Boeing’s move to Virginia will mean few new jobs in DC region

Boeing's move to Virginia will mean few new jobs in DC region
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While Boeing’s chief executive and its financial leader will soon be moving their offices to Arlington, a company spokesman said Friday the aerospace giant’s decision to shift its headquarters to Virginia will not immediately result in the creation of new jobs in the region.

Paul Lewis, a Boeing spokesman, said the company employs 400 people in the Washington area and has space to add more, but “there are no immediate plans to expand the facility here in Arlington.” The company also won’t reduce its roughly 400 employees at Boeing’s outgoing headquarters in Chicago. Nevertheless, Lewis said in an email the move to Virginia was important for the company: “It’s significant in that this will be the base of operations for the CEO and CFO.”

The jet and weapons manufacturer’s decision to relocate was the result of a lengthy lobbying campaign by leaders in the region, reflecting the Washington area’s growing appeal to global corporations. Yet the shift appears unlikely to accompany a major economic boost in the short term.

Amy Liu, a vice president at the Brookings Institution and director of its Metropolitan Policy Program, said the company’s Northern Virginia move is a win for the region — at least in terms of perception.

“It’s a big vote of confidence that this is a community that can hold a global brand,” she said. “Even if there are not major job changes that are attached to the move, the fact that the corporate headquarters is in Northern Virginia means that the company wants to be known and branded in this region.”

She predicted Boeing would eventually add or shift other services to Arlington, eventually adding more jobs. Other companies will see Boeing’s shift as a sign that Northern Virginia is leaving behind its identity as a home only for government contractors, she said, while establishing itself as a high-tech hub.

“It is a market signal that there is momentum in this region in diversifying this economy toward a much more innovative one,” Liu said.

Boeing to move headquarters from Chicago to Arlington, Va.

The move will make Arlington home to five of the nation’s 1,000 largest companies. Boeing’s decision “is a validation of the strengths of our assets in Arlington and how our talented workforce is attractive to these companies,” Cara O’Donnell, a spokeswoman for Arlington’s economic development arm, said in a statement.

Arlington Board Chair Katie Cristol (D) said that despite a lack of new jobs, Boeing’s decision is nonetheless a win for a county that has increasingly tried to fashion itself as a tech hub.

“It’s a really important symbolic victory for Crystal City and for the community,” she said. “It really contributes to not just the perception, but also the reality, that Arlington is emerging as a great place to be if you’re interested in technology, innovation and engineering.”

Even without a major influx of Boeing workers, Cristol said a $5 million company investment at its office on Long Bridge Drive will help to address a chronic issue that has plagued the neighborhood: a high office vacancy rate. After a federal panel in 2005 recommended moving defense contractors out of Crystal City, it lost about 17,000 military and defense workers.

The move underscores Boeing’s relationship with the federal government, relying on Pentagon contracts and Federal Aviation Administration approval for its civilian jets.

The company’s defense business already was headquartered in Virginia, while military contracts accounted for more than half of its $62 billion in sales last year. Boeing makes F/A-18 Hornet jets for the Navy and military adaptations of its commercial planes, including the heavily modified 747 jumbo jet that serves as Air Force One.

In Thursday’s announcement, chief executive David L. Calhoun said the move to Arlington made sense for Boeing, “given its proximity to our customers and stakeholders, and its access to world-class engineering and technical talent.”

Richard Aboulafia, managing director of consulting firm AeroDynamic Advisory, said bringing top executives closer to the heart of the federal government — its biggest single customer — makes sense for a company that had no deep ties to Chicago. But, he said, Boeing’s challenge has never been sway in Washington.

“The problem is their commercial jetliner unit, and this just moves them further away from that,” he said, adding that its problem has been the “de-prioritization of engineering and technical execution” across the board, including in its defense business.

Boeing’s decision follows a trend of global companies gravitating toward the belt of East Coast metro areas stretching from Washington to Boston, said Richard Florida, a professor at the University of Toronto’s Rotman School of Management.

Florida, who has studied the headquarters locations of Fortune 500 companies, found that in 1955, the Washington region was the home base of four of those businesses. By 2017, the number had risen to 17.

Chicago officials were scrambling Friday to understand the effects of the announcement, examining a new company statement Friday that indicated that city’s tally of jobs “doesn’t change.”

When Boeing announced its move Thursday, Chicago Mayor Lori Lightfoot (D) underscored that the company wasn’t leaving entirely. She said 240 companies had moved to the city or expanded operations there since the start of last year, drawn by “our diverse workforce, expansive infrastructure, and thriving economy.” Yet Florida’s figures show Chicago’s losses in hosting the headquarters of the nation’s largest firms, declining from 46 in 1955 to 33 in 2017.

“It’s not a superstar city,” said Florida. “Washington is much more appealing to highly educated people.”

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Boeing’s plans to launch an engineering hub in Northern Virginia could ultimately help the company tap into new pools of technical talent. Lewis, the Boeing spokesman, said the company did not have an estimate of how many jobs that initiative could bring to the region.

The relocation stands in contrast to Amazon’s work to establish a second headquarters nearby, bringing with it about 25,000 jobs. The project will remake a section of Arlington that local officials have dubbed “National Landing,” bringing questions about housing, transportation and gentrification. (Amazon founder Jeff Bezos owns The Washington Post.)

Amazon is spending $2.5 billion on a series of massive construction projects. It is building five new office buildings, plus the futuristic, 355-foot glass Helix on more than 16 acres that will dominate the skyline.

Amazon will bring more than 25,000 workers to the region as it opens its new headquarters. Experts weigh in on how this could impact gentrification and jobs. (Video: Hadley Green/The Washington Post, Photo: Jackie Lay/The Washington Post)

Boeing and its defense operation currently occupy a six-story building and 450,000 square feet a few blocks from Amazon’s building sites and the Pentagon.

As it sought a location for its second headquarters, Amazon asked hopeful cities to come forward with their pitches. Unlike New York, which was widely criticized for offering Amazon about $2.5 billion in economic incentives, Virginia put together a package that focused mostly on building out technology education. The state injected more than $2 billion into its Tech Talent Investment Program, including up to $545 million for Virginia Tech’s new graduate campus in Alexandria.

Liu, from Brookings, said Boeing’s choice to move and establish the tech hub is validation of that strategy. Last year, Boeing donated $50 million to Virginia Tech for financial aid and other diversity initiatives, and university leaders have said they plan to work closely with the aerospace company on student projects and career initiatives.

While Boeing’s move may not immediately place any additional strain on the county’s roads, schools and other infrastructure, Liu said officials must still ensure that the broader shift to luring companies is equitable for residents. Boeing workers’ higher incomes amid the area’s growing population will “create opportunities for the region and also put pressure on it, too,” she said.

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