For pilots, a “touch-and-go” is a practice landing where the plane briefly touches down then goes right back up again into the sky.
For Chicago, it’s a description of Boeing’s $60+ million, two-decade stopover in the city. Boeing’s announcement that it was moving its headquarters and up to 500 jobs to Chicago was the “Deal of the Month” in June 2001. And in May 2022 it was over, with the announcement that the aerospace giant was moving its headquarters again, this time to Arlington, Virginia.
Throughout Boeing’s tenure in Chicago, the company’s compliance with the public “500 jobs” commitment was questionable (and regularly questioned by outside observers.) State and city officials reportedly never audited the company’s self-reported jobs figures, and even then the hiring still fell short of 500 in at least four years of the 20-year deal. Local watchdogs also questioned whether Boeing was counting jobs located in nearby Gary, Indiana or lower-wage jobs at Boeing subsidiaries.
On a larger scale, Illinois’ and Chicago’s subsidies ended up being part of a European Union complaint to the World Trade Organization, where the EU argued that the combined local, state and federal subsidies received by Boeing were so big as to violate international treaties. Even though Washington State repealed its main subsidies for Boeing to try to avoid EU reprisals, a WTO arbitrator ruled that while the federal contracts were allowed, the state subsidies were pure corporate welfare and that the EU was entitled to impose $4 billion in tariffs on U.S. products in return.
Boeing’s Chicago layover illustrates one common fallacy in economic development subsidy deals: The idea that the subsidies will pay off in the long run because once they’re over, the company will start paying their full tax burden. In reality, that’s the point at which it’s extremely common for companies to either renegotiate new subsidies, or take off for someplace else.