M ay 22, 2001. I remember that morning well.
I woke up early and drove to Seattle for a breakfast meeting at the University of Washington Business School. Boeing Co. Chairman Phil Condit was scheduled to speak, but he bowed out at the last minute. A US Bank executive filled in, and she was interesting.
After that, I played a little hooky, sneaking off to a Pike Place Market bistro to meet a pretty woman for coffee, which we dawdled over, eventually ordering French toast and sausages as we chatted at a window table, enjoying the spring sunshine.
All was well with my world as I walked back to my car, passing cheerful rows of fresh-cut daffodils arrayed along the sidewalk. That is, until I started my car and the radio came on with KIRO-AM’s Dave Ross saying “we’re going to replay the tape of the shocking news from Boeing.”
That’s when I learned why Condit had canceled that UW speech; he’d gone to Washington, D.C., to announce that he was restructuring Bill Boeing’s jet company and moving its headquarters out of the Puget Sound area.
After that, the memory gets blurry, but I distinctly remember filling my car with loud curses most of the way to I-5.
It’s been five years since that morning, and a lot has changed.
Condit and his successor, Harry Stonecipher, both are gone. The aerospace industry has gone through a nose-dive caused by the 2001 terror attacks and is now on the rebound. Boeing has lost market share to Airbus but is seizing it back, thanks to the 787, a new commercial airplane that wasn’t even a twinkle in Condit’s eye back in spring 2001.
Boeing’s headquarters move has paid off, analysts say – at least for the company’s top executives.
Now, if chief financial officer James Bell needs a face-to-face meeting with Wall Street, he can fly there from Chicago for the day. When Boeing was based in Seattle, that was basically a three-day trip, noted Leeham Co. analyst Scott Hamilton.
And when the headquarters moved to Chicago, that removed the constraints on Alan Mulally, Boeing’s commercial airplanes chief, said analyst Paul Nisbet, with JSA Research.
With corporate headquarters next door, Mulally “was being second-guessed,” Nisbet said. The move allowed him to run the commercial airplanes business his way, and he’s “done a damn good job so far,” Nisbet said.
But at the same time, the headquarters move didn’t change much of anything else, other analysts said.
It may have sent an important message to Wall Street, said Teal Group analyst Richard Aboulafia. But long-term, the more important thing has been “bringing in new business and making the numbers,” he said.
“They did well, and their performance was driven by a lot of factors – almost none of them related to Chicago.”
“Do customers care two hoots in (heck) whether Boeing’s headquarters is in Seattle or Chicago?” Hamilton asked. “They buy their airplanes from Seattle. They don’t buy their airplanes from Chicago.”
The one tangible outcome of the headquarters move was that it galvanized the state’s leadership in Olympia, said Bob Toomey, an analyst with E.K. Riley in Seattle.
As a result, when Boeing started searching for a new place to build the 787 in 2003, lawmakers took it as a serious threat and responded with legislation that kept Boeing in the Puget Sound region.
In that respect, we could view it as a trade: We lost a couple of hundred executives to Chicago but got a new airplane program.
“One of the greatest manufacturing companies in the world is still here,” Toomey said. “It was a good trade-off for the economy, and keeping jobs in Puget Sound.”
Meanwhile, in my world, things are mostly well again. I got an e-mail from the pretty woman last week. She’s married now, and she and her husband are expecting a baby.
I’m going to play hooky again this week and take a day off to go skiing. And when I took a bike ride recently, I passed another row of cheerful-looking daffodils blooming at the entrance to a new subdivision in Marysville.
But I can tell you one thing for sure: Just to be safe, I’m not listening to the radio all day today.
Reporter Bryan Corliss: 425-339-3454 or corliss@heraldnet.com.
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