With Georgia out of the running, Malloy optimistic GE’s HQ will stay in Fairfield
Gov. Dannel P. Malloy remains hopeful that Connecticut may yet hang onto the Fairfield corporate headquarters of General Electric, even as “mistakes were made” on all sides during negotiations with the conglomerate, he told an audience of business people and students at Fairfield University on Monday night.
Earlier that day, the Atlanta Journal Constitution reported that Georgia is no longer a candidate to lure GE after being considered a frontrunner, and the newspaper also said New York and Connecticut are the two most-likely locations for GE’s main office.
Malloy spoke Monday at the annual economic summit organized by the Connecticut chapters of the Association for Corporate Growth and the Turnaround Management Association, held at the Charles F. Dolan School of Business at Fairfield University.
“I’m hopeful,” Malloy said. “I think that people presume that they are going to save a lot of money moving somewhere and that’s not necessarily the case. And when you factor in the cost of the workforce that you have — ... they’ve spent a lot of money building that workforce. So I hope that we’re back in and that we can keep them.”
GE CEO Jeff Immelt told members of the Business Council of Fairfield County last week that GE is looking “not just here but other places for where the eventual headquarters of the company will be.” He gave no indication of Connecticut’s rank in GE’s pecking order and asserted the company is not seeking “special deals” from any state government.
There are multiple examples in Stamford of corporations moving hundreds of headquarters personnel into or out of the orbit of New York City, most recently in the case of Charter Communications, which moved its headquarters to Stamford in 2012 from St. Louis, with 560 people here at last report, and before than, MeadWestvaco and International Paper, which decamped for Virginia and Tennessee, respectively.
Given the same opportunity as GE to find a new corporate home, Synchrony Financial chose to take an incentive package from Connecticut to maintain its headquarters in Stamford after its spinoff from GE, completed this month. Malloy noted other companies have chosen Connecticut for major offices during his tenure including Navigators Group and the NBC Sports Group division of Comcast, which both moved here from New York. Several of those deals occurred prior to the recent passage of corporate tax hikes, which prompted GE and other large state employers including Aetna to threaten to pull up stakes in Connecticut.
“If they leave — and I hope they don’t leave — they’re talking about taking some (percentage) ... of their jobs,” Malloy said. “But let’s not forget that during the last four years … we have moved a lot of companies to Connecticut.”
For all the obvious reasons — most significantly uprooting spouses from their own jobs and kids from their schools — it is not a decision that is taken lightly. Speaking on a panel at the ACG and TMA forum in advance of Malloy’s talk, an executive at Plainville-based Carling Technologies said the electric-switch maker had laid groundwork to move out of Connecticut, but paused after getting feedback from workers on the inevitable disruption to their lives, which gave the Department of Economic and Community Development time come up with a financial incentive package to keep them here.
“Back in 2008, Carling had announced we were going to be leaving Connecticut … to our employees,” said Paul Soucy, chief financial officer of Carling Technologies. “Trying to move a company anywhere is very difficult. You’ve got dual income people — you’ve got a spouse that’s working. When we announced it, it was: ‘Well, what about my wife? What about my kids in school?’ There’s a lot of reasons that make it challenging to leave the state.”
For his part, Malloy suggested the GE threats would never have surfaced had the state’s General Assembly left intact his original budget proposed early this year that he said would have stripped $600 million in costs, reducing the need to raise taxes to cover that amount as the state struggles with a shortfall estimated at between $200 million and $250 million.
“I think mistakes were made by a whole lot of people on an ongoing basis — I think the corporate community can apply its pressure more effectively on the legislature,” Malloy said. “Hopefully, everyone’s learned something.”