Boeing moves headquarters from Chicago to Arlington, Va.

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Boeing is moving its headquarters from Chicago to Arlington, Va., According to two people familiar with the deal, a sign that the space giant is leaning into its military wing and better positioning itself to navigate the political quagmire.

The move, first reported by The Wall Street Journal, could be formally announced as soon as next week. It also comes as Boeing struggles to pull away from financial burdens from the 737 Max, the suffocating effect of the pandemic on travel and the fallout from cutting ties with Russia. The company reported a loss of $ 1.2 billion in the first quarter.

The move was confirmed by two people familiar with the agreement who spoke on condition of anonymity because the company had planned to wait until next week to make the announcement. Boeing did not immediately respond to a request for confirmation from The Washington Post.

The administration of Governor Glenn Youngkin (R) has been working for the past few months with Boeing to lure the company to the state, according to the two people, who said the governor, a former leader of the Carlyle Group, has a personal relationship with Boeing’s president and CEO David L. Calhoun.

The state has not offered Boeing any “significant” financial incentive to the company, the two said.

Arlington County spokeswoman Jessica Baxter said in a statement that “for competitive reasons and to protect confidential company information, we are unable to comment on current or potential economic developments.” Arlington County Chairman Katie Cristol (D) also declined to comment.

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The move comes as Boeing has faced increased scrutiny from the Federal Aviation Administration in recent years, a shift that came after lawmakers pointed to close ties between regulators and the company after the 737 Max crash in 2018 and 2019. Moving executives to Washington could help smooth out this relationship, but it can also put engineering and manufacturing workers at the forefront, who have previously expressed concern about being overridden on safety issues by business executives and senior FAA officials.

Boeing currently operates a large office in Arlington’s Crystal City neighborhood, less than a mile from the Pentagon and on the outskirts of the district that local officials have called “National Landing.” Amazon is building a second headquarters – also a few blocks away – which is intended to anchor developments in the area.

Boeing’s move to Arlington confirms the predictions of many National Landing boosters, who said that Amazon’s arrival in the area would stimulate economic growth in a neighborhood that has long been considered underused and underdeveloped. Following a 2005 federal panel recommendation to relocate defense contractors, Crystal City lost about 17,000 military and defense workers who occupied about 4 million square feet of office space.

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As part of the pressure to create a high-tech corridor in National Landing, Virginia Tech has planned a new engineering campus in Alexandria’s Potomac Yard area. Last year, Boeing donated $ 50 million to the school for financial aid and other diversity initiatives, and university leaders have also said they plan to work closely with the space company on student projects and career initiatives.

Telling about the company’s plans to relocate, Ed Pierson, a former senior manager at the Renton, Wash., 737 plant, said “the stomach dropped.” He said it will be important for executives to stay in touch with their manufacturing operations in the Seattle area and South Carolina.

“My immediate reaction was that Chicago was very far away, and to think that it went further away was amazing,” said Pierson, who arrived at Congress as a herald after the crash.

Much of the FAA’s attention is focused on the 787 Dreamliner, which is manufactured in South Carolina. Quality problems with the aircraft have accumulated and Boeing has stopped deliveries of the aircraft to customers.

The company said when it published quarterly results last week that it has submitted papers to the FAA that will pave the way for deliveries to start again, but it is still unclear when regulators can give their approval.

Boeing moved its global headquarters to Chicago in 2001, but its commercial aviation division is still headquartered in Renton, Washington, outside Seattle, where the company was founded in 1916.

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