Boeing Selects Chicago for Its New Headquarters After Considering Dallas and Denver

AP Business Writer

SEATTLE (AP) -- Boeing Co. (NYSE:BA - news) said Thursday that it would move its headquarters to Chicago, ending weeks of speculation fueled by the aerospace giant's decision to leave this city where it was founded in 1916.

Chicago was chosen over Dallas-Fort Worth and Denver.

Boeing executives planned a joint appearance with Illinois Gov. George Ryan and Chicago Mayor Richard Daley Thursday afternoon, according to Ryan's office.

``We looked at three very exciting metropolitan areas in which to base our company,'' Boeing chairman Phil Condit said. ``It was a very difficult decision.''

The company plans to move Sept. 4 to its new headquarters at 100 North Riverside Plaza, in downtown Chicago.

The announcement came after Boeing executives boarded their corporate jet at Seattle's Boeing Field on a flight to Chicago.

``Any of these three cities would have worked -- including Seattle if it weren't co-located with our commercial airplane headquarters,'' said John Warner, the Boeing senior vice president and chief administrative officer who led the company's site selection team.

Boeing will move a staff of fewer than 500 people, about half the size of its current corporate staff. The company's new, leaner headquarters are expected to focus on developing global growth opportunities and making the company more cost-efficient.

Texas Gov. Rick Perry congratulated Chicago on its selection. ``All Texans knew from the outset that the competition with Chicago and Denver would be fierce.''

Analysts said the choice made sense from a geographic standpoint.

``I think that it's without much question the more convenient location,'' said Paul Nisbet, an analyst with JSA Research.

But they also said it would have virtually no impact on how they value the company. ``It's irrelevant to the way I look at the stock,'' said analyst Byron Callan with Merrill Lynch in New York.

The three cities had been competing for the aviation giant's new headquarters since March, when Boeing announced plans to move from its home of 85 years to save money and be more central to its operations in 26 states. Each city offered millions of dollars in tax breaks and other incentives and enlisted the help of sports stars and business leaders to woo the company.

The company will keep its massive aircraft factories and design and development facilities in the Seattle area.

Boeing has said the relocation is meant to save money and establish headquarters more centrally located to its operations, spread over 26 states.

Chicago had been eager to land Boeing, both for the prestige of adding another world-class business along with McDonald's Corp., UAL Corp. (NYSE:UAL - news), Motorola Inc. (NYSE:MOT - news) and Sears Roebuck and Co., and to reverse a recent trend that has seen it lose several corporate headquarters, including Amoco Oil Co. and Montgomery Ward.

When Boeing executives came to town last month, Chicago officials threw them a dinner party at the Art Institute of Chicago complete with string quartet from the Chicago Symphony Orchestra and a children's choir serenading them with ``My Kind of Town.''

The Illinois governor offered $4 million to $5 million in tax incentives to woo the aerospace giant. Boeing, which is expected to earn about $3 billion this year, also could receive 15 years of state income tax credits, estimated at $25 million to $30 million.

Shares of Boeing were trading up 58 cents to $65.58 in trading on the New York Stock Exchange.

[Chicago ATC News]