GE moving HQ to Boston

GENERAL ELECTRIC Co. will relocate its global headquarters to Boston. / COURTESY FORBES.COM
GENERAL ELECTRIC Co. will relocate its global headquarters to Boston. / COURTESY FORBES.COM

(Updated 11:09 a.m., 1:48 p.m. and 2:18 p.m.)
BOSTON – General Electric Co. announced Wednesday that it will move its corporate headquarters to Boston from Fairfield, Conn.

“GE aspires to be the most competitive company in the world,” GE Chairman and CEO Jeff Immelt said in a 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.”

GE, according to a news release, began a formal review of its headquarters in June, with a list of 40 potential locations. Boston was selected after an evaluation of the business ecosystem, talent, long-term costs, quality of life for employees, connections with the world and proximity to other important company assets, the release said.

Providence was one of the cities that had been mentioned as a potential new site, in addition to Boston and New York City.

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GE said there is no “material financial impact” to the company related to the cost of the move, and said Massachusetts and the city of Boston are providing a package of incentives providing benefits to the state and city, while also helping offset the costs of the relocation.

According to The Boston Globe, the city may offer as much as $20 million in property tax relief over 20 years, citing people involved in the process. The state package also could be valued as high as $120 million and include benefits such as help with real estate acquisition costs, infrastructure improvements and tax incentives, the article stated.

GE said it will sell its Fairfield headquarters and office at 30 Rockefeller Plaza in New York City to offset the cost of the move.
The company said it will have approximately 800 people in Boston, 200 from corporate staff and 600 digital industrial product managers, designers and developers. It employs approximately 800 currently at its headquarters.

A GE Digital Foundry will be created for co-creation, incubation and product development with customers, startups and partners, the release said.

It noted that the company already has a “significant existing presence in Massachusetts, with nearly 5,000 employees across the state in businesses including aviation, oil and gas, and energy management.” Two years ago, GE also moved its life sciences headquarters to Marlborough, and last year, GE announced its energy services start-up, Current, would be headquartered in Boston.

The new corporate headquarters will be in Boston’s Seaport District. Employees will move to a temporary location in Boston starting in the summer, with a full move completed by 2018.

Immelt began looking for a new location last June after a decision by Conn. Gov. Dannel Malloy to change corporate tax policies. While Malloy and the legislature approved a budget bill during a special session that removed some of the changes that worried companies, GE continued its search for a new location.
“Boston’s recognized as a technology leader,” Scott Frantz, a Republican state senator from Greenwich, in Fairfield County, Conn., told The Boston Globe. “They want to become much more of an IT company.”
In other news, Bloomberg reported that GE plans to eliminate 6,500 jobs in Europe in a global restructuring effort as the industrial giant seeks $3 billion in cost savings from its purchase of Alstom SA’s energy business.

The cuts, including 1,700 positions in Germany and 765 in France, are part of a broader push to trim overlapping expenses following one of GE’s largest-ever acquisitions, which closed in November. The company expects to generate $1.1 billion in savings this year and almost three times that amount by the end of the decade.

“This is a necessary step to increase the competitiveness of the former Alstom businesses and generate the synergies we have targeted,” Deirdre Latour, a GE spokeswoman, said by e-mail. “We will work constructively with employee representatives throughout the process.”

GE is seeking to maximize returns from the $10.3 billion acquisition as Immelt broadens the company’s reach in the energy markets. He is expanding divisions that make generators and oilfield equipment while selling off consumer-focused and finance operations. The Alstom deal tightened GE’s grip on the lucrative business of servicing and maintaining gas turbines, while adding joint ventures in renewable energy and electrical transmission businesses.

GE rose 0.7 percent to $28.85 at 10:12 a.m. in New York. The shares rose 23 percent last year compared with a 0.7 percent decline in the Standard & Poor’s 500 Index.

The job cuts represent about 14 percent of the 48,000 people that the company’s power division employs in Europe after the Alstom acquisition, a spokesman said. GE promised to create 1,000 jobs net new jobs in France to win government support for the deal.

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