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Boeing won’t even consider moving HQ back to Seattle



Samuel Corum/Getty Images

Chris Isidore, CNN
Thu, April 11, 2024 at 4:00 AM PDT

It’s been a brutal six years for Boeing, with two fatal jet crashes kicking off a series of safety crises — and raising concerns about the quality and safety of the planes rolling off its assembly lines.

As Boeing scrambles to repair its reputation, some critics and shareholders are asking: Why not move headquarters away from the shadow of Washington, D.C., and back home to its roots in Seattle?

But Boeing has now made clear: We are not interested.

An individual Boeing stockholder, Walter Ryan, wanted to put the question of a move up for a vote during the company’s May 17 annual shareholder meeting. He filed his proposal in October for the shareholder vote, which would have been non-binding — but in February, Boeing went to the Securities and Exchange Commission, ultimately winning approval to block the vote.

Ryan, who owns 10,000 shares of Boeing stock, lives in Las Vegas and has never been to Seattle. But he believes that if Boeing is to fix its current quality and safety problems, the company’s top management should be back in Seattle — near where most of its commercial aircraft are still manufactured.

“I think they need some hands-on overseeing, and by som ebody who has skin in the game,” Ryan told CNN.

Boeing’s corporate offices had been in Seattle from its founding in 1916 until it relocated to Chicago in 2001. Then in 2022, Boeing corporate moved again — this time to Arlington, Virginia, near the Pentagon and across the river from Capitol Hill. Most manufacturing, however, remains more than 2,300 miles away in Seattle.

“They want to be next to government,” Ryan said. “Is that a sound idea? I don’t think so.”

It isn’t only shareholders like Ryan who believe a return to Seattle would benefit Boeing.

“Part of it would be symbolic,” said Shem Malmquist, a Boeing 777 pilot and instructor of aviation safety at Florida Tech. “But it’s also going to be better culturally. In the end, the closer the top management is to the production and what’s going on and the engineers, the better.”

Boeing’s response

In his proposal he wanted presented to shareholders, Ryan said the corporate move from Seattle and separation from the core manufacturing business resulted in major issues related to “engineering and quality problems, and Boeing’s historic credibility,” — concerns he said are now foremost “in the minds of both travelers and shareholders.”

Ryan wrote the proposal even before a headline-grabbing incident in January, when the door panel of a Boeing 737 Max blew off in the middle of an Alaska Airlines flight, later found to be because the aircraft left the factory missing crucial bolts needed to keep it in place.

Boeing’s attorneys argued to the SEC that this isn’t an appropriate issue for shareholder vote: “The proposal seeks to ‘micro-manage’ the company by probing too deeply into matters of a complex nature upon which shareholders, as a group, would not be in a position to make an informed judgment.”

Further, Boeing’s attorneys dismissed the premise of Ryan’s argument, calling it “an unsupported theory that certain manufacturing issues experienced by Boeing would have been avoided simply because the company’s headquarters were located in a particular city, emphasizing, among other things, management’s ability to walk the factory floor.”

The SEC agreed that Boeing it did not need to put Ryan’s proposal on its proxy statement, which was released Friday. Boeing told CNN it did not have any comment beyond those included in its filing to the agency.

Ryan said he believes his proposal — which would have allowed shareholders only to “recommend” a move back to Seattle, not mandate it — would have won had it been put up for a vote.

“That’s why I sent it in. I thought it would pass, and thought it would be a good idea,” he told CNN.

Speaking broadly, however, even shareholder proposals that are put to a vote are not likely to pass — especially recently.

According to Institutional Shareholder Services, which tracks shareholder votes, only 5.4% of votes held in 2023 on shareholder proposals received majority support. That’s down sharply from 12.6% in 2022, and 19.5% in 2021.

finance.yahoo.com