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The Honolulu Advertiser
Posted on: Sunday, May 13, 2001

Experts say Boeing move was overhyped

Associated Press

CHICAGO — Moving its headquarters is fine, but Wall Street wants to know where Boeing is going next.

A Boeing employee leaves the company's Seattle headquarters moments after the company announced its main office would be moving to Chicago, ending weeks of speculation about the aerospace giantâs new location.

Associated Press

In the wake of the theatrical midair announcement that Chicago is its new corporate base, industry experts dismissed the move as over-hyped and, as far as they could see, largely irrelevant to the Boeing Co.'s bottom line.

Analysts remain focused on Boeing's quest to further branch out from its commercial airplane roots.

"The effect on the company's financial results is going to be almost nonexistent," said Joseph Nadol of J.P. Morgan. "It's more of a long-term story — what's their focus going to be in 10, 15, 20 years?"

Like Seattle residents, perhaps, some analysts have had it with the hoopla surrounding the three-city duel for Boeing, in which Chicago nosed out Dallas and Denver.

As Boeing executives returned to Seattle yesterday to prepare for the move of up to 500 employees and Chicago officials rolled up their red carpets, the stock market again barely acknowledged the move.

Boeing shares closed up 6 cents at $66.01 on the New York Stock Exchange.

Although the near-term consequences may be largely symbolic, the move emphatically reinforces Boeing's efforts to be more than a jet maker — and to change its image to reflect the diversification.

Through a series of acquisitions, Boeing chief Phil Condit has been edging away from the company's historic reliance on commercial aircraft manufacturing. One of those recent purchases, St. Louis-based military aircraft maker McDonnell Douglas, will now be just a 50-minute flight away.

Other relatively new ventures include the space business of Rockwell International and, most recently, last fall's purchase of the satellite manufacturing business of Hughes Electronics — now Boeing Satellite Systems.

Boeing also is the top contractor for the international space station.

In addition, Condit has been pushing into more aviation support services.

All those businesses could help cushion the company against increased competition from such rivals as Lockheed Martin, which is vying with Boeing for the Joint Strike Fighter contract — at more than $200 billion, the biggest defense contract ever.