Boeing, in turmoil, is moving its headquarters. On the 5th local time, Boeing issued a statement confirming that the company Park located in Arlington County, Virginia and adjacent to Washington, D.C. will become Boeing's global headquarters. In addition, the company plans to set up a local R & D and technology center to attract and utilize engineering and technical capabilities.
"Given that the region (Northern Virginia) is close to our customers and stakeholders and has access to world-class engineering and technical talent, the region is of strategic significance to our global headquarters," Boeing president and CEO Dave Calhoun said in a statement
At present, Boeing has not yet come out of the downturn caused by the Boeing 737max aircraft crash. Since the accident, Boeing, which has been unhappy with the Federal Aviation Administration (FAA), has also been subject to stricter regulatory review. Its performance has continued to be weak, and its earnings have been lower than expected in 9 of the past 12 quarters.
Can the move revive Boeing
Alan Lim, project manager of the Singapore Office of Alton aviation consulting, an aviation consulting company, told China business that Boeing has a great influence in Arlington: it is close to the Pentagon.
The benefits of Boeing's relocation include: first, helping to integrate Boeing's commercial, defense and enterprise functions to facilitate the decision-making process and streamline its cost base. Second, as Boeing plans to establish a new research and technology center in Northern Virginia, it will cluster its business and try to attract engineering and technical talent on the east coast of the United States, he explained.
This is not the first time Boeing has moved its headquarters. Attracted by local tax incentives of more than $50 million, Boeing moved its headquarters from Seattle to Chicago in 2001.
More than 20 years later, Boeing moved eastward again and directly moved its headquarters to the "capital circle" of the United States, which will make Boeing closer to the U.S. government and its defense contractor competitors and join Lockheed Martin, general dynamics and Northrop Grumman.
Lin Jingyuan told China business news that Boeing's move will bring its business sector closer to decision makers in the capital Washington area. This will further promote the development of the Department. Data show that the business sector accounts for a large proportion of Boeing's revenue, about 43% in 2021.
However, due to the aforementioned air crash, the relationship between Boeing and the FAA is not good. In 2018 and 2019, more than 300 people were killed in two air crashes caused by Boeing 737max. Since then, discord between Boeing and the FAA has repeatedly appeared in the newspapers. Boeing had hoped to make the Boeing 737max8 go around as soon as possible after the "rectification", but it took nearly two years to wait until the news of the lifting of the grounding order by the Federal Aviation Administration.
At the same time, many important figures in the US Congress also criticized Boeing. Peter DeFazio, chairman of the house transportation and Infrastructure Committee, issued a report in 2020 criticizing the safety mistakes of Boeing and the Federal Aviation Administration.
"Boeing's problem is not the lack of contact with the government, but its continuous production problems and the mistakes of the management and board of directors that led to the crash of the 737max." "Boeing should focus on making safe aircraft - not lobbying federal regulators and Congress," de Fazio said
After Boeing announced the relocation of its headquarters, its share price did not rise. On the 6th, US stocks closed, and Boeing shares fell 1.04% to $148.90.
On April 27, Boeing reported a loss of US $1.219 billion in the first quarter of fiscal year 2022, with an operating revenue of US $13.991 billion, a year-on-year decrease of 8.06%.
In an interview with China business news, a civil aviation researcher said that at present, Boeing has civil aircraft group, defense, space and security group, global service group and financial companies. In his view, Boeing's performance has continued to be weak in recent years, which is mainly affected by four factors: damaged brand image, tense international relations, impact of the epidemic and weak product competitiveness.
Taking the civil aircraft business as an example, the 737, a Boeing classic civil aircraft series, has product defects, which has damaged its brand image. He explained, "12 quarters ago, it happened that the 737max aircraft crash occurred in Ethiopian Airlines. The 737max aircraft crash of lion air Indonesia and Ethiopian Airlines exposed the nonstandard airworthiness review work of the Federal Aviation Administration and Boeing, the lax design process of Boeing civil aircraft products and disregard for the core interests of customers, resulting in the grounding of 737max aircraft in many countries around the world."
Secondly, the demand for civil aviation passenger transport under the influence of the epidemic continues to be depressed. Airlines have contracted passenger transport business, grounded large passenger aircraft, reduced passenger aircraft orders and delayed receiving aircraft, which directly affected the order volume and delivery volume of Boeing passenger aircraft. In addition, some geopolitical problems have also affected the sales of Boeing civil aircraft.
He added that at present, the large civil aircraft market is monopolized by Boeing and Airbus. In recent years, Boeing's main civil aircraft models have appeared design defects, production quality problems and air accidents, and users have lost confidence in Boeing's civil aircraft performance and delivery ability. Airbus, on the other hand, has gradually expanded and seized the territory with its more reliable products and continuously optimized manufacturing capacity, widening the gap with Boeing. For example, "at last year's Dubai air show, Airbus received orders for 397 airliners, while Boeing received orders for only 78 airliners." He said.
As for how Boeing can regain its momentum, Lin Jingyuan believes that regaining the confidence and trust of customers and regulators is crucial to Boeing's rebound. The problems of Boeing 737max and the defects of 787 have partly led to its weak performance in the past few years.
"It is crucial for Boeing to focus on product safety and quality." Lin Jingyuan told the first financial reporter, "although the recovery of air traffic demand and the operation of the new 777x aircraft will provide support for Boeing's medium-term performance, Boeing will have to focus on improving its product strategy in order to compete more effectively with Airbus in the future, continue to attract strong engineering and technical talents and further strengthen its core capabilities."
The aforementioned civil aviation researchers also told the first financial reporter that Boeing should focus on the improvement of its own R & D capability, improve the market competitiveness of products and layout new products.
"At present, many Boeing products are in big and small difficulties. We need to solve the problems and return to the market as soon as possible. In addition, we also need to pay attention to the market development trend and lay out product development in advance." He explained that taking civil aircraft as an example, many countries are making efforts to achieve the zero carbon goal of the air transport industry in 2050. Among the various aircraft carbon reduction methods currently proposed, Boeing has chosen the earliest technology path that can be applied, namely sustainable aviation fuel (SAF), in order to achieve carbon emission reduction of civil aircraft in a short time, so as to enable Boeing to improve its civil aircraft business in a short time, In the future, we need to further explore the application of cleaner energy in the field of aviation.