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Thursday, May 10, 2001 - Page updated at 12:00 AM

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Boeing's new headquarters: Chicago

Seattle Times aerospace reporter

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Boeing officially chose Chicago as its new world headquarters today, disappointing two other suitors and leaving a legacy of mixed emotions in its hometown.

Boeing's new address at 100 N. Riverside Plaza in downtown Chicago is just the latest switch in a corporate makeover that Boeing says will enable it to grow and prosper in ways that it could not in Seattle.

Boeing Chairman Phil Condit and Chief Administrative Officer John Warner - the two key figures in the headquarters hunt - flew to Chicago this morning to make a joint announcement with local and state officials there. A press conference was planned for noon Seattle time (2 p.m. in Chicago).

The executives then planned to tour their new home office, which had been vacant for two years since its former occupant, Morton International, left town after a merger.

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"We looked at three very exciting metropolitan areas in which to base our company," Condit said. "In the end, we looked at all the data and made what we believe is the right choice for Boeing."

Illinois reportedly offered as much as $20 million in tax incentives to lure Boeing, which works out to about $40,000 for each of the 500 corporate employees expected to relocate. The actual number of people who move to Chicago from Seattle could be as low as 350, as some might opt to stay and find other jobs with Boeing or leave the company altogether.

Headquarters employees in Seattle, many of whom now must decide whether to move to Chicago, offered mixed reactions.

Employee Joy Tomas told KIRO television that she had received an offer to move just this morning but won't be going. Asked why, she said, "Because Seattle is my home and I think it should be Boeing's, too."

Officials in Dallas/Fort Worth and Denver, the other two cities Boeing considered for its move, greeted the news with disappointment and disbelief. In Seattle, the head of Boeing's biggest union said he was already looking ahead to focusing on preserving Boeing's remaining presence - and jobs in the Puget Sound area.

"This union will focus our energy on building a relationship with Alan Mulally - the new CEO of Commercial Airplanes and ensure our members have jobs," said Mark Blondin, president of International Association of Machinists and Aerospace Workers District 751. "I have spoken with someone from Alan Mulally's office to schedule a meeting to discuss the future of Boeing jobs in the Puget Sound region. We hope to work with Boeing to keep building Boeing planes right here in Puget Sound, including the new Sonic Cruiser, with the most highly skilled aerospace workers in the world."

The company's engineering union, the Society of Professional Engineering Employees in Aerospace (SPEEA), expects to make a few trips to Chicago over the next year to deal with corporate executives, spokesman Bill Dugovich said.

"We are under few illusions. ... Corporate is still going to be involved and we know that," he said.

Still, "Our hope is that this will free the commercial airplane company to have a freer hand in dealing with their own affairs," he said.

The choice of Chicago had become almost a foregone conclusion in recent days. But although Denver was never deemed a serious contender, the prize could well have gone to any of the three cities. That's because Boeing's move was spurred not so much by specific needs, but largely by a desire to simply get away from Seattle so that the headquarters executives would be distanced from all of Boeing's operating units.

Boeing's commercial airplanes group, which employs most of the company's 78,000 workers in Washington state, is based in Renton. Boeing said the parent company's proximity to its biggest operating division stifled the company's potential growth in new ventures and disadvantaged Boeing's military and space-and-communication units, based in St. Louis and Seal Beach, Calif., respectively.

Moving to Chicago has tradeoffs for Boeing, too. The company is Washington's largest private employer and a powerful force in Olympia. It remains to be seen what kind of clout a small group of executives and corporate employees will wield in Chicago.

Washington Gov. Gary Locke said in a prepared statement, "I'm gratified that The Boeing Company plans to maintain its commercial operations in Washington, operations that provide nearly 80,000 family-wage jobs in research, development, and manufacturing."

He also stressed that Washington is a good state for businesses - a sore subject because Condit and other Boeing officials have repeatedly criticized the state as not being friendly enough to corporations, even though they insisted their move was not due to the business climate.

"Washington state continues to lead the country in new business start-ups," Locke said. "In 2000, we once again received an 'A' on a national report card for economic development from the Corporation for Enterprise Development."

Warner offered this consolation: "Any one of these three cities would have worked - including Seattle if it weren't co-located with our commercial airplanes headquarters. We would recommend highly that other firms on a similar quest put these four cities on their short list."

In Olympia, the reaction among legislators was muted compared to the anger lawmakers expressed after Boeing's original announcement of the move March 21. The reaction made it clear politicians had largely gotten used to the fact that Boeing was leaving.

"They didn't pick us. That's all that matters," said Senate Minority Leader Jim West, R-Spokane.

"I thought they had a problem with traffic," West said about Boeing's decision to move to a city with 2.9 million people.

Senate Majority Leader Sid Snyder, D-Long Beach, said he thinks the aerospace company might one day "realize it wasn't so bad working with the Washington state Legislature."

Chicago politics, after all, are legendarily far more cutthroat and less amiable than in the Northwest.

"I think they will find that dealing with the city government and the Legislature in Illinois won't be any picnic," Snyder said. "No hard feelings. I'm just disappointed."

House co-Speaker Clyde Ballard, R-East Wenatchee, said he's still worried about the possibility that Boeing will move more jobs out of Washington state.

"I thought Seattle was a good place for them to be. I'm disappointed," Ballard said. "I can't second-guess them. My concern is what's going to happen with them in the future," he said, referring to the large employee base here.

Kyung M. Song can be reached at 206-464-2423 or ksong@seattletimes.com.

Seattle Times staff reporters David Postman, Steve Miletich and Ralph Thomas contributed to this report.

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