“This hurts”, Connecticut Gov. Dannel Malloy said at a news conference called to respond to the GE announcement.
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GE ensures that the cost of the move will not have a significant financial impact on the company. “The governor and her team, along with Rhode Island’s delegation in Washington, led an outstanding process”.
On Wednesday, General Electric, one of the world’s largest and wealthiest companies, announced that it is moving its headquarters from Fairfield to Boston.
On the company’s website there is a statement by Immelt which shows the change of the company: “We are transforming GE into the world’s premier digital industrial company…using our scale and diversity to drive outcomes for customers”.
The 124-year-old company is undergoing a major restructuring to emphasise digital and industrial capabilities.
The Boston region, Immelt said, is “an ecosystem that shares our aspirations”. “Greater Boston is home to 55 colleges and universities”.
This post has been updated.
The company has not yet decided on a site for its new headquarters, but will likely choose an area along the South Boston Waterfront. The new headquarters will be located in Boston’s Seaport District with a temporary headquarters opening this year and a full move completed by 2018.
Malloy, meanwhile, acknowledged at a 2 p.m. Capitol press conference that “of course we are disappointed”.
GE’s move of its headquarters to Boston is a vote of confidence in the innovation scene here. Persuading the company to move to Boston involved city and state tax incentives and grants of $145 million at a time when CT is considering raising taxes on businesses.
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.
The company employs about 5,000 people in CT, including 800 at the Fairfield location.
Also helping make the move pencil out is incentives of up to $120 million through grants and other programs offered by MA, and property tax relief valued at up to $25 million offered by the city of Boston. 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, Current, robotics and Life Sciences.
GE first said it was considering moving last June after CT proposed raising business taxes, but GE has finally chose to leave its Fairfield headquarters after over 30 years. “Unfortunately most small businesses in our state do not have the resources that General Electric does and their only alternative is to close up their shops permanently”, NFIB Connecticut state director Andrew Markowski said in a statement on Wednesday.
Some have interpreted the move as part of GE’s attempt to remake its image and its business to suit the digital era.
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His reasoning: “If GE thinks its future is about deal-making, glossy marketing campaigns, and trying to squeeze costs out of industry sectors undergoing commoditization, NY is the place”. In other words, GE execs were clear that they wouldn’t stand for a tax hike, and CT just didn’t take them seriously. GE said it was also attracted by the area’s thriving venture capital and startup community, and pro-business state and local government.
