WSJ News Exclusive | Boeing Plans to Move Headquarters to Arlington, Va., From Chicago

Boeing Co.

BA -3.92%

is expected to move its headquarters to Arlington, Va., from Chicago, people familiar with the matter said, a shift that would bring the aerospace company’s leadership closer to top federal officials after a challenging period for the plane maker.

An announcement of the move, details of which haven’t been finalized, is expected as soon as next week, according to some of these people.

Northern Virginia is already home to many of the largest U.S. military contractors, and the local property and labor market has been fueled further by Inc.’s

decision to locate one of its satellite headquarters there.

Boeing has for months been in talks with the office of Virginia Gov.

Glenn Youngkin,

who has been working to woo the plane maker and other businesses to the commonwealth, according to a state official. While details of Boeing’s agreement with the state aren’t final, they aren’t expected to involve significant financial enticements but may include workforce-related incentives, the official said.

Many of Boeing’s senior executives have increasingly been working out of its Washington, D.C., area offices in recent years. Boeing in 2017 said it would move its defense unit’s headquarters to Arlington from St. Louis to be nearer lawmakers and Pentagon procurement officials, with government affairs and other staff also working from the office complex opened in 2014.

Boeing’s proximity to Washington, D.C., would follow years of sometimes strained relations with various federal agencies and elected officials.

The Federal Aviation Administration, based in Washington, has increased scrutiny of Boeing since two of the company’s 737 MAX jets crashed in 2018 and 2019. The air-safety regulator prevented the company from returning the MAX jets to service for nearly two years. More recently, the FAA has withheld approvals needed to resume 787 Dreamliner deliveries that have been halted because of production problems.

Boeing has also dealt with problems tied to various defense and space programs in recent years. Military contracts accounted for more than half of Boeing’s $62.3 billion sales last year.

Boeing’s decision to move its corporate headquarters to Chicago from Seattle in 2001 was symbolic of its desire at the time to be seen as more than just a maker of commercial jets. The company acquired rival McDonnell Douglas in 1997, adding military jets and other military equipment to its portfolio.

Chicago beat out competition from Dallas and Denver, aided by a package of city and state incentives and tax breaks. Boeing’s incentives for moving to Chicago had been expected to end last year, people familiar with the matter said.

The move to Chicago created geographic distance between the company’s top corporate leaders and its commercial-jet hub in the Puget Sound region. Since then, the company has shifted all of its 787 Dreamliner production to a factory in North Charleston, S.C., while situating its recently formed services arm in Plano, Texas.

Boeing moved only some of its senior corporate and finance staff to Chicago, and the pandemic has further shrunk the ranks working in its 36-story tower there, which is adorned with the company’s logo. Almost 56,000 work in Washington state, the hub of Boeing’s commercial jetliner business.

Write to Andrew Tangel at [email protected] and Doug Cameron at [email protected]

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