clock menu more-arrow no yes

Filed under:

Boeing has Seattle shaking

Aerospace giant's plans to relocate stun workers and leaders

SEATTLE — After eight decades as a mainstay of the local economy and a virtual emblem of Seattle, Boeing Co. stunned its hometown Wednesday with an abrupt announcement that it would move its corporate headquarters out of the region.

The aviation giant said it was evaluating the Chicago, Denver and Dallas areas as possible sites for a new base. The company chairman, Phil Condit, said he envisioned a "leaner corporate center" that would provide Boeing greater "flexibility to move capital and talent to the opportunities that maximize shareholder value."

Boeing said it had no plans to move its giant commercial aircraft unit, which manufacturers ubiquitous passenger jets like the Boeing 737, 747 and 767, out of the Seattle area. And thus it is possible, as the company insisted Wednesday, that the specific impact on the Seattle economy would be relatively slight, since only about 500 jobs are slated to be moved to the new headquarters.

Nonetheless, the news, announced by Condit in Washington, D.C., came as a enormous blow to Seattle's psyche and prestige, as stunning, say, as would be a move by General Motors to leave Detroit or Coca-Cola to forsake Atlanta.

And many here expressed fears that it was a precursor to a larger scaling back by Boeing, which provides jobs for about 80,000 people in the Puget Sound region and is by far the area's largest private employer.

Seattle's mayor, Paul Schell, said he was "totally blindsided" by the announcement, and both he and Washington's governor, Gary Locke, pleaded with the company to reconsider.

With the region still recovering from the literal jolt it suffered last month, Dick Conway, a local economist, took a stab at gallows humor when he said of Boeing's news: "Well, it has made us forget the earthquake all of a sudden."

And a local radio station, KIRO-AM, linking Boeing's possible relocation to Dallas with the move of the baseball superstar Alex Rodriguez from the Seattle Mariners to the Texas Rangers, started playing the country song, "All My Ex-'s Live in Texas."

But the dominant emotions were shock and anger. Union leaders were furious at both the news itself and the five minutes' advance notice that Boeing gave them and the area's elected officials before issuing the announcement.

"This decision is a blow to our entire community," said Mark Blondin, president of the local chapter of the International Association of Machinists and Aerospace Workers, representing about 25,000 Boeing workers. "Bill Boeing must be turning over in his grave to learn his company is being ripped from its roots and moved cross country."

He was referring to William Boeing, who bought a shipyard on the Duwamish River in 1910 and later turned it into an airplane factory. He founded the company in 1916 and, taking advantage of the region's once-cheap and abundant hydroelectric power, turned it into the world's pre-eminent manufacturer of planes. Boeing planes helped the Allies win World War II and, in peacetime, helped define modern jet passenger travel.

In recent years, however, the company has seen its once-dominant share of the commercial airplane market erode, especially in its global market competition with Airbus Industrie, the European consortium.

Condit suggested that the company could function more easily in this global atmosphere out of one of the three cities under consideration, which are all either headquarters or major international hubs of the company's three leading airlines — United, American and Delta.

But many Seattle residents and several industry analysts scoffed at that explanation. Some suggested that one of the real reasons behind the move was that Boeing would become more decentralized and increasingly move toward "outsourcing" some of its work — that is, contracting it to other companies instead of using its own, heavily unionized work force.


Contributing: Laurence Zuckerman