office space.

Bird80 wrote:

The move does seem to make some sense from a couple of perspectives. The MAX crashes caused huge relationship damage with the FAA, when the events made it appear as though Boeing had deliberately hidden the existence and function of MCAS from their regulator. This damage has cost Boeing immensely. There is the appearance of zero trust between the two. For example, I cannot understand why it took such a long period of time (almost a year!) for Boeing to even submit their 787 certification plan. I mean, nearly a year to just submit a plan, while you're sitting on and still accumulating tens of billions of dollars worth of 787 inventory??? On top of that, the removal of Delegated Authority for certification of new aircraft, which will only further complicate and slow the delivery of all those aircraft.

Justifications aside, I have to say that I think the reactions from the investors would have been more positive had the HQ been moved back to Seattle. They need better integration and alignment between their top executives, and the leadership that best understand their true core product in commercial aircraft. It feels to me like their top brass are still hanging on to the some of the motivations that put them in Chicago in the first place, a desire to be disconnected (and not overwhelmed by) the engineering community in Seattle.

ScottB wrote:

Probably makes sense if the company views its future as being more closely tied to defense contracts than commercial aviation. There's also a bit of tax savings when they return to profitability since the corporate income tax rate in VA is lower than IL.

LMP737 wrote:

Midwestindy wrote:

Boeing said to be moving HQ from Chicago to DC area likely Arlington

Surprised it took such a short time to jump ship from Chicago.

- Want to be closer to decision makers in Washington

https://twitter.com/DeItaone/status/152 ... RVKOMvyDMQ
https://www.wsj.com/articles/boeing-pla ... os1&page=1

Boeing would move the HQ to hell if they thought it would give them influence with satan.

Midwestindy wrote:

Boeing said to be moving HQ from Chicago to DC area likely Arlington. Want to be closer to decision makers in Washington......

zakuivcustom wrote:

Lootess wrote:

HP probably stands out because they built net-new campus near Houston.

(Getting off topic) But HP already have a large presence in Houston area that dates way back to its merger with Compaq. They're building the new campus bc their old campus (aka former Compaq campus) was damaged by flood during Harvey.

Ertro wrote:

I guess "Proximity to restaurants" is a major problem in big US cities so that it needs to be raised as major criteria. Or is it?

Lootess wrote:

This was the criteria compiled by the Harvard Business Review back when they did the story on Boeing was moving out of Seattle in 2001, and ultimately landed in Chicago:



Arlington checks all those boxes today too, and can simply just add regulator presence to it.

ScottB wrote:

zakuivcustom wrote:

Lootess wrote:

HP probably stands out because they built net-new campus near Houston.

(Getting off topic) But HP already have a large presence in Houston area that dates way back to its merger with Compaq. They're building the new campus bc their old campus (aka former Compaq campus) was damaged by flood during Harvey.

I think it was relevant in the context of the HQ move from Puget Sound to Chicago; at the time, I imagine dining options in the Seattle suburbs were a bit limited if you wanted something nicer than the Olive Garden or Chili's. It's a reason you'd choose a HQ in an urban core rather than out in the suburbs. And there are going to be certain customers who care if you wine and dine them at a restaurant with a Michelin star or three.

IADCA wrote:

D L X wrote:

IADCA wrote:

For those unfamiliar with Arlington, Boeing's campus there is pretty much a stone's throw from the Pentagon, and it's also tucked up against the new Amazon HQ2 developments in Crystal City. There's already a huge Boeing presence there, and the Arlington County Board has been handing out local real estate tax breaks like candy to fill a glut of vacant office space.

BUT… they’re doing it smartly. They lured Boeing in a few years ago with choice land next to the airport, and the county made them develop some parks and a really nice public aquatic center as well.

This is rather an aside, but the Arlington taxpayers are on the hook a fair bit for the aquatic center as well, especially via ongoing operating funding. Place ain't cheap, and a lot of the whining is that the location is really inconvenient to the areas of the county that tend to fill the pools. I don't have a ton of sympathy there - land in Arlington isn't exactly easy to find - but it is a bit of a pain to get to. As for Boeing, that location made more sense pre-Amazon; I think if you asked the Board today, they'd prefer Boeing to have landed in Rosslyn or Ballston these days. Not that they'll turn this down.

ScottB wrote:

zakuivcustom wrote:

Lootess wrote:

HP probably stands out because they built net-new campus near Houston.

(Getting off topic) But HP already have a large presence in Houston area that dates way back to its merger with Compaq. They're building the new campus bc their old campus (aka former Compaq campus) was damaged by flood during Harvey.

That's not quite accurate; HP had already sold off much of the former Compaq campus to a local community college system nearly a decade before Harvey. The new HPE campus (this is the HP successor company which moved to the Houston area) is maybe a 15 minute drive to IAH; that's a big advantage of the location.

Ertro wrote:

I guess "Proximity to restaurants" is a major problem in big US cities so that it needs to be raised as major criteria. Or is it?

I think it was relevant in the context of the HQ move from Puget Sound to Chicago; at the time, I imagine dining options in the Seattle suburbs were a bit limited if you wanted something nicer than the Olive Garden or Chili's. It's a reason you'd choose a HQ in an urban core rather than out in the suburbs. And there are going to be certain customers who care if you wine and dine them at a restaurant with a Michelin star or three.