CHICAGO (CBS) -- Boeing announced Thursday that it is moving its global headquarters from Chicago to Arlington, Virginia just outside Washington, D.C.
The aerospace giant already has an office in Arlington's Crystal City district, where employees support a variety of corporate functions and work on advanced airplane development and autonomous systems, according to a news release.
Moving headquarters to Arlington will bring Boeing closer to key customers such as the Pentagon and Department of Defense officials, the company said. The move will also place Boeing closer to federal regulators.
In addition to moving the company headquarters to the Arlington campus, Boeing also plans to develop a research and technology hub in the draw engineering and technical talent.
Boeing is not leaving Chicago altogether. The news release said the company will maintain a "significant presence" at its Chicago office at 100 N. Riverside Plaza in the West Loop Gate.
"We greatly appreciate our continuing relationships in Chicago and throughout Illinois. We look forward to maintaining a strong presence in the city and the state," Boeing President and Chief Executive Officer Dave Calhoun said in a news release.
Boeing said it has implemented "flexible and virtual solutions" so that not everyone needs to be in the office anymore and less office space is needed. At the Chicago Boeing office, less office space will now be required for the employees who will be based there.
"In today's business environment, we have adopted a flexible work strategy in parts of our company and are taking steps to be more efficient within a reduced footprint. This helps us channel investments toward our critical manufacturing and engineering facilities and training resources," Calhoun said in the news release.
The news release did not specify what exactly will be involved in Boeing's plan to downsize its space in Chicago.
Mayor Lori Lightfoot issued the following statement in reaction to the Boeing announcement:
"Chicago is a world-class city and in the last year, 173 corporations relocated and expanded here, and 67 corporations have made that same decision to since the start of 2022. While Boeing has decided to move their headquarters to another city, they will still maintain a presence in Chicago. We have a robust pipeline of major corporate relocations and expansions, and we expect more announcements in the coming months. What remains to be true is that Chicago is a major hub for global operations that recognize our diverse workforce, expansive infrastructure, and thriving economy."
Illinois Gov. JB Pritzker's office released the following statement:
"Illinois' incentives for Boeing's headquarters in Chicago ended in 2017. While we would have preferred to have discussed options with the company before news broke of its move, we will continue to support other Boeing work in the state, including the 300 new jobs at the Navy's Stingray project downstate."
Sources said in conversations with the state, Boeing confirmed the state's business climate was not a deciding factor in its decision to move its headquarters.
Boeing moved its world headquarters from Seattle to Chicago back in 2001.
The company also has a large hangar at the Gary/Chicago International Airport to house some of its corporate planes.
At the time, luring Boeing to Chicago was a highly competitive process.
Then-Gov. George Ryan was at the bottom the stairs to greet Boeing executives as they picked Chicago back then. CBS 2's Charlie De Mar caught up with Ryan on Thursday.
"We offered them everything that we could afford to offer them, and we worked out a deal and – and they came, and it was a great program," Ryan said. "I'm sorry to hear they are leaving."
Gov. Ryan was instrumental in bringing Boeing to Chicago. The airplane manufacturer was offered a controversial $60 million tax break package over about a 20-year span. But as noted by the Pritzker's office, those incentives have now expired.
"I'm sure we wouldn't have made the deal if we didn't think it was good for Illinois," Ryan said.
Paul O'Connor, at the time executive director of World Business Chicago, led the city's marketing effort to lure Boeing — beating out Dallas and Denver.
"If felt like a championship season – everything came together," O'Connor said.
He chooses to focus on how Chicago benefited from Boeing's move back in 2001.
"You'd have to put it in the context of all the good that they did, and how much they lifted us up strategically in those 20 years," O'Connor said.
The move also comes as the company has faced a handful of controversies. Its 737 Max airliners were grounded after two crashes that killed hundreds of people, and production flaws have slowed down delivery of the 787 Dreamliner.
"The company is really focused on Washington -- both with regulatory safety approvals, but also to get a piece of Washington's financial support," said DePaul University transportation expert Joe Schwieterman.
Schwieterman added that in some ways, reality did not live up to hopes when it came to Boeing moving its headquarters to Chicago.
"It was a big feather in our cap having Boeing here, but the magic of Boeing never, I think, reached what they hoped. Their heart was still in Seattle," Schwieterman said. "It's a blow for our city; I mean, for our ego, you might say."
"People should just move on, and they should move on positively, with boldness, and move to the next chapter," O'Connor added.
Boeing was founded in Seattle in 1916 by timber scion William Boeing, who initially built wooden seaplanes.
for more features.