NPR logo
GE's Big City Move Part Of Larger Tech Trend
  • Download
  • <iframe src="https://www.npr.org/player/embed/463290779/463290780" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
GE's Big City Move Part Of Larger Tech Trend

Business

GE's Big City Move Part Of Larger Tech Trend

GE's Big City Move Part Of Larger Tech Trend
  • Download
  • <iframe src="https://www.npr.org/player/embed/463290779/463290780" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

This week, GE announced it will move from a 42-year-old suburban campus in Fairfied, Conn., to Boston. Experts say corporations make this sort of move to get access to universities and tech workers.

SCOTT SIMON, HOST:

In your home, you might have a GE appliance, maybe a stove or a washer. Well, on Friday, General Electric announced the sale of its appliance business to the Chinese manufacturer Haier Group. That's part of GE's recent shift to selling services and sophisticated goods like jet engines and power turbines instead of household goods. And that transition was reflected in GE's decision this week to move from suburban Connecticut to Boston. From member station WBUR in Boston, Curt Nickisch explains.

CURT NICKISCH, BYLINE: To understand why General Electric would abandon its sprawling Fairfield, Conn., campus listen in on a conversation involving a small firm. Like GE, this 30-person startup wants office space on Boston's waterfront.

GREG HOFFMEISTER: ...Showers on four.

UNIDENTIFIED MAN: No.

HOFFMEISTER: Anything in the building as far as...

NICKISCH: When it gets down to the nitty-gritty details, they're discussing showers. Greg Hoffmeister is one of the real estate brokers.

HOFFMEISTER: Because a lot of people are biking to work and, you know, they want to have that or go running at lunch, so having a shower is pretty important.

NICKISCH: Today's knowledge workers want bike racks and subway stops, not country clubs and parking garages.

(SOUNDBITE OF PINGPONG BALL BOUNCING)

NICKISCH: At the Boston startup EverTrue, a couple dozen employees have gathered for sales training and pingpong. Not one is over 30 except for Chief Operating Officer Elisabeth Bentel Carpenter. She says her young colleagues don't want to spend their time commuting like she did when she was their age.

ELISABETH BENTEL CARPENTER: They'll leave at reasonable hours that they can go do things that are important to them, whether it's having dinner with friends, going to the gym, what have you. They tend to get back online later on at night because we have a lot or work to do as well. They're just really, really ambitious, young go-getters.

NICKISCH: It's these young go-getters who General Electric wants to have in its neighborhood and working for the company. In its announcement, CEO Jeff Immelt cited Massachusetts's record spending on research and development.

Marty Walsh is Boston's mayor.

MARTY WALSH: GE recognizes the innovation in our city, the educational institutions in our city, the diversity of our city, the people in our city. We're excited about this.

NICKISCH: Another key to luring GE was the 15-minute drive from the waterfront to Logan International Airport. Boston's economic development chief, John Barros, says that's critical for a company with 300,000 workers in nearly 200 countries.

JOHN BARROS: We added in the proposal everything from access to the airport and different things like hangars for GE. For a corporation like GE, you have to discuss things like helipads.

NICKISCH: Those selling points turned out to be more important than tax breaks. The city and state incentive package totals $140 million, about one tenth of 1 percent of GE's annual sales.

Labor market economist Enrico Moretti at UC Berkeley says GE's move is reversing an old trend. Companies left troubled cities in the '70s and '80s for manicured suburban office parks. Now they're moving back into revitalized urban centers.

ENRICO MORETTI: We see similar dynamics at play in Silicon Valley. But we see the same trends in other cities from Seattle to Austin to Raleigh-Durham.

NICKISCH: If corporate managers haven't noticed yet, they will now. General Electric has been able to stay an industrial giant for more than a century by changing with the times.

For NPR News, I'm Curt Nickisch in Boston.

Copyright © 2016 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

GE Brings Things To Life In Boston; Lights Out In Connecticut

General Electric will move from Connecticut to Boston for tax breaks and other advantages. i

General Electric will move from Connecticut to Boston for tax breaks and other advantages. Gene J. Puskar/AP hide caption

toggle caption Gene J. Puskar/AP
General Electric will move from Connecticut to Boston for tax breaks and other advantages.

General Electric will move from Connecticut to Boston for tax breaks and other advantages.

Gene J. Puskar/AP

Fair to say this was a brilliant day for Boston.

General Electric Co. announced on Wednesday that it will be moving its headquarters from Fairfield, Conn., to Boston, starting this summer.

That decision makes Boston the winner of an intense competition among dozens of cities — all hoping to become the hometown of one of the world's largest companies.

GE has been based on a 68-acre suburban campus in Fairfield since 1974. Its new home will be built in Boston's Seaport District, with the full move to be completed by 2018.

The $130 billion global industrial giant said it has been weighing a headquarters move for more than three years. That search may have become more urgent after a 2015 state budget raised taxes on corporations.

GE settled on Boston after being offered a massive package of tax breaks and incentives. The deal included $120 million from the state through grants and other programs, and up to $25 million in property tax relief from the city, according to a joint statement from Gov. Charlie Baker and Mayor Marty Walsh's offices.

In exchange for incentives, the city will get an infusion of about 200 corporate staffers and 600 digital industrial product managers, designers and developers.

Although the tax breaks are generous, they were not the key reasons for GE's choice of Boston.

GE Chairman and CEO Jeff Immelt said the company was looking for "an ecosystem that shares our aspirations. Greater Boston is home to 55 colleges and universities. Massachusetts spends more on research & development than any other region in the world, and Boston attracts a diverse, technologically fluent workforce."

GE also said Boston offered "connections with the world." That can be read as: Logan International Airport. Unlike Fairfield, Boston offers nonstop flights to London, Frankfurt, Paris, Zurich, Hong Kong, Dubai, Tokyo, Santiago and many other global destinations.

New York officials had hoped to attract GE, but the company said it not only is pulling out of Connecticut but will be selling its offices at 30 Rockefeller Plaza in Manhattan. Connecticut officials had hoped to avoid losing the headquarters of a major employer. But increasingly, suburban office parks are losing out to urban environments that are more attractive to young, well-educated workers.

Boston's advantages showed up in another way on Wednesday. The Federal Reserve gave it a pat on the back in its Beige Book, an eight-times-a-year report on growth.

The Beige Book described Boston's economic activity as "upbeat."

Fed researchers concluded that while the New York and Kansas City regions were essentially flat, other parts of the country were reporting growth and Boston was particularly healthy. For example, the report said "office leasing demand remains robust in Boston [but] weak in Hartford."

Ouch. Tough day for Connecticut.

"This hurts," Connecticut Gov. Dannel Malloy said at a news conference called to respond to the GE announcement. "You win some and you lose some. Luckily we've won more than we've lost."

Malloy said the state plans to work harder to upgrade transportation infrastructure and the higher education system.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.