Seattle and Boeing were together for decades until Chicago came along. But after the company moved its headquarters from a cloudy city to a windy one, it struggled.
Was it us? The deep-dish pizza and Italian beef? The ongoing wait for another Super Bowl title?
As this iconic aerospace giant tries to regain altitude after yet another turbulent stretch, it’s fair to ask if its move to Chicago in 2001 put it on the wrong course altogether.
When then-Mayor Richard M. Daley announced that the city had won a bidding contest for Boeing’s headquarters, Tribune editorial page joined in the celebration. The company got over $60 million in public incentives for moving its boardroom to the Loop. Chicago got bragging rights.
The move made sense to us at the time. Chicago gave Boeing’s leadership team the convenient, centralized transportation hub they were missing in the Pacific Northwest. Settling in a more global city with a financially savvy workforce was widely considered a plus as well. Moving out of Seattle also put almost 2,000 miles between the company’s top brass and its restive unions, which might have been one of the biggest attractions from the corner-office point of view.
As it turned out, though, the move seems to have undermined an engineering-friendly culture focused on design, safety and quality. In retrospect, separating from the critical mass of aerospace experts in Seattle isolated the company’s leaders from the heart of their business.
Apart from the move to Chicago, the other “X factor” in that transformation was Boeing’s 1997 acquisition of McDonnell Douglas, a company better known for financial engineering than the aerospace kind. Its priorities were quarterly profits and returning money to Wall Street shareholders — priorities Boeing embraced after the deal closed, appointing a string of chief executive officers who collected massive paychecks but cut corners in making planes.
One outcome of this change was the decision to upgrade a popular passenger jet instead of designing a new one with all the latest advances, as the perfectionists at old-school Boeing no doubt would have preferred. Extending the life of its workhorse 737s helped Boeing’s bottom line in the short run. Over time, that approach opened the company to serious problems, including the notorious 737 MAX crashes.
In October 2018, this newly modified version of the old 737 jetliner crashed near Indonesia. Five months later, another new 737 MAX crashed in Ethiopia. Boeing had reconfigured the MAX model with bigger engines that affected its aerodynamics, and federal regulators had given the company too much control over certifying the new design. A faulty flight-control system forced down the two planes despite their pilots’ desperate efforts to keep them aloft, killing a combined 346 aboard.
Instead of taking responsibility, the company reportedly tried to blame the foreign airlines and resisted grounding its MAX fleet in the interest of safety. Then-CEO Dennis Muilenburg spouted insincere baloney about safety being a core value, until he was finally ousted by a board that paid him off with a $62 million exit package.
In the waning days of the first administration of President Donald Trump, Boeing reached a settlement with the Justice Department that protected it from prosecution over the MAX crashes. Shortly after, in 2022, the company moved from Chicago to Arlington, Va., closer to its No. 1 customer: Uncle Sam.
Last year brought another shocking safety gaffe, when a door panel blew off in midair from a 737 MAX 9 operated by Alaska Airlines. A few months later, federal prosecutors determined that Boeing had violated its deferred prosecution deal by failing to implement a compliance and ethics program.
In response, Boeing agreed to plead guilty to criminal fraud, but a federal judge in Texas rejected the plea deal because it included diversity goals. Now, with Trump back in power, Boeing appears likely to receive a lighter settlement that avoids a criminal plea. During a recent Middle East trip, Trump also publicly promoted Boeing jets — a reminder of the company’s political clout and close ties to its largest customer: the U.S. government.
Cozying up to a pro-defense administration may be giving Boeing’s stock a boost, but it won’t restore public trust or prevent future failures.
Boeing recently published the sad results of an all-employee survey, its first in years. Most Boeing employees said they lack faith in senior leadership, and barely a quarter recommend the company as a good place to work. That’s a big comedown from the old days.
Still, Boeing stock has bounced back strongly this year and its newish CEO, Kelly Ortberg, says he is putting the company’s problems behind it. Earlier this month, Ortberg told Wall Street that he’s introducing “new values and behaviors to the entire organization,” vowing to “seize the moment to make the necessary changes within the company.”
Ortberg also reportedly bought a house in Seattle last year, which we consider a positive step.
If Boeing was going to move the headquarters anywhere from Chicago, and if it was serious about rebuilding its culture, it probably should have moved back to Seattle. Still, its time here left a positive mark: Boeing supported civic institutions, hired local talent and helped elevate Chicago’s stature as a center for global business.
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