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GE to Move Headquarters From Connecticut to Boston

Jan. 14, 2016, 3:53 AM

GE said it plans to move its corporate headquarters from Fairfield, Conn. to Boston by mid-2016, a move that confirmed the worst fears of Connecticut lawmakers.

The Jan. 13 announcement by the high-tech global industrial giant comes just seven months after GE Chairman and CEO Jeff Immelt raised concerns about the economic situation in Connecticut following the adoption of a series of significant tax changes and other budgetary actions by the state legislature last June.

Connecticut State Sen. Tony Hwang (R) told Bloomberg BNA on Wednesday that the decision by GE to leave the state was “an avoidable scenario” and should convince legislative leaders of the need to address the state’s economic situation. “I hope this is a teachable moment,” said Hwang who represents Fairfield and nearby communities.

“GE was not bluffing,” he said, and the company’s decision is “reflective of not simply GE, but a number of other companies, hospitals and individuals in this state.”

Sen. L. Scott Frantz (R), the ranking minority member on the finance committee, told Bloomberg BNA in an interview that following tax hikes in 2011 and in 2015, the state’s economy has “a huge hole,” and he is afraid that the state’s Democratic leaders have started a trend of larger companies leaving the state.

Malloy Says Move Disappointing

Connecticut Gov. Dannel P. Malloy said in a statement that the decision by GE was disappointing and presents “a clear signal that Connecticut must adapt to a changing business climate. In addition to focusing on investments in infrastructure and and higher-education to provide the talent necessary to meet the needs of high-tech employers, Malloy said the state will make an effort to focus on the needs of high-tech start-ups, small businesses and major employers in the state such as United Technologies.

And, Malloy said, “businesses care about how states budget, and now is the time to continue our bipartisan efforts to reform our budget, find new ways to pay our pensions, and create a more sustainable and predictable state budget.”

The state legislature is scheduled to convene on Feb. 3.

Incentives To Make Move

In making the announcement, GE Chairman and CEO Jeff Immelt said the high-tech global industrial giant had received a package of incentives from Massachusetts and the City of Boston which will help offset the cost of the move. He made no mention of recent tax and economic developments in Connecticut which he had cited earlier in 2015 when he made public the company’s plans to consider relocating the company’s headquarters.

He said the company plans to sell its offices in Fairfield and at 30 Rockefeller Center in New York City to further offset the cost of the move.

The new headquarters for the company, which is currently ranked number 8 on the Fortune 500, will be located in the Seaport District of Boston, also known as the Innovation District. Immelt said the company will have roughly 800 people in Boston including 200 corporate staff and 600 digital industrial product managers, designers and developers.

Massachusetts Gov. Charlie Baker said Jan. 12 the state offered incentives of up to $120 million to encourage GE through grants and other programs. In addition the city of Boston offered up to $25 million in property tax relief.

GE was also offered $1 million in grants for workforce training, up to $5 million for an innovation center to forge connections between GE, innovators from Massachusetts research institutions and the higher education community, commitments to existing transportation improvements in the rapidly developing Seaport district, appointment of a joint relocation team to ease the transition for employees moving to Boston and assistance for eligible employees looking to buy homes in Boston.

“Our administration welcomes GE’s decision to take advantage of the unique resources that our state has to offer,” Baker said in a statement Jan. 13

In making its decision, Immelt said Boston was selected based on the evaluation of business ecosystem, talent, long-term costs, qualify of life for employees, connections with the world and proximity to other important company assets.

The content of GE’s headquarters will also change, the company said, with more emphasis on innovation. In Boston, GE will have roughly 800 people; 200 from corporate staff and 600 digital industrial product managers, designers and developers split between GE Digital, its energy services start-up Current, robotics and life sciences. A GE Digital Foundry will be created for co-creation, incubation and product development with customers, startups and partners. The remainder of administration will be placed in shared service operations throughout the company.

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