By Maria Saporta and Douglas Sams
As published in the Atlanta Business Chronicle on August 7, 2015
State economic development officials have made their pitch to General Electric Co. (NYSE: GE) to relocate its Connecticut headquarters to Atlanta.
The meeting with General Electric took place the week of July 27 in Fairfield, Conn. and involved the company’s committee investigating its options to relocate, Atlanta Business Chronicle has learned from sources familiar with the discussions.
The meetings unfolded almost two months after GE protested Connecticut lawmakers passing a tax package that included significant (and retroactive) tax increases for businesses. It prompted CEO Jeffrey Immelt to tell employees he’d formed the exploratory committee. Its goal would be to seek other states with a more “pro-business environment.”
Georgia made a shortlist of up to 10 states that met with GE the last week of July, sources familiar with the presentations say. North Carolina, Florida, New York and Texas were also said to have made pitches to relocate the company.
Connecticut did not make a presentation during the latest round of meetings with the exploratory committee, and it’s becoming almost certain the company is going to relocate, people familiar with the discussions say.
The next step will be for the GE exploratory committee to further narrow the list of finalists, and Georgia leaders are hopeful that it will survive that cut and be one of the shortlist of finalists. At that point, it is expected that GE officials will begin touring the states that make it on that shortlist — possibly three to five.
Still, not everyone is certain the company is doing anything more than building leverage against Connecticut.
Georgia officials declined to talk about the recent pitch. Chris Carr, commissioner of the Georgia Department of Economic Development said, “One of the things I’ve done is not comment on any specifics of any project. Once you do, it’s a slippery slope.”
It doesn’t appear the company has begun touring office buildings or sites across metro Atlanta, and it’s likely such visits could be months away, local real estate executives said. CBRE Inc. is the company’s real estate broker, sources confirmed. CBRE could not comment.
Last week’s presentations before the exploratory committee may have also started to uncover what some observers have suspected since GE first made its intentions known: The potential relocation is about more than tax incentives.
GE leadership may see a move from Connecticut as the best opportunity to remake the company, to return to its industrial roots and embrace more cutting edge technology. It may consider turning away from appliances and put a greater emphasis on software development, industrial technology, or manufacturing, people familiar with the matter said.
“The national media has covered the angle that GE is looking for tax breaks but I suspect this has other reasons behind it,” said Mark Sweeney, a senior principal with the firm McCallum Sweeney Consulting.
The firm, based in Greenville, S.C., has worked on several corporate relocations to Atlanta including BMC, a building materials and construction services company, last year.
“We know Immelt has been front-and-center about the state of U.S. manufacturing. He is worried about U.S. competitiveness. This may be about looking for alternatives across the South, which is more manufacturing friendly.”
Georgia has a strong manufacturing resume, particularly among the automakers. This year it landed the corporate headquarters of Mercedes-Benz USA. It also has the Kia manufacturing plant near West Point, Ga., and Porsche’s North America headquarters next to Hartsfield-Jackson Atlanta International Airport.
The airport, as always, is another reason Georgia may be in the running.
Atlanta is a “very legitimate top contender” and one reason is the airport’s access to international markets, which is important to GE, Sweeney said.
Atlanta also has one of the nation’s top engineering schools in Georgia Tech and relative proximity to other highly rated schools across the region.
“The South is known for the outstanding talent graduating form its engineering schools,” Sweeney said.
If GE takes a more cutting-edge approach, it’s likely to consider cities with districts that have a buzz,such as Austin, Texas, or, in Atlanta, Technology Square, where NCR Corp. is building its new headquarters to be closer to the talented engineers graduating form Georgia Tech. NCR is building a stronger partnership with Tech. GE could see a similar opportunity, sources said.
Mark Arend, editor with Site Selection magazine, said Tech Square has evolved into an innovation hub, landing companies such as The Home Depot Inc., AT&T Mobility and GE Energy to launch research and development centers.