Amazon’s announcement that it will build a second headquarters elsewhere to mirror its massive Seattle campus was as explosively unexpected as Boeing’s announcement in March 2001 that it would move its headquarters.
Amazon’s announcement that it will build a second headquarters elsewhere to mirror its massive Seattle campus was as explosively unexpected as Boeing’s revelation in March 2001 that it would move its headquarters.
On that morning, less than a month after an actual earthquake had rattled the city, Boeing Chairman Phil Condit shook the city again. Speaking at a Washington, D.C., news conference, he delivered news that neither veteran Boeing watchers nor any other outsider had any inkling was coming.
Seattle Mayor Paul Schell and Gov. Gary Locke were equally blindsided.
With Boeing’s blow to the city following closely on the Nisqually earthquake, Schell told The Seattle Times, “I’m waiting for the locusts.”
Some parallels to Amazon’s decision are clear, but there are important differences too.
For a start, the prize for the city that wins the Amazon contest will be much, much richer: It promises a $5 billion investment, as many as 50,000 high-paying jobs, an expectation of kindling more growth, and the immediate prestige of digital technology leadership.
In his 2001 announcement Condit named Chicago, Dallas and Denver as the leading contenders and invited proposals from each city. When Chicago came out on top a few months later, only a few hundred corporate jobs shifted from the Seattle area to a skyscraper in the Windy City. Boeing’s manufacturing sites were never part of the move.
At the time, Boeing employed 79,000 people in Washington state. By 2012, that figure had risen to 87,000.
The most significant difference in the two corporate maneuvers may be more psychological: Amazon is not “moving” its headquarters. It’s duplicating it.
That is significant because while Amazon hasn’t signaled dissatisfaction with Seattle, Boeing’s move betrayed a deep unease about the city.
There had been earlier indications of that unhappiness. Condit’s predecessor, Frank Shrontz, in a 1991 speech warned that unless the state’s business climate improved, the Puget Sound region could become “an aerospace rust belt in the 21st century, complete with padlocked factories, unemployment lines and urban blight.”
And as Condit explained in 2001 and later, the headquarters move was made to create psychological distance between the corporate leadership and the manufacturing sites on the ground.
There also was a suspicion that the corporate and political climate of Chicago — its more conservative, business-friendly bent; its expensive steakhouses where macho titans of industry could talk over cigars and scotch — would better suit the taste and personality of men like Boeing’s then-president, Harry Stonecipher.
From their airy perch in Chicago, Boeing’s leaders could — and did — make steely decisions about where to locate work or where to make layoffs at a safe remove from the people affected on the ground.
The impact of that detachment from Seattle is apparent today, when Boeing’s total employment in the state has sunk to 67,000.
The recent sharp decline is due partly to cyclical trends in the airplane industry but also to Boeing’s leadership moving work to other states to reduce costs.
Of course, if Amazon in 10 years has twin headquarters in Seattle and say, Boston, its leadership will have a similar psychological freedom. When deciding where to make their next big investment, they’ll be equally able to play one city off against the other in asking for incentives — and almost certainly will do so.
A different Boeing parallel to Amazon’s announcement is the jet maker’s decision in 2009 to build a second airplane assembly site in North Charleston, South Carolina, which has developed into a thriving, multisite manufacturing campus with more than 7,000 employees.
That move was unambiguously driven by a negative animus toward this region. Then-chairman Jim McNerney was enraged by the disastrously ill-timed Machinists strike of fall 2008, which began just as the global financial crisis reached a melting point. He wanted future leverage over the unions, and with that move he got it.
Yet the impact of building an alternative airplane-manufacturing site went well beyond the weakening of Boeing’s unions.
Washington state had been where Boeing built airplanes since 1916, and the decline of other plane makers had left the Puget Sound region as the sole site in the United States where commercial airplanes were built.
The inertia of that 100-year history, the comfortable assumption that “this is where Boeing makes its planes,” was overcome when South Carolina rolled out its first 787 Dreamliner in 2012.
Since then, nothing can be taken for granted. There is grave doubt that future Boeing airplanes after the 777X will be built in this region.
There is one more Boeing parallel with the Amazon announcement, this one more exact: the mad city-versus-city contest that is ahead.
In February 2003, Boeing for the first time declared such a contest when it put the location of the original 787 Dreamliner assembly line up for bids.
Like Amazon today, Boeing issued a detailed request for proposals, to which 22 states responded, most of them offering multiple cities as possible sites.
That December, to a huge sigh of relief in Washington state, Everett won.
But in the eight months before that outcome, the frantic competition was covered intensely by national media and made for multiple front-page stories in Seattle’s papers. Reporters went to five states to size up the competing sites shortlisted by a secretive search team.
Expect even more secrecy this time around with Amazon, which keeps its cards even closer to the vest, and as much intense interest in which city will win.