Why is GE moving to Boston? (+video)
General Electric announced Wednesday it will move its headquarters from Fairfield, Conn., to Boston after Massachusetts legislators promised funds and talent.
General Electric will relocate its headquarters from Fairfield, Conn., to Boston as early as this summer, GE Chairman and CEO Jeff Immelt announced Wednesday.
GE first said it was considering moving last June after Connecticut proposed raising business taxes, but GE has finally decided to leave its Fairfield headquarters after over 30 years. "We want to be at the center of an ecosystem that shares our aspirations,” Mr. Immelt wrote in a press release.
The company will move its headquarters and 800 employees to Boston to pursue its “future as the world’s leading digital industrial company,” Jennifer Erickson, senior director of external communications at GE, told The Christian Science Monitor in an email Thursday.
Both Massachusetts Governor Charlie Baker and Connecticut Governor Dan Malloy released statements regarding GE’s move Wednesday, but the governors’ tones were drastically different.
“Taken as a whole, there is no denying that Connecticut has had more good days than days like today,” said Gov. Malloy. “Of course we are disappointed, and we know that many in Connecticut share that frustration.” The company has not yet announced how many jobs will be lost in Connecticut as a result of the move.
Whereas Gov. Baker had every reason to be positive in his own press release.
“In addition to adding hundreds of high-paying jobs to our state, we look forward to partnering with GE to achieve further growth across a spectrum of industries and are confident GE will flourish in the Commonwealth’s inventive economy,” he says. Besides bringing about 800 jobs to the state, GE will serve as a Boston-draw for other technology companies.
Playing off the historic Boston vs. New York rivalry, the city of Boston can’t help but brag a little.
“The ecosystem that we have here in Massachusetts to support innovation is what won us this prize,” Gov. Baker’s secretary of economic development Jay Ash told the Boston Globe.
And Erickson told The Monitor that Boston has the statistics to back up the talk.
“Like GE, Boston is focused on innovation,” she wrote. “Nearly 40 percent of the MA workforce is employed in the innovation economy – more than any other state. The city’s share of employment in scientific [research and development] is 2.5 times the national average.”
And “It’s more than hometown pride,” Jim Rooney, chief executive of the Greater Boston Chamber of Commerce, told The Boston Globe. “Boston is increasingly expanding its global influence, and the talent is already here. GE will be able to recruit an innovation workforce that already has a T pass.”
But regardless of the technological talent and innovative spirit that Boston has to offer, it’s hard to look past the financial incentives as simply one of many contributing factors.
The Commonwealth of Boston offered $120 million worth of incentives to the company and up to $25 million in tax savings – making the overall $45-million deal one of the most expensive in the state’s history.
Between costs offset by the state of Massachusetts, the city of Boston, and revenue from the sale of the Fairfield corporate compound and offices in New York City at 30 Rockefeller Plaza, GE has confirmed that it will take on no financial impact from the northern move.
Boston also pledged transportation improvements in the Seaport area where GE plans to relocate, as well as a $5-million innovation center where GE employees and Massachusetts innovators, students, and teachers can collaborate on future projects.