The maker of products ranging from jet engines to high-tech medical devices said on Wednesday it would be moving 800 headquarters staffers out of Fairfield, over two years beginning this summer, in a blow to the wealthy town. “If GE thinks its future is about keeping its portfolio of billion-dollar businesses steps ahead of the competition, growing new ones, and recruiting a next generation of digitally savvy leaders from some of the world’s top schools, that points to Boston”.
Advertisement
Earlier Wednesday, GE said it would cut up to 6,500 jobs in Europe over the next two years, including 765 in France and 1,300 in Switzerland, as it restructures and integrates its acquisition of the energy business Alstom’s.
GE said it will sell its offices in Fairfield.
Chesto later suggested that “the largest benefit to Boston, though, could be the bragging rights”.
“What we have indicated is a willingness to work with them on – if you want to call it a package, you can call it a package – in general, and in some cases, specific terms of what we thought we could do”, the governor said back on August 24.
“Where it’s less quantifiable is all the other areas – the volunteer hours from GE employees, the shopping they do in Fairfield, the dining out”, said Tetreau.
Boston was chosen after a careful evaluation of the ecosystem for business, talent, long-term costs, quality of life for employees, connections with the world and proximity to other important activities, the CEO added.
The move comes amid a broader effort by GE to cut corporate costs and streamline operations for what it portrays as a new industrial era that will revolve around software innovation as much as bended metal – one that will make it a priority to attract the talented workers who prefer to live and work in cities.
MA offered GE incentives of up to $120 million through grants and other programs, while the city of Boston offered up to $25 million in property tax relief, according to the mayor’s office.
GE has always been the largest company located in Fairfield County, home to some 945,000 people, which stands out as wealthy even in one of the more affluent U.S. states, according to U.S. Census data.
The Globe said the company informed Massachusetts Gov. Charlie Baker and Boston Mayor Martin J. Walsh today.
The Massachusetts Republican Party pointed to taxes and regulations in CT as a key driver behind GE’s move.
The relocation by GE, which is considered to the bellwether of the United States economy, is an indication of how, old-line companies in almost every industry had been forced to rethink their businesses for a digital age, which was an opportunity, but also a threat. A full move is expected to be completed by 2018.
GE did not estimate the extent of the job losses in CT as a result of the move. That didn’t deter General Electric, the industrial behemoth adept at minimizing its tax liabilities, from moving there. About 200 Fairfield staff will relocate and another 600 workers eventually will be housed at the new headquarters.
Licking his wounds, Connecticut Gov. Dannel Malloy released a statement that notes that GEs decision to leave the Nutmeg State should serve as a sign that the state should adapt to a changing business climate. “This action by GE further proves that Malloy, as the Chairman of the Democratic Governors Association, will be a major liability to Democrat gubernatorial candidates everywhere in 2016”, RGA Communications Director Jon Thompson said in Wednesday. Meanwhile, a race-to-the-bottom corporate bribery competition ensued among other states looking to lure GE with tax breaks. GE announced in June it was considering a move because CT lawmakers passed controversial business tax increases.
Advertisement
“The business environment here has declined so precipitously”, LeClair said.
