Boeing to move headquarters from Chicago to Arlington, Va.

Boeing is moving its headquarters from Chicago to Arlington, Va., according to two people familiar with the deal, a sign the aerospace giant is leaning into its military wing and better positioning itself to navigate the political quagmire.

The move, first reported by The Wall Street Journal, could be announced formally as soon as next week.

It also comes as Boeing struggles to shrug off financial burdens from the 737 Max, the pandemic’s smothering effect on travel and the fallout from severing ties with Russia. The company reported a $1.2 billion loss in the first quarter.

The move was confirmed by two people familiar with the deal who spoke on the condition of anonymity because the company had planned to wait until next week to make the announcement.

Boeing did not immediately respond to a request for confirmation from The Washington Post.

The administration of Gov. Glenn Youngkin, R, has been working for the past couple months with Boeing to lure the company to the state, according to the two people, who said the governor, a former Carlyle Group executive, has a personal relationship with Boeing President and chief executive David L. Calhoun.

The state has not offered Boeing any “significant” financial incentive to the company, the two said.

Arlington County spokesman Jessica Baxter said in a statement that “for competitive reasons and to protect confidential company information, we cannot comment on current or potential economic development prospects.” Arlington County Board Chair Katie Cristol, D, also declined to comment.

The move comes as Boeing has faced heightened scrutiny from the Federal Aviation Administration in recent years, a shift that came after lawmakers pointed to close ties between regulators and the company after 737 Max crashes in 2018 and 2019.

Moving executives to Washington could help to smooth that relationship, but it could also rankle front line engineering and manufacturing staff, who previously have raised concerns about being overruled on safety issues by company executives and senior FAA officials.

Told of the company’s plans to move, Ed Pierson, a former senior manager at the Renton, Wash., 737 factory, said his “stomach dropped.”

He said it will be important for executives to keep in contact with their manufacturing operations in the Seattle area and South Carolina.

“My immediate reaction was Chicago was very far away and to think it was going further away was stunning,” said Pierson, who came forward to Congress as a whistleblower after the crashes.

Much of the FAA’s attention is focused on the 787 Dreamliner, which is manufactured in South Carolina. Quality problems with the planes have piled up and Boeing has halted deliveries of the planes to customers.

The company said when it released quarterly earnings last week that it has submitted paperwork to the FAA that would clear the way for deliveries to start again, but it remains unclear when regulators might give their approval.