By Maria Saporta
Published in the Atlanta Business Chronicle on June 12, 2015
Georgia’s business and political leaders are ready to roll out the welcome mat to General Electric Co. if it is truly serious about relocating its corporate headquarters out of Connecticut.
In a highly unusual move, GE’s CEO Jeff Immelt wrote in an email to employees that he had assembled an exploratory team “to look into the company’s options to relocate corporate HQ to another state with a more pro-business environment.”
“We have formed an exploratory team to look into the company’s options to relocate corporate HQ,” GE spokesman Dominic McMullan wrote in an email. “It is too soon to comment further on the process.”
Georgia leaders were among the first to reach out to GE executives. Gov. Nathan Deal was among the first of a dozen governors to reach out to Immelt to let him know that GE, ranked 8th in the Fortune 500 list, would find a business-friendly environment in Georgia.
A host of Georgia economic development, political and business leaders with close ties to GE were contacted for this story–most speaking on background. All agreed that Georgia should do all it can to lure GE to the state–even if it’s a long shot.
“We all read the announcement where Connecticut increased taxes on businesses up there that created the reaction out of GE,” said Paul Bowers, president and CEO of Georgia Power Co. who is the 2015 chairman of the Georgia Chamber of Commerce. “I believe it’s all leverage and all rhetoric – right now.” But Bowers added that when GE moved from New York City to Connecticut about 40 years ago, it did so partly because it was going from a high tax state to one with lower taxes.
So Bowers said Georgia’s economic development machine is already at work planting seeds to get on GE’s radar if it is seriously looking to move its headquarters.
“I can assure you that we are working on it. Our economic development folks are already engaged,” said Bowers, who has done a great deal of business with GE over the years. “Of course we would want them in Georgia if we could get them.”
Bowers remembered being involved in Georgia’s recruitment efforts for the headquarters of the GE Power Systems division (later GE Energy) to Atlanta about 15 years ago.
“We did so well with GE Energy when it moved its headquarters here,” Bowers said. “We want to let them know how much has happened here since GE Energy moved here. We want GE to know that Georgia is a business-friendly environment with strong research at Georgia Tech and other institutions.”
Georgia does have strong ties to GE. One of the state’s best friends within the company is John Rice, GE’s vice chairman of global operations. Although Rice is now based out of Hong Kong, he and his wife, Cammie, still consider Atlanta to be their permanent home. And he still has an office at GE’s facilities at the Wildwood office development in Cobb County.
According to people with a deep knowledge of the company, Rice is considered to be among the top two or three highest ranking executives within GE. And he undoubtedly would be involved in a headquarters relocations decision.
When he both lived and worked out of Atlanta, Rice was fully engaged in the local community–even serving as chairman of the Metro Atlanta Chamber.
Another key connection is former U.S. Sen. Sam Nunn, who served as a director on GE’s board from 1997 to 2013. Nunn has continued to maintain a close relationship with several of the key players within the GE organization.
And several former GE executives still call Atlanta home: Frank Blake, who recently retired as CEO of The Home Depot Inc.; Rick Smith, CEO of Equifax Inc.; and even Bob Nardelli, who had been one of the candidates in the running to succeed Jack Welch back in 2001. But the job ended up going to Immelt instead.
The business relationships with GE’s executives also are extensive. GE’s different product and service lines touch just about every major company in the state–from airline engines to power generators to financial institutions to appliances.
That means executives of many of Georgia’s Fortune 1000 companies would have entrées to different executives and divisions at the conglomerate.
From a business expansion standpoint, GE has been favoring the Sun Belt–investing in a number of Southern states, including Mississippi, North Carolina, Florida, Alabama and South Carolina.
Ironically, GE’s footprint in Georgia–now totaling 5,300 jobs – is expected to shrink because of the company’s realignment of businesses. It is selling its appliances business to Electrolux. That would translate into a loss of about 1,600 GE jobs in the state. The company also is getting out of the financing business, and that accounts for 1,100 GE jobs in Georgia.
Someone who has worked with the company for years in Georgia said that could actually end up working in Georgia’s favor.
“It helps us,” he said. “GE is expanding all around us. Why is GE not expanding in Georgia? We like Georgia.”
