(Updated 2:50 p.m.) General Electric, which has been headquartered in Fairfield for decades, announced today that it’s moving its headquarters to Boston.
GE had been looking to relocate since this past summer. It has about 800 employees at its Fairfield headquarters.
GE officials released a statement this afternoon, saying that they will be moving to the Seaport District of Boston. The company did not provide a specific address but the Boston Globe reported that GE had narrowed it to two spots on the South Boston waterfront.
The statement also said GE will sell its offices in Fairfield and at 30 Rockefeller Plaza in New York City to further offset the cost of the move.
“GE aspires to be the most competitive company in the world,” GE Chairman and CEO Jeff Immelt said in the statement. “Today, GE is a $130 billion high-tech global industrial company, one that is leading the digital transformation of industry. We want to be at the center of an ecosystem that shares our aspirations. Greater Boston is home to 55 colleges and universities. Massachusetts spends more on research and development than any other region in the world, and Boston attracts a diverse, technologically-fluent workforce focused on solving challenges for the world. We are excited to bring our headquarters to this dynamic and creative city.”
Earlier this week Gov. Dannel P. Malloy downplayed concerns about what it would mean if GE decided to leave the state it’s called home for the past four decades.
“I think they’ve said they’re going to leave thousands of jobs in Connecticut one way or the other, which means they’re primarily talking about [their] headquarters operation which will be relatively small,” Malloy said Monday.
Wednesday afternoon at Pegasus manufacturing in Middletown, Malloy said, “You win some and you lose some. Luckily we’ve won more than we’ve lost, but this hurts.”
The president and CEO of Connecticut’s largest business lobby said last week that it would be a “big deal” if GE decided to leave.
“GE is going to thrive. They are going to thrive in Connecticut or somewhere else,” Connecticut Business and Industry Association President and CEO Joseph Brennan said last week.
Sen. Tony Hwang, R-Fairfield, who represents the town GE will be vacating, said their departure is like “a punch to the stomach for the entire state of Connecticut.”
He said the legislature had enough time to address the company’s concerns about its business environment, but it missed several opportunities. He said the legislature could have rejected the tax package in June, but it didn’t. It could have held a special session in August after realizing its mistake, but it didn’t.
“We did not respond until December,” Hwang said. “Then we we didn’t make the long-term structural changes that were necessary.”
The Republican Governors Association was quick to blame Malloy and Connecticut’s tax policies for the decision.
“General Electric’s decision to move their headquarters and jobs from Connecticut to Massachusetts is a direct result of Democrat Gov. Dan Malloy’s failed leadership and eagerness to drive business out of his state through job-killing policies,” RGA Communications Director Jon Thompson said. “GE made it clear to Malloy that if he pushed his $1.2 billion tax hike on business, they would leave. Now, they are making good on that promise.”
JR Romano, chairman of the Connecticut Republican Party, said that fact that GE decided to move to a state “nicknamed Taxachusetts” means “Connecticut has officially lost its mind.”
He said the Democratic Party is “driving business and people of the state,” and it’s only going to get worse if it doesn’t “get its fiscal house in order.”
While the decision to change how multi-state companies are taxed inspired GE CEO Jeffrey Immelt to send a letter to his employees to express his frustration with Connecticut’s business climate, they may not have played that big a role in the relocation decision.
“A numbers of factors go into a major decision to move a corporate headquarters, including tax issues, acquisition and retention of talent, and the costs associated with such a move,” David Cadden, a professor at Quinnipiac University’s Business School, said.
New reports said the decision came down to New York and Boston.
Cadden said he believes they would have received tax breaks to move to Manhattan or Westchester, which would have meant that none of the top executives would have to sell their homes in Connecticut. However, they would have been subject to double personal taxation.
The decision to move to Boston means that Immelt is “emphasizing manufacturing and advanced technology for the future growth of GE,” Cadden said.
“Bloomberg recently ranked Massachusetts the number one state for innovation. It currently hosts many high-tech firms, including a subsidiary of Google. On top of that, Boston hosts educational institutions such as MIT, Harvard, Boston College and Boston University,” Cadden added. “One only had to look to the city of Boston to see how the ability to recruit top-flight talent from local universities can affect the overall economic growth of a location.”
Hwang said Connecticut, which was ranked 5th in the country for innovation, could have competed with business ecosystem the company was looking for in Boston, but it lacks vision.
He said he expects the company to formally announce its decision Thursday.