HARTFORD, CT — A day after the bombshell announcement that Aetna is looking to relocate from its Hartford headquarters, state legislators and business experts said the news should serve as a call to action.
“Our inactivity, our unwillingness to come up with an overall goal for urban centers, is costing us dearly,” House Speaker Joe Aresimowicz, D-Berlin, said Thursday morning.
“The business community wants to know what our plan is,” Aresimowicz said, stating that other states across the country have been more aggressive in attracting business to their large cities.
Aresimowicz pointed to the Raleigh-Durham area of North Carolina, which he said has created bike paths and canoe carts, among other frills, to attract the type of millennial workers that big businesses such as Aetna crave.
Aetna has had a footprint in the city of Hartford for 164 years.
On Wednesday, an Aetna spokesman said the company is in “negotiations with several states regarding a headquarters relocation with the goal of broadening our access to innovation and the talent that will fill knowledge economy-type positions.”
Aetna’s announcement comes more than a year after General Electric moved its headquarters from Fairfield to Boston.
GE’s decision was based largely on the pool of young talent from universities and colleges in the Boston area, and the desire of millennials to live in metropolitan areas where they don’t have to own a car to get to work.
Boston and the state of Massachusetts also offered a generous $164 million incentive package.
Aetna’s announcement shouldn’t have come as a surprise, according to Don Klepper-Smith, chief economist and director of research for DataCore Partners.
Aetna has become “frustrated with the fiscal problems and leadership of our state,” Klepper-Smith said Thursday.
“It’s been the worst kept secret in Connecticut. Back in 2016, the Wall Street Journal stated that the best thing that GE could do for Connecticut would be to leave the state, and now we have two marquis employers in Connecticut that have apparently taken that message to heart.”
Klepper-Smith added: “We don’t know exactly how many jobs will be leaving Connecticut at this point, but we do know that Aetna has about 6,000 employees in the state, and that many of the jobs leaving will be high-paying executive positions with strong multipliers, and so State income tax revenues are apt to be affected, just as they were with the departure of GE.”
“Therefore, just as with GE, the loss of Aetna jobs will potentially have significant ripple effects in both the local and state economies, with Hartford in the target zone at a time when Hartford’s finances are in disarray and the possibility of bankruptcy looms large,” Klepper-Smith said.
Aresimowicz said he understands some will blame Democratic Gov. Dannel P. Malloy and the Democratic legislature when and if Aetna moves its headquarters.
“We have to accept some of the responsibility,” Aresimowicz said, but he quickly added that the loss of business in Connecticut to other states “wasn’t created in seven years and won’t be solved in seven years.”
On Thursday, Malloy reiterated his belief that “where the company wants to have its offices it’s going to have its offices.”
There’s disagreement about what factors play into any relocation decisions of large corporations, but Greg LeRoy of Good Jobs First, has said the headquarters of a company are usually where the CEO wants to live.
According to LeRoy’s 2005 book, The Great American Jobs Scam, there are often personal factors that figure into the location of corporate headquarters.
“Executives especially like to create a short commute for themselves. They also locate for amenities such as golf courses, or good schools for their children,” LeRoy writes. “For example, a study of 38 companies that left New York City found that 31 moved closer to their chief executive’s home, reducing the average CEO commute to eight miles.”
In 2011, David Cordani, the CEO of CIGNA, announced his company would be the first to take advantage of Connecticut’s First Five tax incentive program moving its headquarter designation from Philadelphia to Bloomfield.
Cordani lives in Simsbury, which is the next town over.
Aresimowicz and Majority Leader Matt Ritter, D-Hartford, tried to put a silver lining on Aetna’s announcement, stating that even if the headquarters is moved the company will still have a major presence in Hartford — and Connecticut.
“They are not going to take the gold dome off the top of the building, rip the sign down, and move out of town,” Aresimowicz said. “They’ll still have a large presence.”
Ritter added that big companies — and their CEOs — can move headquarters “a lot of places” and that losing “a couple of hundred people stings,” but he said more important than a headquarter location is the bond a company has with the city and state it is in.
Ritter said he’d like to see Aetna formed the kind of relationship with Hartford and the state of Connecticut that he said Travelers Insurance has.
“They’re (Travelers) growing,” Ritter said, stating the reason they are is that the company has created a strong partnership with the city of Hartford and the University of Connecticut.
He said back in the early 1990s Travelers was “going to leave” Hartford and the company has “become a corporate giant.”