An economic development professional said he believes GE made its recent public announcement to get leverage in Connecticut. Because GE is such an iconic company, Connecticut would not want to lose it, and the legislature might reverse its actions when it reconvenes at a special session in the next few weeks.
“I just don’t see these things playing out in public,” he said about a substantive headquarter relocation effort.
But that said, the economic development professional added, “You lose nothing by pursuing it at 100 miles an hour. At the very least, you are bringing your team together and selling your state. And if it’s for real, you are in the game.”
He also said that if GE is a serious prospect, he would take 10 of Georgia’s top CEOs along with the Gov. Deal and Atlanta Mayor Kasim Reed to call on Immelt. When one CEO tells another CEO that Georgia is a great place to do business, it has a much stronger impact than when it comes from a politician or an economic development official.
Someone who is quite familiar with the company and Georgia said “this is not saber-rattling,” and he insisted that GE is “serious about looking somewhere else” for its headquarters. But he also added that the company is going to take a measured and thoughtful process–as GE is known to do.
“This isn’t going to be a 50-state beauty contest by any stretch. It is not even going to be a 10-state beauty contest,” he said–speculating that probably up to five states would end up being considered if the GE decided to move out of Connecticut.
Likely contenders would be New York, which has become much more business friendly in recent years and would not involve a major disruption for GE headquarter employees; North Carolina; Georgia; Texas; and Colorado.
Another senior leader who is quite familiar with the company said that Georgia would have to be considered.
“It’s not like GE doesn’t know Georgia,” he said. “Atlanta has a lot of attractions. It’s a pleasant place to live.” The city also works especially well for a corporate headquarters, he said, because of the airport’s frequent connections around the country and the world.
“I’m sure Connecticut is going to go all out to keep GE’s headquarters,” the senior leader said. “But the upside is so great, you have to aggressively jump on it even if the odds are against you. I don’t think Jeffrey Immelt would be doing this if he weren’t really serious about doing it.”
But the consensus among all the Georgia leaders who were contacted for this story is that Georgia has nothing to lose, but everything to gain, by putting together a strong recruitment effort for GE’s headquarters.
“This is a great marketing opportunity with a potential prize that is a corporate headquarters,” Bowers said. “But you win either way by marketing Georgia within GE. This is a great opportunity to update GE on what’s happening in Georgia. The update is going to invaluable.”
Georgia GE facts:
- GE employs more than 5,300 across the state of Georgia.
- Lafayette, Ga., is home to more than 1,600 GE Appliances employees who manufacture cooking ranges.
- GE Power & Water employs more than 1,400 across the state with facilities in Atlanta, Duluth, Alpharetta and Chamblee. The majority of these employees are part of the Power Generation Services business which is headquartered in Atlanta. From the monitoring and diagnostics center, GE is able to track energy assets of customers across the globe.
- Atlanta is also home to the headquarters of GE Energy Management and its Digital Energy business, which together employ an additional 400-plus.
- Alpharetta and Macon are home to more than 840 GE Capital employees.
- Over 5,300 GE jobs, including:
- 1,600-plus GE Appliances jobs
- 1,100-plus GE Capital jobs
- 1,400-plus GE Power & Water jobs
- 400-plus GE Energy Management jobs
- GE Capital – Alpharetta, Macon, Atlanta
- GE Appliances – Lafayette
- GE Energy Management – Atlanta
- GE Power & Water – Atlanta, Duluth, Chamblee
- GE Transportation – Atlanta
- Source: General Electric Co.
GE statement on potential increase to Connecticut taxes, June 1, 2015
FAIRFIELD, CT – June 1, 2015 – Reports that Connecticut officials intend to raise taxes by another $750 million dollars are truly discouraging. Retroactively raising taxes again on Connecticut’s residents, businesses and services makes businesses, including our own, and citizens seriously consider whether it makes any sense to continue to be located in this state. The Connecticut economy continues to struggle as other states offer more opportunities and a better environment for business growth. It is essential that Governor Malloy and legislative leaders find a more prudent and responsible path forward for Connecticut and its citizens in their current budget negotiations.
GE’s statement regarding interest from Georgia (or anyone else for that matter):
“We have formed an exploratory team to look into the company’s options to relocate corporate HQ. It is too soon to comment further on the process.”