Q&A | An interview with John Warner, who organized the move

John Warner was Boeing's chief administrative officer when he got the task of organizing the search for its new world headquarters. He has lived in Seattle since 1968 and his family, including his grandchildren, are here. He worked his entire career at Boeing and retired in July 2002.

Warner also was in charge of Boeing's corporate charitable giving in this region before and after the headquarters move. In retirement, he's active in civic affairs and philanthropy.

Here is the text of his interview with Dominic Gates on Monday.

Q: What's the main reason Boeing moved its headquarters to Chicago?

A: The primary reason back then was to make sure the corporate headquarters of Boeing would concentrate on the totality of the company and represent itself to the world — and that includes Wall Street and governments around the world — that we are a multifaceted aerospace company.

We needed to deal with perception issues that we were, simply, only a Seattle-based commercial-airplane company. We're far more than that.

And we felt that the role of corporate headquarters would be better fulfilled if we were not in the same area as any of our primary businesses, whether that be military, space or commercial.

We felt it would be inappropriate for headquarters to be in Seattle or Southern California or St. Louis or Philadelphia or any of those places. We wanted to make sure that headquarters was not perceived to be affiliated with only one business unit.

Many organizations, large companies that have multiple divisions, have their headquarters at an independent location. GE certainly was one of those.

One of the reactions of the state of Washington was that our move had to do with the business climate here. The business climate wasn't the reason for our move.

Moving the corporate headquarters doesn't change our tax structure; we only moved 150 employees out of Seattle, it's not a big business unit. So that had nothing to do with it.

However, it is true that there were issues about the business climate in this state. The Governor's reaction was to form the Competitiveness Council, which still exists today. I think that was a positive step for the state.

So an unintended consequence was a good consequence: people began to pay attention to the business climate and the competitiveness of the state of Washington and they continue to do so.

In that regard, one of the reactions was indeed good for all of us. It was a wake-up call that we need to pay attention to the business climate — even though that had nothing to do with the move of Boeing headquarters. This could have been an absolutely wonderful place to do business and we still would have had to move the headquarters for the reasons we discussed earlier.

Q: The jaundiced view was that the move made it easier for company leaders to lay off people from a distance.

A: It's not the corporate headquarters that lays off people. It is in fact the business-unit leaders that have to make the layoff decisions, just as [commercial-airplanes chief] Alan Mulally had to do after September 2001. That was his call.

So it's a misperception of what headquarters does. Labor contracts are negotiated with the business units. There were people in headquarters that had roles to play in that, and still do, but the decisions were made by the business units.

Q: So the move was driven by the spate of mergers in the late 1990s, especially the merger with McDonnell Douglas, and intended to reflect the enlargement and diversification of Boeing?

A: The business strategy of Boeing was through merger and acquisition to expand its presence in the whole field of aerospace. The acquisition of Rockwell, the merger itself with McDonnell Douglas, the later acquisition of Hughes and other smaller acquisitions were all part of the business strategy. As a consequence of those acquisitions and mergers with the expanded business base, it was necessary to communicate the Boeing Co. as a whole represented all of those businesses.

As a consequence of those acquisitions and mergers, more employees of this new Boeing were not in the state of Washington than were in the state of Washington. That tended to be lost on the local community very often.

The success of commercial airplanes under the leadership of Alan Mulally is phenomenal. And as a retiree who depends on the stock of the company, I am extremely pleased. Giving Alan the latitude to run that business was a very good decision, and the results show that.

Q: What's changed? People still think of Seattle as the place where Boeing builds commercial airplanes.

A: That's the case here. If you're in Southern California, where Boeing is or was the largest private employer, is that the way Southern Californians perceive it?

And if you're in St. Louis, the McDonnell family was still running McDonnell Douglas [at the time of the 1997 merger]. They took that name down. If you ask people in St. Louis about Boeing, they'll say 'They are over there at Lambert Field; that's where they make the F-18s.'

I think we Washingtonians have been a little provincial and a little protective. The name of Boeing started here, but remember McDonnell, Douglas, Hughes, Rockwell, all of those companies and the history associated with those names are now Boeing.

They are just as Boeing as Alan Mulally is Boeing. No more and no less.

We've got to recognize this is a new world. This is a bigger company, a better company, a successful company, and it's playing in the global marketplace.

Washingtonians ought to be proud the commercial-airplane business is doing so well and is part of the larger, newer Boeing.

Q: You researched the site-selection process for the move, right?

A: It was still a closely held secret that we were going to move. We hadn't narrowed down the cities. I was trying to get as much information as I could, but I couldn't tell anybody.

So I went down to the downtown Rand McNally travel store and picked up a bunch of books on different cities. Somebody there asked me, 'Why are you buying all these books and maps?' I said, 'Well, I'm looking for a place to locate the corporate headquarters of a large company.' Of course, the fellow didn't have a clue what I was talking about.

Q: How did you respond personally to the reaction in this community to Boeing's move?

A: I was dismayed, of course, but not surprised, at the negative reaction. My job at the time was to make the phone calls to the governor, the mayor and others that we were going to make the announcement later that day. Of course, I got an earful.

When I introduce myself at Rotary or some event, and say I'm the fellow that moved the headquarters, I did the selection process — I always hold up my arms in defense and say, 'You can hit me now.'

And some people look at me with a jaundiced eye. There's still an emotional ring to it. I'm sorry about that. But this is a global world we are in today. It's a different world. Boeing is growing and Boeing is getting better, and so are lots of other companies.

I love it here. This is my home.

There are great opportunities here. I'm optimistic.

Yes, it was traumatic. I had one old-timer tell me, 'Warner, that was a despicable act.'

Q: Has Boeing's investment in community philanthropy here been hit by the move?

A: It has not. When the move occurred, I was still in charge. We made absolutely certain there was not an effect due to the move to Chicago.

Since I am pretty heavily involved in the nonprofit world, I hear reactions very often about Boeing's support of the community. I'm very proud of the company.

Q: Looking back, do you still think the move was necessary?

A: I do. I think it was necessary. I think the leadership of the company has felt that way.

The Boeing Co. exists around the world. It has employees in many, many states. All of those people need to know they are part of the Boeing Co. and that Boeing headquarters is working for the entire company.