Announcement follows firm’s threat to leave Connecticut, complaining about the state's tax environment.
HARTFORD, Conn. — General Electric announced it will move its headquarters to Boston, leaving the sprawling suburban Connecticut campus in Hartford it has called home over the past 40 years for a technology-rich city it says better fits its ambitions as an innovation leader.
Chairman and CEO Jeff Immelt said GE, one of the best known companies in corporate America, wanted to be “at the centre of an ecosystem that shares our aspirations.”
The announcement comes three years after the $130 billion high-tech global industrial company said it began considering a new composition and location for its headquarters, and more than seven months after the firm threatened to leave Connecticut, complaining about the state’s tax environment.
The move was mourned in Connecticut, but Massachusetts officials rejoiced.
“We won Powerball today here in Boston by having GE come here,” Boston Mayor Marty Walsh said. “For two decades, we’ve had companies move out of our city. Now we have companies moving into our city.”
Several states had been competing to lure the company from Fairfield. GE announced in June it was thinking about a move since Connecticut lawmakers passed some controversial business tax increases. The General Assembly later scaled back some of the increases after other companies, including Aetna Inc. and the Travelers Companies Inc., voiced concerns.
Democratic Gov. Dannel P. Malloy also met with GE executives and offered an incentive package.
“Of course we are disappointed, and we know that many in Connecticut share that frustration,” Malloy said in a joint statement with Lt. Gov. Nancy Wyman. “While GE’s headquarters may be leaving, I have been assured that the company will continue to have many employees working here in Connecticut. Equally important, GE will continue to work with and support many smaller businesses throughout our state.”
The company employs about 5,000 people in Connecticut, including 800 at the Fairfield location. It’s unclear how many will remain in the state.
Seth Martin, a GE spokesman, said the Boston location will become home to 200 corporate employees and 600 digital industrial product managers, designers and developers. He said an unspecified number of corporate employees will stay in Connecticut and be moved to GE’s offices in Norwalk.
GE plans to initially move headquarters employees to a temporary location in Boston, starting in the summer of 2016. The full move is expected to be completed in several steps by 2018.
A cheer went up in the Massachusetts House of Representatives Wednesday afternoon when Speaker Robert DeLeo announced GE’s decision. DeLeo earlier told reporters he was unaware of any legislation that would be required to facilitate the move.
Massachusetts offered GE incentives 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. Additional incentives include $1 million in workforce training grants; up to $5 million for an “innovation centre” to help forge relationships between GE and Massachusetts research institutions and schools; and assistance to eligible employees looking to purchase homes in Boston.
Connecticut Senate Majority Leader Martin Looney, D-New Haven, said GE is shifting its business model away from heavy industry and financial services to technology. He said the relocation has “nothing to do with taxes or even business costs and shouldn’t be seen as a referendum on Connecticut’s economy.”
Others in Connecticut disagreed, worried the announced move will further hurt the state’s reputation despite efforts to attract out-of-state companies and change the tax structure.
“We’ve got to make the environment here more attractive. I know that that doesn’t sound real sexy, but that’s the reality,” said Joe Brennan, CEO of the Connecticut Business and Industry Association.
GE said its new headquarters will be in the Seaport District of Boston. To offset the cost of the move the company said it will sell its offices in Fairfield and at Rockefeller Plaza in New York City.