Everyone from the bodega owner to the retired schoolteacher is happy to blame “Connecticut” for the loss of GE headquarters. Who or what in Connecticut is a different matter.
Dare we pose the issue differently– we may lose some friends when we say the story is much more about that corporation, Connecticut culture, Connecticut politicians than it is about costs and taxes in Connecticut.
To be certain, top corporate leaders in Connecticut and elsewhere don’t like Connecticut’s business climate, and the cost to do business here. We know this because they say so and numerous surveys underscore it – the narrative is set.
Connecticut is an expensive place but that doesn’t really matter much to a corporate headquarters like GE had in Fairfield.
New York and Boston are far more expensive places to do business than even Fairfield County. Rents, employment costs, and taxes are all higher in most of the alternate places that GE looked for new headquarters.
So what then?
ATTITUDE: First and foremost, many in Connecticut demonize business in a way that Massachusetts and New York, for example, simply do not.
We invite Democratic politicians and members of the press to find in Massachusetts the shrill negative comments about any major company that are regular faire on the public air waves [especially NPR] or on the pages of the Hartford Courant from politicians, media, and the public alike.
Search back and you will find in Connecticut broadside attacks on Bayer, Pfizer, GE, United Technologies from leading legislators, even from those that represent districts where the employees live.
While the political Left [search Slate magazine] is calling for taxing Harvard [Yale and other non-profits], we’re not hearing the Massachusetts President of the Senate calling for it as Connecticut’s Martin Looney has done.
The attacks against Yale New Haven Health System come from both sides of the aisle and we don’t see a similar example at our neighbors in New York, Rhode Island or Massachusetts. Are their hospital CEOs working for the minimum wage?
CULTURE: We would love the added opportunity to simply blame Governor Dannell Malloy [he’s become the whipping boy] and the rest of the Democrats, but GE is moving because the “land of steady habits” is not providing the culture that large corporations are now seeking. Trendy trend or real movement, we’ll have to see.
McDonalds is moving from its suburban headquarters that it has occupied for 45 years to Downtown Chicago, Weyerhaeuser is moving from suburban Seattle to the city center, and that city’s $15 minimum wage is apparently no bar for the corporate headquarters.
As huge global corporations get larger and more bureaucratic, it’s becoming nearly impossible for them to be creative and innovative, so the consultants propose “surround yourself with young innovative people, attract your best talent to one spot,” yada, yada, yada.
By the time anyone knows whether this really works, there will be a new set of relocation plans to a Desert Island Oasis.
While no one is still talking about Red Sox Nation anymore, walking around Boston, the excitement of youth and creativity is everywhere, even a Yankees fan has to admit it is a city for the 21st-century.
Connecticut has a history of innovation, but the government slogan “Still Revolutionary” has not caught on and innovations here do come, but they are slow and hard won.
Then There Is GE: At 60, Jeff Immelt, CEO, still has to prove that his selection in 2000 wasn’t a mistake, he has only five years left to do it.
Immelt’s predecessor [neutron] Jack Welch was a mixture of old school and visionary thinker and he turned around not only GE, but in many ways the entire American Industrial Complex. But in 2000, at 65, he still had to go.
Welch made bets in media, finance and plastics and GE regained its bearing as one of the world’s most valuable and profitable companies.
Immelt, a Midwesterner who came east to Dartmouth College and then Harvard for his MBA – he has GE in his DNA, his dad managed what is now GE Aviation.
He beat out Rhode Island born Jim McNerney Jr [Yale ’71], also a GE insider, for the job. For the McNerney choice, age was a factor, but when he retired last year as CEO of Boeing it was a more successful company than ever.
The financial crisis tarred GE Capital – Welch’s star achievement. The Internet knocked the wind from NBC, so Immelt is returning GE to its industrial roots, and today innovation is the only way to win that game.
GE’s value has languished under Immelt and only recently returning to 60% of its 2000 level. Something had to change. BNH